Contract Law

Case Summary: Raffles v. Wichelhaus 1864 - The Peerless Case

(1864) 2 Hurl & C 906; 159 ER 375

The Court of Exchequer (Pollock CB, Martin B, Pigott B) gave judgment in 1864 for buyers who pleaded that they meant a ship "Peerless" sailing in October, when the seller offered cotton from another "Peerless" sailing in December. The court gave no reasons. Counsel's argument of latent ambiguity and no consensus ad idem is why the case is cited for those points.

Case Summary: Embry v. Hargadine, McKittrick Dry Goods Co.

127 Mo. App. 383, 105 S.W. 777 (1907)

Embry ran the sample department of a St. Louis dry goods company under a one-year contract at $2,000 that expired on 15 December 1903. On 23 December he told the president, McKittrick, that he would quit unless he got a new contract. On his account McKittrick replied, "Go ahead, you're all right; get your men out and don't let that worry you." He was later discharged and sued. The trial court told the jury there was a contract only if both men intended one. The Missouri Court of Appeals reversed and remanded: the test is objective, and if the conversation happened as Embry said and he understood he was employed, it was a valid contract as a matter of law.

Olley v. Marlborough Court Ltd (1949): Exclusion Clauses

[1949] 1 KB 532

The Court of Appeal held that a notice in a hotel bedroom disclaiming liability for stolen valuables was not part of the contract, because the contract was concluded at the reception desk before the guest could see the notice. An exclusion clause binds only if notice is given before or at the time the contract is made — and the hotel remained liable as a negligent bailee for Mrs Olley's stolen fur coat.

Case Summary: Damodar S. Prabhu v. Sayed Babalal H

(2010) 5 SCC 663; AIR 2010 SC 1907

A three-judge Supreme Court bench (3 May 2010) allowed the compounding of a Section 138 cheque-dishonour offence, set aside the appellant's conviction, and framed guidelines to push parties to compound early: no cost at the first or second hearing, then 10%, 15% and 20% of the cheque amount at later stages. Courts may reduce these costs for recorded reasons. In 2025, Sanjabij Tari v. Kishore S. Borcar modified the scale to nil, 5%, 7.5% and 10%.

Dickinson v. Dodds (1876): Revocation of an Offer

(1876) 2 Ch D 463

Dodds offered to sell houses to Dickinson for £800, the offer "to be left over until Friday 9 a.m." Before then, Dickinson heard from a third party (Berry) that Dodds had sold to someone else (Allan). His later acceptance failed. The Court of Appeal held the promise to keep the offer open was not binding (no consideration for it), an offer can be revoked any time before acceptance, and a reliable third party's notice of the sale was as effective as a withdrawal by Dodds himself — so there was no meeting of minds.

Carlill v Carbolic Smoke Ball Co [1893] 1 QB 256

[1893] 1 QB 256

The Carbolic Smoke Ball Co advertised a £100 reward to anyone who used their product and still caught influenza. Mrs. Carlill did — and the Court of Appeal held that the advertisement was a binding unilateral contract and she was entitled to the £100.

Lucy v. Zehmer (1954): Case Summary & Objective Theory

196 Va. 493; 84 S.E.2d 516 (1954)

Lucy v. Zehmer (1954) is the classic "was it a joke?" contract case. Zehmer scrawled an agreement to sell his farm for $50,000 on the back of a restaurant check after an evening of drinking, then claimed he was only joking. The Supreme Court of Appeals of Virginia held the contract binding: under the objective theory of contracts, what matters is how a reasonable person would read your words and acts — not your secret intention.

Krell v. Henry (1903): Case Summary & Frustration of Purpose

[1903] 2 KB 740

Krell v. Henry (1903) is the famous "coronation case" that established frustration of purpose in contract law. Henry hired a London flat purely to watch Edward VII's coronation procession; when the King fell ill and the procession was cancelled, the Court of Appeal held the contract was frustrated and Henry did not have to pay the balance — even though the room could still physically be used. Note: Krell, the owner, lost.

Parker v. South Eastern Railway (1877): Reasonable Notice

(1877) 2 CPD 416

Parker deposited a bag in a railway cloakroom and got a ticket reading "See back"; the back limited the company's liability to £10. His bag (worth more) was lost. The Court of Appeal held a person can be bound by printed conditions he has not read — but only if the company did what was reasonably sufficient to give him notice of them. Because that question of reasonable notice had not been properly put to the jury, the Court ordered a new trial. The case is the source of the "reasonable notice" test for incorporating exclusion clauses.

Case Brief: Balfour v. Balfour 1919: A Landmark Case in Contract Law

[1919] 2 KB 571

The Court of Appeal (Warrington, Duke and Atkin LJJ) held in 1919 that a husband's promise of £30 a month to his wife was an ordinary domestic arrangement, not a contract, because the parties did not intend legal consequences. Later law treats this as a rebuttable presumption against contractual intent between spouses. Distinguished in Merritt v Merritt (1970).

Harvey v. Facey Case Summary: Offer vs Invitation to Treat

[1893] UKPC 1, [1893] AC 552

In Harvey v. Facey (1893), the Privy Council held that Facey's telegram quoting £900 as the lowest price for Bumper Hall Pen only answered a question about price. It was not an offer. Harvey's "we agree to buy" telegram was itself an offer, which Facey never accepted, so no contract was formed.

Statute of Frauds: Which Contracts Must Be in Writing

The statute of frauds requires certain contracts to be in writing and signed by the person being held to them, including land sales, contracts that cannot be performed within a year, promises to pay another's debt, and sales of goods of $500 or more. Here are the categories, what counts as a writing, and the exceptions.

The Parol Evidence Rule: Integration, Exceptions, Cases and Examples

The parol evidence rule stops a party from using earlier or same-time oral or written agreements to contradict, and sometimes to add to, a final written contract. Here is how integration works, the exceptions, the leading cases, and UCC 2-202.

Promissory Estoppel: Elements, Section 90, Cases and Exam Tips

Promissory estoppel makes a promise enforceable without consideration when the promisee reasonably relied on it and injustice can be avoided only by enforcing it. Here are the elements under Restatement (Second) of Contracts § 90, the leading cases, and how it is tested.

Meeting of the Minds in Contract Law (Consensus ad idem)

"Meeting of the minds" (consensus ad idem) is the mutual agreement on the terms of a contract. This guide explains what it means, the objective standard courts use, how it is proved, and the leading cases — with the Indian Contract Act position.

Section 138 of the Negotiable Instruments Act: Cheque Bounce Law

Section 138 of the Negotiable Instruments Act, 1881 makes dishonour of a cheque issued for a legally enforceable debt a criminal offence in India. This guide explains the 30-day notice and 15-day payment timeline, the one-month deadline to file a complaint, penalties up to two years, and the leading Supreme Court rulings.