 Good evening everyone and amongst us we have Dr. Neelima Barbera, who has already taken two sessions with us and our knowledge on the contract law is as clear as a noon day. And that's why people watch our webinars as well as participate in the seminars. And above all, the most positive aspect I have seen is that her students who have started at ILS just follow her up on the social media and they encourage her not her but to the people at large that they should watch and hear from her because they believe and whatever interaction I have had, I also feel that if you have to understand a contract you will have to have a contract with her and contact with her to understand the different perspectives of law. And we've already done two sessions on the contract class series and today is the legal perspective series, the litigation perspective as to what are the means and modes which have to be decided. As they say that if their contract is drafted in the right essence with right mitigates, you will all nip the issues which could arise at a subsequent stage of time. As they say the contract could have the essence of the words, one comma here or there, vowels difference at a different place changes the entire essence and which could actually lead to a different litigation. In a lighter way in that said that in the corruption case, there was a case wherein it was to be typed as that I had given him right and it was written as I had given him right. They said that once you are a son-in-law then what action could you intend to take against that person. So that typographical error of B and B changed the entire scenario. But B that as it may, we know that contract law has its own essence. We'll ask ma'am to share her knowledge and we always not only on beyond law but people at large intend to understand the nuances from her because she actually unlocks everything for the better understanding and better perspectives of law. What do you a very good evening to all and I am happy and I really thank Mr. Vikas Chhatrat from the bottom of my heart. He has made me work. He has made me work to bring this the contract law to you from a different perspective and I've enjoyed working on it. I'm also happy that I'm able to bring my thoughts to many who are interested in hearing them. I think I have a very different way of looking at contract law. First the law, then the transacting and then how you look at it from the litigation perspective. I have a little background of litigation before I joined academics and I think that that background enabled me to understand contract law in a different manner. Before I proceed ahead, Vikas, please confirm that you can hear me clearly. Yes ma'am, perfect. Very good. Thank you. I must first put a disclaimer that I am not going to talk about law at all. In the sense there will be no case law. There will be no interpretation of sections. Today's session is more about thinking if I have a client who consults me about making the transaction. So I'm wearing a transaction hat. Or I have a client who has come to me between the contract while the contract is going and asks me what shall I do? Then I wear a consultant or an advisor's hat. And if after dispute has arisen the client comes to me, then I don the litigator's hat. And how I think differently or how the approach to litigation affects my thinking while making the contract, while working through it and while deciding whether to go in for litigation and on what type. I will be discussing with you with very, very simple examples. Most of my examples are about sellers and buyers dealing with goods because that is what I am easily familiar with. And that is so easy to explain. So with this disclaimer that I'm not going to discuss any law, but I'm going to look at it as a method of thinking and ask you to look at laws while we're raising questions and perhaps not giving any answers. And in that sense, please forgive me if I am personally just now wearing my hat as a teacher rather than as a lawyer or a consultant. So contract law is such that parties enjoy freedom of contracting. They can decide how they will form it. They can decide the terms of performance, whether they will deliver goods first or they will pay first what will be the price and so on. They can decide how long their relationship will last. Will it be for this transaction or will it be for one year or for 20 transactions? They can decide how the contract will come to an end and that will include for example termination clauses. In my earlier module on transaction, I have dealt with this in detail. So I just discussed the background. They can decide between themselves how subsequent events will affect them. And they can also decide whether compensation will be payable at all. For example, there are exclusion clauses or whether compensation will be limited where we have limitation of liability clause. So these are the things which parties can freely decide. So what remains in the law then? And that brings me to this question. What is the role of contract law? Please excuse me. I look by the side just to make sure that the screen has changed because I have it on my mobile as well. The contract law enables us to locate the contract. So if one party says, ah, we have a contract and the other party says, no, no, there's no contract. We were just negotiating that the contract law enables us to analyze and find out whether what they have as it formed into a contract or not because parties are so free to decide. They may not decide on every aspect of the deal that will affect them. If they have not decided or agreed upon something or provided for some aspect of it in the contract, then the law provides a defaults rule. So if parties have not mentioned about delivery of goods where they will be delivered, then the sale of goods act says that goods are delivered where they are. So that is the defaults rule. Parties are free to decide otherwise. So most of contract law, that is the contract act, the sale of goods act and many other laws affecting special contracts, they generally mostly provide defaults rules. But the main role of contract law is to enable enforcement. Parties can make or even parties who do not know that there exists some law can still make bar gains. But why do they need the contract law? They need it because the contract law gives them the faith that if one party breaks it, then the other party can ask for relief. So the system provides a means of enforcement. And the contract law also provides for remedies. What happens if a contract breaks? What happens if a contract is completed but payment is not made? So these are the remedies and generally, there is a remedy for an agreed amount or an agreed sum. There is compensation, specific performance and return of amount. So these remedies are what the law recognizes and it makes provision for them. I begin with this statement by an academic Andrew Tettenborn who wrote in 1999 that legal advice is at bottom, simply advice as to the remedy likely to be available or unavailable to the client. And this legal advice may be given even at the stage of formation of contracts. So when the lawyer advises to make a contract or make a provision in a certain manner, the advice actually is very closely connected with this question. If the contract were to be enforced, then what remedy will be available? Let us look at that because ultimately we are writing a contract so that it will get enforced. Hopefully, the deal will go through. Hopefully, the contract will be fully performed. But if there is a breach, then we should be able to properly draft it just now so that it is enforced in the manner my client wants. And that is why I say that whatever is the remedy structure, what the codes give us, what reliefs are available, when are they available, etc. It affects parties conduct. It affects parties conduct when they decide the terms, the primary terms, I put them in inverted comma because that is the terminology I use. The primary terms is what they have agreed to do under the contract to complete the transaction. Pay, deliver, provide services, give warranty and so on. Secondary terms is what if the first one is broken, then what? Will they be liquidated damages, which code will have jurisdiction, etc. So what is the remedy will enable them to decide how we contract. So it's quite likely that parties may agree that well, even if there is a breach, the liability will be limited to say 100 units or 100 rupees that enables them to lower the price. So 100 rupees will be enforced, not