Summary of Recent judgment

Case: Lalman Shukla v Gauri Datt



Date of Order / Judgment: 9th September, 2024

The Matter Heard by Bench: Allahabad High Court, Justice Banerjee

Background

In the case of Lalman Shukla v. Gauri Datt, the plaintiff, Lalman Shukla, was one of the servants of the defendant, Gauri Datt. The dispute arose from a unilateral offer made by Gauri Datt for a reward to anyone who would find and return his missing nephew. Lalman Shukla, who was unaware of the offer when he began his search, found the missing nephew and returned him to the defendant. Gauri Datt refused to pay the promised reward to Shukla, leading to legal action.

Issues
  • 1. Whether Lalman Shukla was entitled to the reward offered by Gauri Datt, given that he was unaware of the offer when he undertook the task of finding the missing nephew.
  • 2. Whether a contract was formed between Shukla and Datt, and if so, under what conditions.
Observation

The court observed that for a contract to be enforceable there must be a mutual agreement and consideration. In this case, the defendant’s offer was a unilateral contract, which required performance of the specified act (finding the missing nephew) for the reward to be earned. However, the performance of the act (finding the nephew) by Shukla was done without knowledge of the offer. The Court observed that, to have a valid contract, there must be some knowledge about the offer to whom the offer is made and the offeree must give his assent or acceptance to the offer. Since Shukla had not acted in response to the offer but rather on his own initiative without the knowledge of the offer, there was no acceptance of the offer at the time of performance.

Decision

The court held that Lalman Shukla was not entitled to the reward. The unilateral contract was not enforceable because Shukla did not perform the act (finding the nephew) in response to the offer but did so independently of the offer. Consequently, there was no acceptance of the offer, and therefore, no contract was formed. Gauri Datt was not liable to pay the reward.

This judgment is about the validity of contract if there exists no acceptance. It explains us about the essentials or requisites of a valid contract and section 3 of the contract act, 1872 which is about communication of proposal and section 2(d), which is about the consideration.