Category: Contract Law

ISSUE:

Whether the purchasers under agreements in respect of Jhandevalan property have a statutory charge in view of Section 55 (6) (b) of the Transfer of Property Act?

Whether the purchasers are entitled to interest under the same section?

Whether the period of limitation for enforcing claims by the purchasers would be 12 years under the Limitation Act?

Whether in view of the words “subject to contract to the contrary” used in Section 55 (6) (b) of the Transfer of Property Act and in view of the term in agreement of sale that Skipper will not be liable for interest, the purchasers cannot claim interest?

Whether the purchasers can rely on finding of fraud given by the Supreme Court to claim for interest that was sustainable?

RULE:

The buyer will have a charge on the seller’s interest in the property which is the subject-matter of the sale agreement insofar as the purchase money and interest on such amount are concerned, unless the buyer has improperly declined to accept delivery.

When the property upon which the charge is created gets converted into another form, the buyer will be entitled to proceed against the substituted security.

The limitation period remains the same even after the enforcement of the charge on the substituted security.

Accepting bookings from excess number of buyers without adequate notice to them about the contingent nature of their contracts cannot be said to be fair dealing and the amounts paid by the buyers will not carry interest is wholly unconscionable.

ISSUE:

Whether a fiduciary relationship gives rise to a presumption of undue influence?

RULE:

When there is a fiduciary or influential relationship (such as a religious leader and a devotee), the law presumes undue influence when one party makes a large, voluntary gift to the other.

The person in the dominant position must prove that the transaction was the result of free, informed, and independent consent of the donor.

A person who claims relief from an undue influence transaction must act promptly after being freed from the influence, if not done so, he may be devoid of claiming the compensation.

Principle that equity does not assist those who delay in asserting their rights.

ISSUE:

Whether the Appellant is liable for the misrepresentation made by him during the agreement?

Whether the Appellant can recover a sum of money payable to him by the Respondents?

RULE:

The Appellant honestly and in fact held the opinion which he stated remained to be considered. This involved examination of the history and condition of the property. If a reasonable man with the Appellant’s knowledge could not have come to the conclusion he stated, the description of that conclusion as an opinion would not necessarily protect him against rescission for misrepresentation.

ISSUE:

Whether there was any contract between the plaintiff and the defendant?

Whether the defendant was bound to pay for the goods supplied by Boulton?

RULE:

It is a rule of law that if a person intends to contract with a specific person or entity, another person cannot give himself any right under it.

ISSUE:

Whether the defendant validly rescinded the contract between himself and the purchaser before the car was sold on to any third parties?

RULE:

A party, who absconds with property acquired under a voidable title, intentionally making it impossible to communicate with them, waives their right to be made aware that the seller is rescinding the contract.

In those circumstances, the seller can rescind the contract by taking all reasonable steps to get the goods back.

ISSUE:

Whether “threat to commit suicide”vitiates free consent and falls under Section 15 i.e coercion of the Indian Contract Act, 1872.

RULE:

Threat to commit suicide would prejudice any reasonable wife and son.

As section 15 reads "the committing, or threatening to commit, any act forbidden by the Indian Penal Code, Suicide is covered in the definition of culpable homicide and hence The threat of suicide amounts to coercion within Section 15.

While suicide itself was not a punishable offense under the Indian Penal Code (IPC), abetment of suicide (Section 306 IPC) and attempt to commit suicide (Section 309 IPC) were punishable offenses.

An act like suicide can be forbidden, even if it is not punishable.

The court held that if a person threatens suicide to force someone into an agreement, it falls within the ambit of coercion since abetment or an attempt to commit suicide is prohibited by law.

ISSUE:

Whether a false representation by the Appellant and the company leads to fraud, due to misrepresentation in the prospectus?

RULE:

A material misstatement may be a ground for rescinding the contract, but the consequences of fraud and of breach of contract are widely different.

A false statement, made through carelessness and without reasonable ground for believing it to be true, may be evidence of fraud but does not necessarily amount to fraud.

Such a statement, if made in the honest belief that it is true, is not fraudulent and does not render the person making it liable to an action of deceit.

ISSUE:

Whether the Defendants are liable to Plaintiff for deceit and fraud under Contract Law?

RULE:

In order to sustain an action for deceit, the Plaintiff must first prove that there was a statement as to facts there was false, and secondly, that it was false to the knowledge of defendants, or that they made it not caring whether it was true or false.

Also, when you have proved that the statement was false, you must further show that the statement was whether the sole cause of Plaintiff’s act, or materially contributed to his acting.