more than that even if the loss is higher. But because that is possible, that is why in the primary terms they can agree that the price will be lower. Secondly, what is the remedy based on that they will decide when to perform, what if there is a delay, what if I don't deliver just now but after a few days, what if there's a late delivery, how does the other party respond to it? So during the performance, what they will do, somewhere they will have in mind what remedy is available, then their diligence during performance. If at all they wish to negotiate for any changes, then what they should negotiate. And if at all there is a breach, then whether to file proceedings or not, all these aspects, well they are governed by a thought as to what remedy will be available if the contract is to be enforced. So how do we proceed from the litigation perspective? First of all, we must know the contract. By that I mean the nature of the contract and by that I mean the true nature of the contract. Is this an assignment or a license? Is this a lease or a license? Is this an agreement with the condition to repurchase or is it a mortgage by conditional sale? And for that, is this a pledge or is it a sale? To understand this, we must know the essential features of that transaction. And to understand that well, we must not only know the contract, but we must also know the business aspects of it because ultimately if the matter went to court asking is this an assignment or a license, it will get analyzed with reference to what is involved in the deal. So we should know how that transaction serves parties interest. This is what I mean by the transaction and the contract and the nature of the contract. But not only that, as a lawyer, we must also understand in great detail every term in that contract. So if I am to advise the client as to what is how he should go about a case to be filed on his behalf, then I should have read the entire contract. I should know the whole of it. Maybe I don't read every provision in detail, but I should be conscious of the types of provisions which we find in that, which I find in that contract. But not only that, we should also know the laws that are going to apply to that contract and we will get to know more about it as we go ahead. As an example, we should know the law. So let me take this example. Section 39, effect of refusal of party to perform a promise fully. As we know, this is anticipatory. So the section goes like this and I've only taken the relevant part. When a party to a contract has refused to perform his promise in its entirety, the promise he may put an end to the contract. This is an important part. He may put an end. What does this mean? So let us take an example. Under a contract, S who is a seller must deliver goods to B who is the buyer on 15th of December 2022 for a price of 5 lakhs. This is the contract. Now before we proceed to the next slide, section 39 gives an option to end the contract. Please remember the option is to end the contract. So if this option is not exercised, then the contract has not ended and it continues. This is something we bear in mind. So let us see how facts come. Situation one, the seller informs the buyer on 3rd of December 2022 that he cannot deliver the goods. B assumes that their contract has ended. It says now SS told me that he is not going to supply. So the contract is over. Now what does S do? S brings the goods to B on the 15th of December which is the agreed date. Is B bound to accept the goods? If B does not accept the goods, can S claim the price? This is the question. And most of us including lawyers and definitely most of my students when I ask them this question, they say that well isn't the contract over when S informs that he is not going to deliver goods? Then why should we be bound? We may have purchased them from outside and then if B doesn't want them, then why should S ask for the money? Why did S bring them at all? And the answer to this goes back to this earlier slide where I said if one party has refused the perform to perform, the promise he may put an end. He has an option to put it to an end and he must exercise it. So if he has not ended it by giving what we call a termination notice or a decision, in the contract law the word uses this system. If he does not do it, then the contract continues. And if the contract continues, then B is bound to accept the goods. It's his obligation to accept and if B does not accept the goods, S can claim the price. Why? Because he has offered to perform and B has not taken it. So instead of asking for compensation, he can ask for the price. This is a very important part and we should remember that. That brings me to this concept of what is a suit for an unread sum. Before I go to the next situation, let me talk about that. If I owe you money under a loan, then you claim the money on the basis that I have agreed to repay it. So the date has come and I have not repaid. So I should repay and you are going to force me to pay the amount. So what do you say? Conditions of the loan, therefore pay the amount. An insurance company has agreed that if there is a fire and if there is a loss, then we will pay that amount. So the person who claims that loss is not claiming compensation. He has not suffered a loss because of breach by the insurance company. What he's saying is that ask the insurance company to fulfill what is agreed under the contract. If I am a guarantor for a loan, VKASG has taken and you are the creditor. So when you enforce the guarantee against me, you are actually asking me to fulfill what I have agreed under the contract. So when you ask for amounts, all you are required to show is that I fulfill the conditions for payment of amount and therefore order the other party to pay the amount. There is no question of laws. It is just a question of asking for the money. This is called a claim for an agreed thumb. And a very beautiful discussion of this aspect is given in the chapter of remedies in Anson's book on contract law. In the chapter of remedies, you will find a very good discussion about a claim for an agreed thumb. And there is a distinction between this and enforcing compensation is because the calculation of limitation is different. The calculation of court fees is different and so on. So there is considerable difference between a claim for compensation and a claim for an agreed thumb. Coming back to our example, if B does not accept the goods, S can claim the price because S says there was a contract. It was subsisting. I was supposed to bring the goods on 15th of December. I brought them and therefore I can claim the price. Now why should I know this law is because if I want to advise the client at this stage or at this stage, then I should be aware of its effect on the actions of the parties. So let us go to the next situation. Let us suppose the reverse happens. B informs S on 3rd of December to 2022. Don't deliver the goods. This is a refusal by B. Because of this, S has an option to put an end to the contract. But S has not done that. So can S claim the price directly because B has told don't deliver the goods. The answer is no because he has not performed based on which his claim will come. He can at that time claim compensation for the loss. B has not taken the goods. I was required to sell them. I suffered a loss. So give it to me. So this, if at all he wishes to claim, he can claim. This is a claim for compensation. Can he attempts to deliver the goods on 15 December 2022? Yes, of course, because the contract is not ended. So he can attempt to deliver the goods. And if he attempts to deliver the goods and B does not take, then this is going to be a claim for an agreed sum. I'm talking about remedies. At this stage, if he decides to go to court, he can claim compensation. But if he wants the whole amount, that can be a matter of strategy, then he cannot claim it unless he has attempted to deliver the goods. So what I mean is that we must understand the nature of each provision of the law and be able to apply it to the facts of the contracts. Now let us take one more example. Laws affecting, we should also know the laws affecting special contracts. So let us take a situation. A buyer orders goods from S under their contract. S sends them, B rejects them on the ground that they are not fit for his purpose. Can goods be rejected on the ground that they are not fit for the purpose? I'm assuming that they don't have an elaborate written contract, so we go to the sale of goods act. This is the