In Rolta v MIDC, the Bombay High Court has recently considered some important questions relating to the doctrine of mutual mistake, damages for breach of contract and restitution. It is worth examining the judgment closely as it appears to depart from some well-established principles of contract law. The case arose out of a Memorandum of Understanding (‘MoU’) which Rolta and MIDC entered into in...
The Supreme Court of India and the law of unjust enrichment
These are troubled times for the law of unjust enrichment in India, so much so that one is forced to ask whether such an area of law at all exists in this country. That is regrettable especially because the High Courts (especially those in Bombay, Madras and Calcutta) gave many powerful and important judgments on this area of the law, particularly between 1900 and perhaps the late 1960s. We began...
Illegitimate pressure in economic duress
Traditionally, duress rendered a contract voidable only if it was physical duress (which involved a threat to the person or belongings of an individual), but following the decision of the Privy Council in Pao On v Lau Yiu Long, the concept of economic duress was also recognised. It is now fairly settled law that there are two essential ingredients for voiding a contract on grounds of economic...
An Unfortunate Judgment: India and the Law of Restitution for Unjust Enrichment
The law of restitution for unjust enrichment* is so well developed in the common law world today that it is impossible to conceive of a coherent system of private law without it. In India, a part of this area is codified in sections 68-72 of the Contract Act, 1872, and some outstanding judgments of the High Courts, particularly before and around the 1950s (see for example Damodara Mudaliar...
Rescission and Repudiatory Breach
When C and R enter into a contract which is breached by R, C can either claim specific performance of the contract, or elect for the breach to have discharged the contract and claim damages. However, in cases where the latter option is chosen, it has been recognized since Johnson v Agnew that the contract continues to remain valid until the date of the repudiatory breach and is discharged only...
The Court of Appeal on the ‘Entire Contract Doctrine’
In any synallagmatic arrangement (such as a contract), it is often necessary to determine at what stage one party is entitled to call on the other to perform. Consider two common cases: (i) A enters into a contract with B which he breaches, B wishes to treat this as a repudiatory breach and avoid the contract; and (ii) A makes an advance payment to B under a contract, which is subsequently...
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