ASSIGNMENT

LEGAL ENVIRONMENT OF BUSINESS

Gajendra Singh Raghav

Roll No.: X01011
1. A promised to pay his son B a sum of ₹1 lakh if B passed CA exams in the first
attempt. B passed the examination on his first attempt but A failed to pay the
amount as promised. B filed a suit for the recovery of the amount. State whether
B can recover the amount under the Indian Contract Act, 1872.
As per Section 2(h) of Indian Contract Act, 1872 Contract is an agreement which is enforceable by law.
Social agreements are not enforceable by law. The problem asked in the question is based on Section
10 of the Act. As per the provision, the parties must intend their agreement to result in legal relations.
Agreements of a social or domestic nature do not contemplate legal relationship and, as such are not
contract and it cannot be enforced by the law.
The leading case on this point is Balfour vs. Balfour (1912 2KB.571).
Thus by applying the above provisions in the case, it can be held that the B (son) cannot recover the
amount of Rs. 1 lakh from the A (father), because of the reason explained above.

2. A advertises in paper that any person who found his lost dog can get a
reward of ₹5000. Can the advertisement be said as the general offer?
Can any person who finds the lost dog claim the reward money?
When an offer is addressed to public i.e. the world at large, it is a general offer and can be
accepted by any member of the general public by fulfilling the condition laid down in the offer.
Here, the advertisement in paper addresses the general offer that found the lost dog and fulfills
the conditions. That person can claim the rewards money as per offer.
The leading case on this point is Carlill Vs. Carbolic Smoke Ball Co. 1893
In this case a Smoke Ball Co. offered to pay 100 pounds to any person, who will suffer from
influenza after using Smoke Ball according to directions. The plaintiff used the Smoke Balls but
suffered from influenza she was entitled to recover 100 pounds.

3. A offers B to sell his house for ₹5 lakhs and directs him to send his
acceptance only by e-mail. B sends a letter of acceptance by post. Is
there the valid contract between parties? What would be your opinion
if A does not reject the acceptance made by e-mail within a reasonable
time?
Under the provisions of the Information Technology Act, 2000 particularly Section 10-A, an
electronic contract is valid and enforceable, if the essential requirement to validate an
electronic contract is compliance with the necessary pre-requisites provided under the Indian
Contract Act, 1872. In this case, the offeror A itself declares only one type of acceptance e-mail
is valid, than that type of acceptance must be used or there is no acceptance i.e. only e-mailed
acceptance can be legally recognized as acceptance.
 There is a valid acceptance of contract between parties if A does not reject acceptance sent by
B.
4. A is a minor, B approaches A for a loan on the basis of a mortgage of
the house owned by B. Hence, A advances the money and B executes a
mortgage in favour of A, the minor. Is the mortgage of property valid?
Can a minor enforce the contract against B?
Yes, because A is a promisee in the agreement and minor promisee can enforce the agreement.
According to the Indian Majority Act, 1875, the contract with minor (not completed the age of
18 years) is void, but if contract is done for the benefit of minor then it may become valid and
A minor can enforce the contract. As in this case the contract is for the benefit of minor it
becomes enforceable against B. So, the mortgage is enforceable by A even though he is a Minor.
5. Anurag promises to pay ₹11,000 to the management committee of a
school by way of donation. The management committee on the basis of
Anurag’s promise, gets a water purifier system installed in the school
at the cost of ₹8000 on credit. Now Anurag refuses to pay the donation.
What is the remedy available to management committee of the school?
Give reason.
According to promise to charity, a mere promise to contribute to charity is not enforceable by
law because it is without a consideration. However, if a person promises to contribute to charity
and on his faith, the promisee undertakes a liability to the extent not exceeding the promised
subscription; the contract shall be valid and enforceable.
In this case, the school went ahead with installation of water purifier believing donor’s
(Anurag) promise. If the donor backs out at the last minute, a court might hold that the school
justifiably relied on the donor’s promise to its detriment, and in order to avoid the injustice that
would result by not enforcing the donor’s promise, a court may enforce the promise to the
extent of the amount of the expenditure. School can sue for breach of contract under sec.73 of
Indian Contract Act.