section, section 16. There is no implied warranty or condition as to the fitness for any particular purpose. So no buyer can say that these goods are not fit for my purpose. This is the rule of Kavit Emta. But if he has made known to the seller the purpose and if he has relied on the seller's judgment and it's the seller's business to supply the goods, then there is an implied condition that the goods shall be fit for the purpose. This doesn't apply to goods that are sold under a patent or another trade name. So what we say is that if a person wants to reject the goods on the ground that they are not fit for the purpose, he should be able to show this, right? So if we go back to this example that he has rejected them on the ground that they are not fit for his purpose, we should be conscious of this 16 and its requirements. What I want to stress is we should understand the niceties and the detailed provisions of the sections which we are going to apply. Then we should also know about the law relating to interest. If parties have written the rate of interest in their contract, well that can be claimed. If parties have stated there will be no interest payable, then no interest can be claimed. But if nothing is mentioned, then can interest be claimed? This is the question. And we should be conscious that there is another law which governs interest, which is the interest act. So can the court allow interest to the parties? Then it says at which rate current rate of interest. This is defined in the interest act. If there is a debt payable by a written instrument at a certain time, for example a loan under a loan agreement or a check or a bill of exchange, then from the date when the debt is payable to the institution, current rate of interest can be allowed. But what if it is some other contract and damages are claimed, etc. Can it be allowed? It says if the proceedings do not relate to any such debt. Such debt means debt payable by virtue of a written instrument. If it is not relating to such debt, then a written notice is required to claim interest. So if I want to claim interest and our contract is silent, I should give you a notice saying I will claim interest and then interest will be given from the notice up to the date of filing the procedure. We all know that interest thereafter is governed by the CPC. And then it says if the this doesn't apply if interest rate is agreed or if interest is barred, it is prohibited under the agreement. Our decisions, many of our decisions are based on how much interest can be claimed. So we should be conscious of the provisions of the interest act. By the way, interest act contains many more provisions about other types of proceedings. Then we should know the laws that affect the particular contract that is regulatory laws, for example. And if we want to enforce and even if we don't want to enforce, we just want to advise transacting. We say I'm a convincing lawyer. I'm a transaction lawyer. We cannot ignore the provisions of all these which are procedural laws. So we must know the law of limitation. We must know that certain transactions require registration. We must know that every agreement requires time duty, at least in Maharashtra. People don't pay it, but the law says that it has to be paid. We must know the law of evidence, especially the parole evidence rule. We must know the law relating to jurisdiction in the CPC. And we must know the other provisions in the CPC. And this we must know as transaction lawyers. When I was a very young junior, a senior advocate used to say that if you want to practice in the field of contract or transfer of property, you have to be a master of the CPC. Why? Because in a contract, you want to enforce obligations or you want to write enforceable obligations. And in property, you want to enforce a title. Why is the transfer property there? To give a good title so that it can be defended. And therefore you must be a master of the CPC. You must know the provisions of the CPC. Then the next thing is we must look at each provision or we must learn to look at each provision from different perspectives. What is the purpose of the provision? We must look at it from the perspective of one party or from the perspective of the other parties. So let us look at this provision. Devolution of joint rights. I am only giving a method of thinking. I just selected sections which are appropriate for discussion. Now the whole question is like this, that let us suppose that you are a builder and I and my one brother and one sister have purchased a flat from you. And the last payment is due when you are going to hand over possession. I come with you with the whole payment and I say give me possession. Should you give it to me? Will you get a discharge? If you give it to me and the others ask you why did you give possession without a consent, they will draw you into litigation. So you are interested in a discharge. So this provision of devolution of joint rights talks about when will a promised scene get a discharge? That is the purpose of the provision. So what does it say? When a person has made a promise to two or more persons jointly, so you have made a promise to me that you will hand over possession of the flat, then unless a contrary intention appears on the contract, the right to claim performance rests as between them and then with them during their joint lives. So all of us together must come to you and ask for possession and you can insist that it be so. But if you give it to only one of us, the others have a cause of action against you because this is the default provision. Notice here, we can always put it in the agreement that when the money comes, you can hand over possession to any of us. It can be provided but if it's not provided in the contract, then let us look at it from the promises perspective. Who is the promise scene? We are the promises. So from our perspective, I should know that we all must claim possession, otherwise at the time of making the transaction, we can make a different provision. If I want to claim possession, I must know that three of us should go. Otherwise, I should know what sort of documents to make a power of attorney or some such document which will give me authority so that I can claim possession. If I know this provision, I will be able to think about it. Located from the point of view of the promise that is you who is going to give me possession. You have to think that well, I want to get a discharge. What if others will claim that how do I protect myself? You can of course give me the possession rather than the other too. But you should understand that you are taking the risk. So what I mean is I go back to my slide and I say that we should learn to look at each provision from the purpose of it or of one party or of the other party. Let me take one more example. This is related to the law of limitation. We all know that when a debt, let us say a loan is barred by limitation, the debt continues, but the right to enforce it is lost. So the remedy is over, but the right remains. Now, what if the loan is time barred? You cannot file a suit to recover it. Then what? If there is an acknowledgement in between, then limitation act is there. But nothing is there. The loan date is over. Four years have gone. After that, what? So we have a provision in 25 which is about agreements without consideration. And it says an agreement without consideration unless and this is the provision. And in this case, it is a contract, which means it can be enforced. What is it? It is a promise. It is made in writing signed by the person to be charged there with means who owes the money. What is the promise about? The promise is to pay only or in part a debt. And this debt is otherwise fine. It is just that it is barred by limitation. Okay. So if I owe you money and four years are over and I owe you 100 rupees and say today, I come to when I say I promise to pay you 50 rupees of that debt, then you can claim from the 50 rupees as if it is a new contract. This is the provision. Now, let us look at it from your point of view. You are the promisee of the debt. So from your point of view, even having that promise is good because otherwise you can't enforce. But you would like to have a promise to pay the whole. And I am the promise. I am the promise sir. I can always say I will pay you only the principal. I will not pay interest. I will pay only half the amount and I give only that much promise. So if we are looking at it after the promise is given, then naturally we should know that