LITIGIOSUS FRESHER’S MOOT COURT COMPETITION 2016

TC03

BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL FORUM,

RANCHI

CONSUMER COMPLAINT NO.______/2017

IN THE MATTER BETWEEN

Ashok………COMPLAINANT

Versus

Amazam.in………OPPOSITE PARTY

UNDER SECTION 11 OF CONSUMER PROTECTION ACT, 1986

Memorial on Behalf of Complainant

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TABLE OF CONTENT

ABBREVIATION………………………………………………………………..03

INDEX OF AUTHORITIES……………………………………………………..04

STATEMENT OF JURISDICTION……………………………………………..06

STATEMENT OF FACTS……………………………………………………….07

ISSUES PRESENTED……………………………………………………………08

SUMMARY OF PLEADINGS…………………………………………………..09

PLEADINGS……………………………………………………………………..10

I. WHETHER THERE WAS A CONTRACT BETWEEN THE COMPLAINANT

AND THE OPPOSITE PARTY………………………………………10

A. WHETHER THE LAST CLAUSE OF THE TERMS AND CONDITIONS IS

ARBITRARY……………………………………………………..11

II. WHETHER THERE WAS REASONABLE BASIS TO PRESUME LOW PRICES

DURING BIG MILLION SALE……………………………………...15

PRAYER………………………………………………………………………….16

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ABBREVIATION

 & - and
 T&C - Terms and Condition
 Edn. - Edition
 Pg. - Page
 ¶ - Paragraph
 SC - Supreme Court
 Raj - Rajasthan
 Rev. - Revised
 Pet. - Petition
 AC - Appeal Cases
 Ors. - Others
 V. - Versus
 LR - Law Review

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INDEX OF AUTHORITIES

STATUTES REFERRED-

 The Indian Contract Act,1872

 Consumer Protection Act, 1986
 Information Technology Act, 2000
 Competition Act, 2002

CASES REFERRED-

 L.I.C. of India v. Consumer Education and Research Centre and ors.

[(1995)SCC(5)482]
 Central Inland Transport Corporation Ltd. v. Brojo Nath Ganguly
(AIR 1986 SC 1571)
 D.C.M. Ltd. v. Assistant Engineer (HMT Sub-Division), Rajasthan State
Electricity Board, Kota (AIR 1988 RAJ 64)
 Snapdeal v. Nikhil Bansal, Rev. Pet. No. 697/2016 (NCDRC, New Delhi, May
2016)
 Motilal Padampat Sugar mills Ltd. v. State of Uttar Pradesh (AIR 1979 SC 621)
 Misa v. Curie (1876) 1 AC 554

OTHER AUTHORITIES-

 103rd Law Commission of India Report, Unfair Terms in Contract.(May 1984)

 199th Law Commission of India Report, Unfair (Procedural & substantive) Terms
in Contract.(August 2006)
 Bryan A. Garner, Black’s Law Dictionary, West Publishing Co., USA, 9th Edition

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BOOKS REFERRED –

 Avtar Singh, Contracts and Specific Relief(Eastern Book Company, Lucknow,

Eleventh Edition, 2013)
 Nilima Bhadbhade, The Indian Contract & Specific Relief Acts, Vol.1(Lexis
Nexis, Haryana, 14th Edn.2013)
 Ravindra Kumar Singh, Law Relating to Electric Contract(Lexis Nexis,
Haryana,1st Edn. 2014)
 Nandan Kamath, Law Relating to Computers Internet & E- Commerce(Universal
Law Publishing, Delhi, 5th Edn.2012)

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STATEMENT OF JURISDICTION

The Complainant has approached the Court of Law under Section 111 of Consumer Protection
Act, 1986.

1
1) Subject to the other provisions of this Act, the District Forum shall have jurisdiction to entertain
complaints where the value of the goods or services and the compensation, if any, claimed ''does not exceed
rupees twenty lakhs.

A complaint shall be instituted in a District Forum within the local limits of whose jurisdiction,—

(a) the opposite party or each of the opposite parties, where there are more than one, at the time of
the institution of the complaint, actually and voluntarily resides or carries on business or has a
branch office or personally works for gain, or

(b) any of the opposite parties, where there are more than one, at the time of the institution of the
complaint, actually and voluntarily resides, or carries on business or has a branch office, or
personally works for gain, provided that in such case either the permission of the District Forum is
given, or the opposite parties who do not reside, or carry on business or have a branch office, or
personally work for gain, as the case may be, acquiesce in such institution; or

(c) the cause of action, wholly or in part, arises.

