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Landmark Cases in Contract Law in India

Contract law plays a crucial role in the Indian legal system as it governs agreements between parties. The country has witnessed several landmark cases in contract law that have shaped its legal landscape. In this article, we’ll explore some of the most significant cases in the field of contract law in India.

1. Balfour v. Balfour (1919)

This case revolves around the concept of an ‘agreement to agree,’ and the judgment lays down that such agreements cannot be enforced. The case involved a husband and wife who had made an informal agreement that the husband would pay the wife a monthly sum as maintenance while he was away in another country. However, the husband failed to honor the agreement, and the wife sued him. The court held that since it was an informal agreement, and there was no intention to create legal relations, the agreement was not enforceable.

2. Carlill v. Carbolic Smoke Ball Co. (1893)

This is a landmark case that deals with the issue of unilateral contracts. The Carbolic Smoke Ball Company had advertised a product that claimed to provide immunity against flu and other respiratory diseases. The advertisement stated that the company would pay a sum of £100 to anyone who contracted the disease after using the product. Miss Carlill bought the smoke ball but still contracted flu and sued the company to claim the prize. The court held in favor of Carlill, stating that the advertisement was an offer that was accepted by the act of buying the product.

3. Satyabrata Ghose v. Mugneeram Bangur & Co. (1954)

This case deals with the principle of frustration of contract. The petitioner, Satyabrata Ghose, had taken a lease from the respondent, Mugneeram Bangur & Co., for carrying out mining operations. However, due to the nationalization of the mines, the lease was rendered invalid. The petitioner sought a refund of the amount paid but was denied by the respondent. The case went to court, which held that the lease had been frustrated due to the nationalization of the mines, and the petitioner was entitled to a refund.

4. Mohori Bibee v. Dharmodas Ghose (1903)

This is a prominent case that deals with minors` contracts. The case involved a minor, Dharmodas Ghose, who had mortgaged his property to a moneylender, Mohori Bibee. The minor was not aware that he could not enter into a valid contract. The court held that a contract with a minor was void ab initio and that Mohori Bibee could not enforce the mortgage.

5. M/S Alopi Parshad & Sons Ltd. v. Union of India (1960)

This case is significant because it introduced the concept of the implied term of price in contracts. The petitioner, Alopi Parshad & Sons Ltd., had entered into a contract with the Union of India to supply goods. However, the cost of the goods increased due to inflation, and the petitioner sought an increase in price. The court held that in a contract for goods, the price is an implied term, and if the cost of production increases, the price can also be revised.


The Indian legal system has witnessed several landmark cases that have contributed to the development of contract law. These cases have brought clarity to issues related to agreements, unilateral contracts, frustration of contracts, minors` contracts, and the price implied term. These rulings have set legal precedents and are still relied upon to this day.