what is mentioned in the promise only can be recovered. This is a way of looking at a provision in great detail. And believe me, this cannot happen in college. So I never say that students, why is it that they don't understand so much? It is only after we have seen the world a little bit, two, three years, four years of practice that we can take every provision. We sit two or three people together and we take roles and we are able to discuss the provision. That is the best method of looking at these provisions. So now let us go to a live case. Live case means things have happened in the past and today we have to see what is to be done. But as I take you through the case, I will also take you in that timeline. There is one thing we know as practitioners that when a client comes to us, he comes with whatever facts are. We cannot really say why didn't you do this, why didn't we can ask the reason why he did something or why he didn't. But you shouldn't have done that or we wish that facts were different. That is not possible. So we cannot wish away the facts. We have to take them as they are. But is there anything more that we can do? So let us look at that. So a live case means one party has not performed. So we have to decide what action to take. So our decision now is whether to proceed or tell the clients, no, don't proceed. It's a small amount, not worth it. Or do we just give notice? Or do we file action? Or do we file a suit? Or we give notice and wait and then decide whether we file proceedings. This decision is required now. We can of course change the decision. Why? Because the tone of what we do is going to change according to our objective. So we need a perspective of the whole case just now. We should know how much we are going to succeed, what course of action to take so that even if the notice is to be drafted, we have to draft it in that manner. I keep saying litigation perspective is not a perspective when you decide to file a suit. Its perspective is required even when you make the contract. But here at this point, we are saying that we need that perspective so that we know how to draft the notice. So we should have a whole picture. We should be able to predict. We should be able to anticipate, form a judgment. Please remember your judgment and my judgment can always be different. Different advocates may give different opinions and this judgment is based on that person's opinion. By opinion, I mean belief. So ultimately, we can never guarantee our client that he will be successful. We say that well, if we present the facts in this manner, then this will going to be the outcome. So now, let me take you to the facts of the case. This is a sale of goods case. 14th of October 2019, Mr. Bayer of Bangalore, BNB sent an email inquiring of Mr. Seller of Surat about XYZ, a branded product of which Mr. Seller is a wholesaleer. The moment they say branded product, then I should say, well, if it's a branded product, then the liability of the seller is even small. So immediately, I am thinking of sale of goods act, I am thinking of what remedy, I am thinking of what defense will the other party have and so on. So branded products, well buyers, it's their own decision to buy that product. So they know what that product is. They should also know whether it will be fit for them or not because they are asking for a branded product. 16th of October 2019, Mr. Seller emails a quotation for XYZ. The quotation states, 25% advance and balance at delivery payable at Surat. Now whatever that means, people just write and when we have to file a case or we have to fight a case or examine or cross-examine, then we have to put meaning to these words balance is payable at delivery and it's payable at Surat. Price includes delivery at buyer's location against a check for the balance. So remember, this is a conditional delivery. Only if you give a check, then only the delivery is going to happen. And then among other things, the quotation says that our contract will be subject to Surat's jurisdiction only. So Mr. Bayer places an order by email for the product for 10,000 items at the quoted price and he sends the advance. This is according to contract. On 1st of December, Mr. Seller sends the goods and then envoys for 750,000. On 3rd of December, Mr. Bayer receives them and gives a check for the balance of rupees 750,000. So the check is given and the goods are taken. We must remember they are branded goods. So the only inspection that should happen is whether the goods are of that brand or not, maximum whether they are genuine or not. But other than that, I mean there really can be very little to complain about. On 7th of December, 2019, so notice there are five days, three, four days, 7th of December, 2019, Mr. Seller deposits the check. But on the same day, Mr. Bayer sends an email to Mr. Seller that the goods are defective. That is not of good quality. Goods are not suitable for his business. You may carry them away. So now, if the goods are branded goods, can this be stated? Is the buyer entitled to say that? If the goods are branded goods, is the buyer entitled to say they are not fit for my purpose? That is the language in the Seller goods act. And who is supposed to carry them away? If the goods are defective, is it for the buyer to hand them over to the seller and say, here I brought them? Or is it for the seller to bring them back from the buyer? Is it just enough to inform? So these are the questions and all these questions have an answer in the sale of goods. On 9th of December, the seller comes to know that the check is dishonoured. So he receives a notice from the bank. On 12th of December, the seller sends a notice saying your check for 7,50,000 sent for price of goods for this invoice has bounced. Please send the amount of 7,50,000. Notice he doesn't say send the price. He says, send the amount of check. The check was for this purpose. Send the amount of check. The check has bounced. Send me the amount. We will understand the significance of this data. On 20th of December 2019, the buyer writes a reply in three sentences. Receive your notice. I am not liable to pay 7,50,000. Please return the amount of 2,50,000. Does this mean that the buyer cannot now claim compensation? Is it waiver of the claim for compensation? This is going to be a question later. And notice here, after almost three years today, 26th of November 2022, Mr. Seller wishes to file a suit for recovering the amount. So he has come to us. And we must open the file immediately because the first question is limitation. And you will notice that there is very little time. So should we give notice? Should we not give notice? It takes at least two days to prepare the suit or the claim in arbitration and file it. And therefore a decision has to be taken to do something immediately. Okay, so now let us look at an analysis of this. Let us look at the position of the seller. The first question is of time and that is limitation. What is the period of limitation? I'll come to that shortly. Are there some facts which he doesn't know? And the answer is yes. He doesn't know what is the defect or what is the problem the buyer is talking about. Whether that problem exists, whether suppose that he noticed indicated what it is, but whether it exists or not, because the goods are still with the buyer. And perhaps the buyer has used them up. So on the one hand, he has told him I'm not going to pay and he has used up the goods or has he sold the goods because if he has sold the goods, then perhaps the seller will be able to claim the price. Now the next question is where to find the suit, because you know this is very important. This there is cost involved if the seller in Surat is to go to Bangalore to find the suit that has he has to decide then whether to file it or not. So let us see what are the facts. We all know that a suit can be filed under the CPC where the defendant decides or carries on business or where the cause of action arose and generally in respect of cause of action where the contract was made or where the contract was broken. There are of course other dates which we can select, but I'm looking at these. So what is the connection of the contract with Bangalore? The defendant decides there yes very well. So the Bangalore court has jurisdiction. The acceptance was posted from Bangalore. Remember the seller sent a quotation and the buyer accepted it by email. I'm using the word posted just to indicate whether the postal rule that I sent the email from Bangalore therefore acceptance is