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STATEMENT OF FACTS

 Ashok ordered a Play Station Controller from amazam.in at the rate of ₹10 per controller.
 The market price of the Controller was ₹1900
 He received a confirmation mail after making online payment.
 Confirmatory mail stated “Thank you for shopping at amazam.in! Please review the terms
and condition on our website. These terms and condition govern this contract which is
provided for your reference.”
 He received another mail next day stating – “We are writing to inform you that price of the
play station was unfortunately incorrect at the time of placing your order. Despite our
best efforts, with the millions of items available on our website, pricing error can
occasionally occur. In our Pricing and Availability Policy on our website we state that
where an item’s correct price is higher than our stated price, we will cancel the order and
notify you of the cancellation.
 Ashok brought this action against amazam.in.

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ISSUES PRESENTED

I. WHETHER THERE WAS A CONTRACT BETWEEN THE COMPLAINANT

AND THE OPPOSITE PARTY?

A. WHETHER OR NOT THE TERMS AND CONDITIONS BE TERMED

ARBITRARY?
II. WHETHER THERE WAS REASONABLE BASIS TO PRESUME LOW PRICES
DURING BIG MILLION SALE?

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SUMMARY OF PLEADINGS

I. WHETHER THERE WAS A CONTRACT BETWEEN THE COMPLAINANT

AND THE OPPOSITE PARTY?

It is humbly contended before the Hon’ble Forum that, there was a contract between the
complainant and the opposition party as the intention of getting into the contract was clear from
the side of opposite party and as per the Doctrine of Standard Contract Contra Preferentem, the
last clause of T&C was legally unsustainable. This clause was arbitrary in nature as the
complainant had no choice but to exceed to the terms presented to him. Thus, it came under the
purview of Standard form of Contract.

II. WHETHER THERE WAS REASONABLE BASIS TO PRESUME LOW PRICES

DURING BIG MILLION SALE?

It is humbly contended before the Hon’ble Forum that, as it was not explicitly mentioned
over the website about the specific sale of products of different category else it was
unreasonable for the Complainant to believe it to be a specific sale limited to some of the
products.

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PLEADINGS

I. WHETHER OR NOT THERE WAS A CONTRACT BETWEEN THE

COMPLAINANT AND THE OPPOSITE PARTY?

It is humbly contended before the Hon’ble Forum that, there was a contract between amazam.in
and Ashok as ‘An Electronic message sent by an information system programmed by or on
behalf of originator2 to operate automatically shall be attributed to the originator3.Since, by this it
is clear that the opposition party had an intent to enter into the contract.

Since the automated mail read as “Thank you for shopping at amazam.in! Please review the
terms and condition on our website. These terms and condition govern this contract which is
provided for your reference.”Amazam.in in its automated mail explicitly mention about ‘this
contract’, though this is not unreasonable for the complainant to believe that the other party has
accepted the proposal. This gives rise to the ambiguity doctrine i.e. ‘Contra Proferentem’4 since;
there was offer from the side of Complainant which was accepted (as per the doctrine of Contra
Proferentem).

The principle of promissory estoppel is stated as:

Where one party by his words or conduct made to the other a clear or unequivocal promise
which is intended to create a legal relationship or affect a legal relationship to arise in the future
knowing or intending that it would be acted upon by the other party, the promise would be
binding on the party making it and he would not be entitled to go back upon it.

2
Under sec.(2) clause (za) of the Information Technology Act, 2000, ‘originator’ means a person who sends,
generates, stores or transmits any electronic message or causes any electronic message to be sent, generated, stored
or transmitted to any person but does not include intermediary.

3
The Information Technology Act Sec.11(c)

4
As per the Black’s Law Dictionary it is also known as “interpretation against the draftsman” is a doctrine of
contractual interpretation providing that, where a promise, agreement or term is ambiguous, the preferred meaning
should be the one that works against the interests of the party who provided the wording. Since in this case the
Ambiguous wording were provided by the website. The doctrine is often applied to situations involving standardized
contracts or where the parties are of unequal bargaining power.

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In this case the company is bound for the performance of contract by the virtue of promissory
estoppel.5

There was a valid consideration from both the sides as controllers from one side and the payment
from other. In the definition given by LUSH J in Misa v. Curie6 “A valuable consideration in the
sense of the law, may consist either in some right, interest, profit, or benefit accruing to one
party, or some forbearance, detriment, loss or responsibility given, suffered or undertaken by the
other.”