complete. If it applies to emails then the contract has happened in Bangalore. So the making of the contract is in Bangalore. But in Surat what all has happened? The agreement if it's in writing may have happened at Surat. The plaintiff resides at Surat. The proposal was emailed from Surat. The acceptance is received in Surat. The payment offers receivable. So here is one cause of action part of cause of action. Payment is receivable in Surat. Check is dishonored in Surat and I will take you to one more fact here. 25% advance. Now if this means that 25% advance must come with the acceptance then perhaps we can say that the acceptance is complete only when it is received in Surat and not when it is posted. I'm just saying well perhaps we can say and therefore we might say that even if we apply the offer acceptance analysis well perhaps we can argue. I'm constantly using the word perhaps because we are still thinking. Perhaps we can argue that yes the acceptance has happened at Surat. Now when we are thinking all this we should be very conscious of the provisions relating to proposal and acceptance in the contract. So let us go. So this is about where to file the suit. And then we say well yes perhaps Mr. Seller you can file the suit at Surat because we can say that the acceptance is received here and because it's a conditional acceptance. Also because the payment was receivable and the check was dishonored here. So yes perhaps a part of cause of action is a reason. So let us take a decision that we can file a suit in Surat. Now the main question here is and this is where I want to say that you know should be conscious of all provisions that might apply. Is do we file a suit on the transaction or do we file it on the check. So what is a suit on transaction. Let us suppose that the check was not given goods are delivered and prices payable. Let us say after six days then how could the seller have asked for the money. He would have said that look I this is the contract and it was agreed that goods are to be delivered. So I have delivered them. Here is the delivery salon with the signature and therefore give me the payment. So he alleges that there is a contract and he alleges how he has performed it and then he says I have a claim for the money. What we remember is that each of these facts must be pleaded and proved. But are those facts the transaction itself. How he has performed under the transaction and therefore is entitled to the money. But he has a check. So he can say forget the transaction. I will just take the check and the check is dishonoured. So like let me file a suit on the check. So what happens when the suit is on the check. So let us see. First of all if a suit is to be filed I am not talking of a 138 complaint in a criminal court. I am talking of a suit to recover the amount for which a check was given. So on the check. So if the suit is on the check then it is a four line suit that for a transaction. So I am so gave a check for this amount. I deposited it in the bank but it has returned dishonoured hence this suit. So the only cause of action is that the check is dishonoured. So what facts are relevant in this suit or in this suit is different. Now when I was a very young junior my seniors father who also was a lawyer and what shall I say a lawyer who never wasted words just the essential should be pleading that is what he would say. So he used to say if you remove the title and if you remove the prayer then the suit should be half a page if it's a suit on a check. So which facts you select is going to be different and if your suit is on a trans is going to be on a transaction then your notice must allege the facts of the transaction. If your suit is on the check then your notice should say you gave a check it's dishonoured so give me that amount. So your pleadings are also going to be different. The burden of proof tremendous benefit if you file a suit on a check right there's presumption of consideration there's presumption that it is stamped and there are so many more presumptions under section 118 of the negotiable instrument act. Now if I were filing a suit on a transaction there would be a small burden on me on the seller to show that the goods were according to contract at least an allegation in an affidavit but if it is if it is a suit on a check then the question of defective goods need not arise however if it's a summary suit right I'll come to that then the burden will go on the other party to show that the goods are defective. Then a very important decision about whether about this right is the question of payment of interest. You will notice that in our contracts or in our discussion there is no agreement about interest so can interest be claimed and then we say yes under the interest act it would be 6% 7% 8% current rate of interest as defined but if it's a negotiable instruments act then section 80 of the negotiable instrument says that if you file a suit on a bill of exchange or promissory note and a check is a bill of exchange and no interest is mentioned on it so a check doesn't mention interest right then irrespective of what is agreed between the parties 18% interest is payable I just checked up yesterday whether 18 has been amended and it has not so if I want to claim higher interest then I should choose this right next if I if it's a suit on a check then a summary suit is maintainable if the suit is on a transaction and email correspondence then summary suit will not be maintained and what is the benefit of summary suit the defendant has to plea or ask that please allow me to defend and then the defendant may be required to prove that the goods may defect so if I am for s then I will select this and I will select this burden of proof and interest at 18% but then I ask this question that if a suit on a check is filed is a notice of demand required I am not providing an answer I'm just raising questions because if a notice is required then we have very short time to issue a notice for that let us go back I think I've not mentioned here there should be one more point here and that is limitation so let us go back to the facts the cause of action for filing a suit arises when there is a breach so now you will see that the breach has occurred when the check is dishonored which is 9 December 2019 and that is when the payment was not made right so 9 December 19 and now we have 26 November which is only 10 days so if a notice is required under the law then you really have to act if a notice is not required you still have 10 days to file a suit which again requires you to act very fast so these are the ways in which I will ask myself questions and I will answer them while taking the decision and then in the suit if I'm filing a suit and even giving notice which facts are relevant what is going to be my prayer and what interest I will be claiming so what I why I have given this example this is because one has to be aware of so many things while deciding what to plead which are the relevant facts I should state I must state that the goods are delivered then how will I show that the goods are delivered of course here the other party has admitted so proof is not as much required but every fact which I will narrate to show that I have a contract this was agreed this is what I did under the contract hence I'm entitled to payment every fact is going to require proof we can't anticipate in the beginning that the other party will admit if the other party admits that's very good but if the other party doesn't admit then there's a burden of doing facts so you have to be conscious of every fact every document of activity as one goes to the file now let us look at the position of the buyer B let us suppose the buyer B has received a notice from the seller so when he receives the notice he has the first opportunity of stating his case what does he want to say is he going to say that the goods are effective when he will say can I say that when they are branded goods I ask for the branded goods so how far can I apply section 16 I discussed with you section 16 earlier so how far can I apply this is something we will have to think about because once he puts forward a case he will not be able to change it later so he not only has to answer the seller's case to say that I am not liable but he also has to set up his own case because what does he want he will either want compensation for the goods which were not according to contract and he would also at least want back his money so for that he has to set up his own case he will have to show that the goods are defective in order to get back the money right so what facts are required for that those facts one should be conscious even while replying the notice he will have to prove that the goods are defective in order to be able to set his own case so he will have to ask himself what is the defect can I complain that the goods are defective or should I say that they are not genuine goods they are not the genuine brand so what remains the what sort of defense will remain if I have asked for branded goods will it fall within the implied conditions under the sale of goods act so we have to bring out the sale of goods act and read it in detail now what about 250,000 I have not asked for it it's bad by limitation if you can see or it's very close to limitation so what if he doesn't file a suit then I have no opportunity to claim the amount if he files a suit I will ask him perhaps ask her a set off because counterclaim has to be within the period of limitation so how do I get that 250 and can I set off let us suppose that the claim of 750 is awarded can I set off the amount I paid for repair of the goods can I set it off against the price so this answer is partly provided in the sale of goods act but we must know the provisions of set off and counterclaim in the CPC so can I claim the advance will it be the counterclaim what is the limitation for that it is very short extremely short and by saying return the advance have I waived the breach have I just said it's okay that's all right I won't claim compensation just give me back my money have I done that when I put those words so here we are interpreting the words of correspondence which has already happened and therefore we have to be conscious of multiple laws their provisions and principles and sometimes it's like a game of chess you put one put forward and you find you have to look at what other provisions are saying this this decision becomes easy if one is more conscious of the laws I'm not saying we should know every provision of every law but we should know the possibility or we should have a judgment that there has to be something in the law which I should look out for now I come to remedies since we are talking of enforcement you know whenever a case for contract comes up there are two phases one is the rights that is claiming that the defendant should have done something and he hasn't so I have a right to get the goods I have a right to have delivery of the goods and so on and that is the main part and therefore because my right is violated or because the defendant has committed breach what is the remedy I get under the law so one of the remedies compensation the law about remedies is peculiar that the law of remedies doesn't give everything which the plaintiff or the aggrieved party of the contract has suffered we ask is he entitled and are there any conditions which must be fulfilled before it is granted is it it can it be granted in this contract so a remedy structure does may not necessarily give the plaintiff everything he wants therefore the plaintiff will have to show his entitlement of the remedy and the defendant may have a defense based on that we all know for example that for the remedy of compensation the party going to court so in our case the seller is going to court he will have to show that the buyer has broken the contract he will have to show that this breach has caused me the loss he will have to show that the loss is caused by the breach I have suffered the loss and that is because of the breach and either it has naturally arisen or it was a contemplation of parties so remote losses are not paid we know Hadley versus Baxonville my loss of profits were not paid because the mill had had stopped this special circumstance was not known to the carrier and therefore loss of profits there was no liability for loss of profits so while the very big contemplation of parties and it is under these right that we say that a plaintiff may have suffered lots of losses because of breach but he cannot claim all of them his claim is restricted by this requirement and then the plaintiff himself cannot just sit down and say I will sit and claim loss he should have taken steps to mitigate or to reduce that loss this is the third paragraph in section 73 so plaintiff comes with a case first that I have a contract and then his case may either we have performed it and give me the agreed amount so he'll have to show the contract he will have to show his performance and therefore he has a right to claim the money he may say I have performed I'm ready to perform so compel the other party to perform and then we ask well are all the conditions for the grant of specific performance fulfilled he may say there is a breach I've suffered a loss so give me compensation and then we have to say well are the requirements of 73 fulfilled he says breach loss give me liquidated damages and the law of liquidated damages is in such a state that he will be required to prove his loss and if his loss is more than liquidated damages well he will get only the amount of liquidated damages so the law is at such a state that one must be very clear as to what all proof is required proof of which facts is required if one has a claim for liquidated damages his case may be that the other party has committed breach but the other party has collected under my bank guarantee because he has committed breach and he has collected the amount return to me the amount which he has collected under the bank guarantee he might say why the other party has committed breach so all I want is return the advance to me sometimes the case the contract has become void for example because of impossibility and then he says well the contract has become void but whatever I have worked I should get paid so he claims for the work done and sometimes he says well I have avoided the contract so whatever benefit is there give it back to me there are of course many other types of claims but what I wish to stress is that in each of these cases a different set of facts are going to be important so we have first to decide what sort of case is mine so that we are able to select the facts and this is one more remedy that there was a breach by the other party I gave notice I got it completed from a third party and so my claim is for expenses under section 20 of the amended specifically fact which is a claim for substituted performance now the defendant comes with a case he might say I have no contract or he may say I have not committed breach I have performed or I have offered to perform then he has to bring facts state those facts and he has to prove those facts that he has performed so he is not liable he may come with a case where he is entitled to a defense under the substantive provision of contract law so he may say there's no contract he may say it is void because there's no consideration because there is a mistake he may say that the contract is voidable and I have avoided it because the consent is not free or because the other party has committed breach under section 39 that is refusal 53 that is he has prevented me from performing the contract and 55 is that there's a failure and time is of the sense or he may put up a case that while we substituted a new contract or we changed its terms so I am not bound under what the plaintiff says or he may say together we have cancelled the contract okay or he may say that the plaintiff himself dispensed with or remitted or extended time is under 62 this is 63 or he may say that the contract has become void right because it was contingent or because there is an impossibility and again he has to decide what will be the basis of his claim and he will have to bring facts and prove those facts accordingly he might say that there's a material alteration that the document relating to my contract was with the other party and the other party has made changes in it without my permission in which case the claim under that document is not lying but he may also have defenses relating to the provisions and remedies so if a claim of compensation is made against him then his defense will be well plaintiff has not suffered a loss plaintiff has not proved any loss no loss was caused by the breach but the loss was caused because of some other factor yes there was a loss but what did the plaintiff do to bring it down he has not fulfilled his duty and there is a loss but well I did not know that this loss would arise it was not in contemplation of parties so I'm not liable if it's a suit for specific performance we all