A. WHETHER OR NOT THE LAST CLAUSE OF TERMS AND CONDITIONS BE

TERMED ARBITRARY?

The terms and conditions by amazam.in were arbitrary as the availability and pricing policy of
amazam.in stated that whenever the price of item is higher than the price stated by their site they
have the right to cancel the order, thus this in turn is ‘Contract of Adhesion’ or ‘Standard form of
Contract’ or ‘Boilerplate Contract’ where one party is in such a position that the other party does
not have any option other that to ‘take it or leave it’, basically it is a legally binding agreement
between two parties to do a certain thing, in which one side has all the bargaining power and
uses it to write the contract primarily to his or her advantage.

In Life Insurance Corporation of India v. Consumer Education and

Research Centre and others7 the Hon'ble Supreme Court has held that "if a contract or a clause in
a contract is found unreasonable or unfair or irrational one must look to the relative bargaining
power of the contracting parties. In dotted line contracts there would be no occasion for a weaker
party to bargain or to assume to have equal bargaining power. He has either to accept or leave
the services or goods in terms of the dotted line contract. His option would be either to accept the
unreasonable or unfair terms or forego the service forever. With a view to have the services of
the goods, the party enters into a contract with unreasonable or unfair terms contained therein
and he would be left with no option but to sign the contract".

5
Motilal Padampat Sugar mills Ltd. v. State of Uttar Pradesh AIR 1979 SC 621.
6
(1876) 1 AC 554.
7
[(1995)SCC(5)482].

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In the above case, the Complainant humbly submits that various courts through
their ruling have shown a trend against the unreasonable terms and conditions by their judgment
as in the case of Central Inland Transport Corporation Limited v. Brojo Nath8, The Hon'ble
Apex Court while giving some illustrations of unreasonable and unfair clauses in contracts,
based on unconscionable bargaining in Para 90 of the decision and explaining the scope of
expression "public policy", in Para 93 held in Para 94 that the type of contracts to which the
principle formulated by us above applies, are not contracts which are tainted with illegality, but
are contracts which contain terms, which are so unfair and unreasonable that they shock the
conscience of the court. It is apt to reproduce the relevant extract of para 90 as under:-

"¶90, “This principle is that the courts will not enforce, and strike down an unfair and
unreasonable contract, or an unfair and unreasonable clause in a contract, entered into between
parties who are not equal in bargaining power. It will apply where the inequality is the result of
circumstances, whether of the creation of the parties or not. It will apply to situations in which
the weaker party is in a position in which he can obtain goods or services or means of livelihood
only upon the terms imposed by the stronger party or go without them. It will also apply where a
man has no choice, or rather no meaningful choice, but to give his assent to a contract or to sign
on the dotted line in a prescribed or standard from or to accept a set of rules as part of the
contract, however unfair, unreasonable and unconscionable a clause in that contract or form or
rules may be.

Thus courts will not enforce and will, strike down an unfair and unreasonable contract or an
unfair and unreasonable clause in a contract, entered into between parties who are not equal in
bargaining power. Since, the Hon’ble Supreme Court struck down the clause in the above case
considering it to be unreasonable and unfair, the last clause sought to be relied upon by the
Opposite Party should be discarded by the Hon’ble Forum.

8
(AIR 1986 SC 1571)

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The Law commission in its report over the same felt it necessary to mention some of the points
that are –

a. a specific definition of ‘procedural unfairness’9 and provide specific guidelines for

judging if there is procedural unfairness, and
b. A specific definition of ‘substantive unfairness’10 and provide specific guidelines for
judging if there is substantive unfairness.
c. To list remedies which can be granted to relieve parties from procedural and
substantive unfairness.
One other relevant provision which needs to be discussed is Section 23 of the Contract Act: This
deal with ‘substantive’ matters which invalidate a contract but does not refer to
‘unconscionability’ specifically.”11
What considerations and objects are lawful and what not.12
The consideration or object of an agreement is lawful, unless –
it is forbidden by law; or
is of such a nature that, if permitted, it would defeat the provisions of any law; or
is fraudulent; or
involves or implies injury to the person or property of another, or
the Court regards it as immoral or opposed to public policy.
The section does not speak of ‘unconscionability’ as one of the grounds. In each of these cases,
the consideration or object of an agreement is said to be unlawful. Every agreement of which the
object or consideration is unlawful is void