know that after 2018 specific performance is no longer exceptional it's no longer discretionary anyone who wants can get it but there are still defenses where the defendant says the plaintiff was not ready unwilling 16 that the contract is of a personal nature or the contract requires constant supervision so don't enforce then if the claim is for rescission under the specific relief act one of the defenses can be that status quo anti cannot be restored so don't grant that remedy so now I come to the end what is the conclusion first of all to have a litigation perspective we should know the laws we should be aware of the interaction of the laws and the different provisions within each law we must appreciate the importance of facts and by that I mean acts acts means actions statements events and conducts so we should be aware of the importance of these in not just the written contract but all these things during proving our case we must be conscious that we cannot change the facts but we but we can interpret conduct right then we have to choose the facts now here is a problem that when we see the facts then we will say which legal provision to apply so in our example we say there's a check so let us file a suit on a check but it is the legal provision which decides the relevant fact so if I'm going to file a suit on a check then we say okay has it dishonored what is the letter the bank has given because that fact assumes importance so these two things actually work in circles and even though the facts come as they are we are always able to interpret so here is some litigation perspective as I said I've only raised questions and I've given a method of thinking I am not a established litigation advocate I am a teacher and I've fulfilled my role as a teacher in making you think so thank you very much it was wonderful to share my views with you if there are questions I'll be able to answer them shall I stop my screen yes ma'am as usual the session was wonderful words cannot express the way you have simply made people understand and this is by Akshay he says breach under section 39 and 55 is a ground to void contract would that not blur the distinction between termination of a contract and a decision of a contract yeah the contract acts allows termination for breach termination I'm using the word which we use as lawyers the words used in these 39 53 and 55 he may put an end or it will be avoidable exception and it's a very old pre-recounting case which says that although the words used in section 39 are put an end to the contract it means that the contract must be rescinded so rescission that is canceling the contract by the action of one party is possible under the contract act only under sections 39 53 and 55 39 is where one party says I will not perform I don't wish to refuse or disables himself from performing 53 is where I want to perform but you prevent me from performing then I have to end it I can't say the contract is over I have to end it and the third is 55 where failure in the date has come and there is no performance but the right of termination is dependent on one more factor was was it the intention of the parties that time was of the sense and in all these cases the contract continues unless it is terminated by the other party that is the party who's agreed by the breach so yes in contract law uses the word rescission we use the word termination so when we give a notice we say I am terminating because you have refused to perform what is the difference between a claim for damages under section 73 and indemnification these days we are seeing indemnification clauses for damages arising from the breach of contract is indemnification clauses the element here does in indemnification clause cover indirect consequential damages as it is believed so right to indemnify means to save a person from loss so if you give me a contract where my client has to sign an indemnity I will not want to because when I say indemnity I am saying well whatever loss you suffer whatever expenses you suffer why suffer why say I will pay this is indemnity of course you will have to prove the loss but the requirements are 73 which is contemplation of parties or which is lost caused by the breach does not apply and very often indemnity clauses are made to cover even litigation expenses and legal expenses which in compensation may not be considered so in compensation it is subject to the provisions of 73 right but indemnity is a promise and promise under indemnity is a claim for an agreed sum it has to be ascertained but it's still a claim for an agreed sum so a person who claims under an indemnity says that look this is the condition and that condition is fulfilled and this is my loss now the court may say this is not your loss out of 100 probably the court may come to a conclusion that 59 is your loss 59 will be paid it's a claim for an agreed sum so if I am giving indemnity first of all I would not want to give it second is even if I give I should be very clear about what sort of expenses it will cover and I would like to put a limiter because otherwise it is unlimited and there are contracts where you come across indemnity and indemnity will not cover consequential losses I mean once I decide to give you indemnity what all it should cover will be negotiated between you and me and how do you define that they say that this contract is the public policy how will you define public policy and then saying that it runs to the public policy in terms of section 23 of the contract right yes even if a law even if there is an earlier judgment saying that a certain type of contract is against public policy I will still attempt to enforce it because the concept of public policy changes and perhaps what was considered against public policy 50 years ago may not be true today the law is not that contracts against public policy are void unlawful but the law is that a contract an agreement is unlawful if the court considers it as against public ones and the concept of public policy that is I think public policy cannot be defined I will not go into how it has been described in different ways but basically the question is that should this activity be encouraged and if it should not be encouraged then the court should stop enforcing it you know this is the thought behind public policy from a litigation perspective what extent is the limitation of liability enforceable what can be limited what cannot be can there be certain discussions on this aspect they're actually entering into what is transactive but that's all right parties can just see parties are free to decide anything so if you and I have a contract and we can very well agree that yes I will be liable to only up to the price of the contract I can say I will be liable only up to unlike things or I can say I will be liable for 10,000 rupees which is liquidated analysis or I can say I will not be liable at all which is exclusion clauses so parties are free to decide so they may put a limit on liability if there's a limit on liability it means that the law should still be proved but beyond that limit it cannot be collected. This by Amar section 27 of the specific relief act we find the use of the phrase voidable or a terminable decision in law is understood to cancel the very origin and format formation of the contract is it right? Usually the word rescission is used where you can rescind under the terms of the contract and terminable is where it is at the auction of one party usually under the terms of the contract I'm sorry resist under the contract law and termination under the contract. If you go to the books on specific relief act the commentaries or they have discussed why the two words are used you may also like to go to the law commission report after which the specific relief act came and you will find a discussion about why the two words are used. One is asking could you please explain the part about claiming of interest as per the enactments as referred earlier. The interest act please go to section three I think it was just let me check it is section three of the interest act there are other sections which deal with fraud trusts etc so do read it's a small act but the sections are very long and the interest act says that first of all can a person claim interest in respect of a contract and the answer is that first of all look at the contract if the contract provides a rate of interest then it can be claimed if the contract clearly says that there will be no interest then interest cannot be claimed or if the contract