9
‘Procedural unfairness’ is whether there is unfairness in the manner in which the terms of the contract are arrived
at or are actually entered into by the parties, or in the circumstances relating to the events immediately before the
entering into the contract, or in the conduct of the parties, their relative position, or literary knowledge, or whether
one party had imposed standard terms on the other or whether the terms were not negotiated. These and other
circumstances relate to procedural unfairness.
10
‘Substantive unfairness’ is that a term by itself may be one-sided, harsh or oppressive or unconscionable and
therefore unfair. One party may have excluded liability for negligence or for breach of contract or might have
imposed terms on the other which are strictly not necessary or might have given to himself power to vary the terms
of the contract unilaterally etc. Such terms could be unfair by themselves.
11
199th Law Commission of India Report, Unfair (Procedural & substantive) Terms in Contract.(August 2006).
12
Sec.23, Indian Contract Act, 1872.

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Thus, from the above report it is clear that the last clause of the terms &
conditions of the contract falls within the scope of “unconscionable” contract as the company
has exercised Duress over the complainant by including arbitrary terms and conditions.
In the case of D.C.M. Ltd. v. Assistant Engineer (HMT Sub-Division), Rajasthan State
Electricity Board, Kota13 the division bench consider the question whether the Rajasthan State
Electricity Board functioning under the Electricity Act of 1910 and the Electricity (Supply) Act,
1948 could in exercise of its powers under Section 49 of the Supply Act require the consumer-
appellant before them to pay by way of minimum charges at nearly three times the normal rate
charged from other consumers being heavy industries consuming heavy demand of 25 MW.
Even though the appellant before them, D.C.M. Ltd., had entered into such an agreement with
the Board it was held that the said term in the agreement was unreasonable and consequently the
demand of such excessive minimum consumption charges was not justified and could not be
countenanced on the touchstone of Article 14 of the Constitution of India as the Electricity Board
was an instrumentality of the State. The Court in this connection had to consider the nature of the
written agreements entered into by the consumers of the electricity with the Board and the
further question whether an apparently inconceivable and unjust term in the written contract
could be enforced by the Board against the consumer.
In Case Of Snapdeal v. Nikhil Bansal14 Snapdeal had the business of online shopping (E-
Commerce market place), under the name of Snapdeal.Com. The complainant claims to have
placed an order with the petitioner for purchase of an Apple iPhone 5S on 31.7.2014, pursuant to
an offer which stipulated the price of the mobile phone at Rs.46, 719/- with a discount of Rs.46,
651/-, meaning thereby that an Apple iPhone 5S 16GB was sold to the complainant for a net
price of only at Rs.68/-, the company failed to deliver the product and argued the technical
glitches over the website which led to such a blunder in pricing of the phone though the court
gave judgment in favor of the complainant.

In the above case, the Complainant humbly submits that as in the above case, courts through its
ruling has shown a trend that despite of the technical glitches over the website, the website is
liable to complete the performance of its contract.

13
AIR 1988 RAJ 64
14
Snapdeal v. Nikhil Bansal, Rev. Pet. No. 697/2016 (NCDRC, New Delhi, May 2016)

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II. WHETHER THERE WAS REASONABLE BASIS TO PRESUME LOW PRICES

DURING BIG MILLION SALE?

It is humbly contended before the Hon’ble Forum that, as it was not explicitly mentioned over
the website about the specific sale of products of different category else it was unreasonable for
the Complainant to believe it to be a specific sale limited to some of the products, as a person
with common diligence has such knowledge to read the advertisements which are being
displayed interactively over the webpage as well the advertisement over the website displayed
the product at ₹10 which was inclusive of the delivery charges, and as seen over all other E-
commerce website any product with such a less price has an additional of delivery charge which
is added after the displayed product is added to cart so in this case the pricing was not the only
technical malfunctioning. Thus, the argument by the opposite party of being at the mistake due to
thousands of products over website should not be taken under consideration and should validate
the contract between the Complainant and the opposite party.

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PRAYER

Wherefore in lights of facts stated, authorities cited, issues raised and pleadings presented

It is most respectfully prayed before the Hon’ble Forum that it may be pleased to adjudge and
declare that –

1. There was a Contract between the Complainant and Opposite Party.

2. The Opposite party is Liable to deliver the order and also compensate for the
expenses incurred in the course of the present proceedings.
3. The Opposite Party will pay costs for the harassment caused to the Complainant
that occasioned from its failure to abide by the contract.

Or pass any other judgment or order that may deem fit in larger interest of justice.

All of which is most respectfully submitted on behalf of

Complainant

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