doesn't specify anything if it's a debt on a written instrument it can be claimed from the way the amount was payable. Would be state of interest the current rate of interest there's a definition of current rate of interest in the act maybe one court may say it is 7.5 another court may say it's 7.25 it can be shown with reference to circulars of the RTI but if it's not a debt on a written instrument then it can be claimed only after notice is given so a party has to give a notice saying I will claim interest at this rate and then only he can claim it and the court will grant only the current rate of interest. This is section 3 and there is lots of commentary under section 3 so you can go to a book on interest act and read it or look at case law under it. Eira says that it is a delight to hear you your lecture after many years since law college and looking forward for more sessions for you. Thank you. This is why does this question on chat shall I open chat. No ma'am what they are doing is Akshay sending it to me privately it says why does the specific relief act in section 27 refer to the phrase voidable or terminal when the contractor does not make any reference to concept of termination can you explain section 27 decision in detail and how does it play out in a litigation. Section 27 yes I mean I discussed just now what is voidable and what is terminable. Terminable means a party has the power to bring it to an end it can be terminated. As regards the decision the it is a remedy so you can go to court and say rescind means very usually it is rescinded by giving a notice and then you ask for a declaration that the decision is valid the prayers may vary and if you go to the CPC there are forms in giving prayer giving the planes and in those planes you can read up those prayers. The thing is that it is not at all necessary to file a suit for a decision because all that the contract law requires is that you communicate so if I say that my contract was caused by undue influence it is enough if I give a notice saying I avoid I rescind I terminates the contract right that is enough and that ends the contract and I can actually get back my money but why is a decree required let us suppose that I have gifted property and I'm challenging it on the basis of undue influence I will challenge it but no the gift will not be undone remember gifts are registered so the gift will not be undone by the authorities unless I have a decree so if I want a decree if I want reliefs so I will rescind and I want to back the money then I may be required to go to court so whenever a suit for decision is filed it can either claim rescission or it can claim a declaration that the contract is validly rescinded this is an aspect which you can read up in commentaries. Before I take the next question I will just read a few of your students have joined Priyanka Kulkarni says ma'am happy to attend your session and it is amazing as usual and then Ashwarya says it's almost after seven to eight years I'm hearing you after leaving ILS college it's always a pleasure to hear you indeed a great session you can only in those those who are watching us virtually on the YouTube as well that's true it resonates with them and ma'am normal question is one has just sent me a text what do you mean by when we write the time is the essence of the contract yes it's time of the essence basically parties must perform at the specified time and this is not given in the contract act that you must perform in the specified time and sorry my mobile phone fell down it is not given in the contract act that you must perform there's a general obligation that parties must fulfill their obligation or they must perform what they have agreed it is on this basis that we say that parties must perform at the specified time now if someone has not performed at that time has he committed to reach the answer is yes and let us suppose that he performs after a delay can compensation be claimed because of the delay the answer is yes that was the that was the claim in Hadley versus Baxindade and if the special circumstance were made known to the carrier then the carrier would have got that compensation so delay is the breach and for that breach if there's a loss then that loss can be claimed so section 55 what is the essence of it you know I mentioned to you that we must understand the essence of what is the purpose of each provision the purpose of time of essence provision in 55 p is can I terminate simply because you have failed to perform what is meant by termination ending why would I want to terminate because I want to end our relationship so that I'm free to buy from outside or I'm free to sell outside I am free from this contract because I can look for other options and I'm no longer bound under it so even if the seller way to deliver goods I should be able to say no I will not take them because you failed but can I say that only if I have terminated so our question is that can there be termination just because somebody has failed and my answer is yes if the contract provides but if the contract doesn't provide what does the contract act say now when I say contract provides there are conflicting judgments about this so I'm that's why I said I'm not getting into case law because every judgment is based on the peculiar facts of each case so now what if the contract is not stating it then can there be termination because one party has failed to perform first of all one party failing to perform does not end the contract can the other party end it and the answer is that only if time is of essence and the word is not whether time is of essence the wording is if it is the intention of the parties that time is of essence so the court will have to see in each case whether time is truly of essence or not and that is where we say okay look what do they say do they say time is of essence very good if they have said it then they think time is important but then the same contract also is saying that if there's a delay then thousand rupees per day will be paid and naturally time is not important because they have made provision for delay so stating time of essence again does not carry meaning I would put it like this that in a contract is worth saying that time is of essence it can be said that time is of essence for this obligation and the other obligation you can keep quiet there's no harm in stating time is of essence but whether it is truly of essence or not really the matter is really about termination. Sagar Salunke says it was a wonderful attending your lecture after 23 years. Oh good. It's good that students remember us even after 20 years. It's a famous saying Guru Govind Aukhade Kakela Gupai Bali Hari Guru Avni Guru Govind Diyo Bhatai and they say that gurus are the right who take us to the right light and this is Nithya who says can a suit for specific performance of a one-time settlement be filed against a bank for enforcement. I didn't get the whole question I think just a minute just please give me a minute. Can a suit for specific performance of a one-time settlement be filed against a bank for enforcement. Yes it can be because the law is now so simple of course I assume that there is no arbitration clause but the law and arbitrators can grant specific performance but the law is very simple if you want specific performance you ask for it but what is it that you want to ask and can that be enforced by the court that is the question. You will have to he or she will have to read the Sardar Associates and latest judgment of Justice Emma Shaw on the OTS on the bank's policy. Right. There's one more student who has appreciated you before we part for a bit. It says Kosh Kulkarni thank you ma'am for the amazing session. We are the current students of ILS and we keep looking forward for your session so we can only say that they can connect with you on the LinkedIn for the latest updates of all the sessions not only on the Beyond Law but even otherwise. Of course. So thank you ma'am for your amazing session as usual it was spot on and we believe that we will continue this knowledge sharing on this platform. Thank you everyone stay safe stay blessed and tomorrow we have a session on the English polishing rammer the use of apostrophes what is the significance that Mr. Vesant preferred them but do stay connected with us tomorrow at 6 p.m. Thank you ma'am once again on behalf of the team of Beyond Law and all your students and the students of law who are always learning from your knowledge share. Thank you. Namaskar. Can I leave?