C-37

III NOVICE INTRA MOOT COURT COMPETITION, 2020

BEFORE
THE HON’BLE CITY CIVIL COURT OF MEDITARRENEO

DISPUTE RELATING TO

NON-PAYMENT AND NON-PERFORMNACE OF

THE CONTRACT

CIVIL CASE NO……/2020

In the matter of

THE VERITAS CORPORATION_______________________________THE PLAINTIFF

MR. SOMEL______________________________________________THE DEFENDANT

MEMORIAL FOR VERITAS CORPORATION

THE PLAINTIFF

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 TABLE OF CONTENT

1. LIST OF ABBREVIATIONS……………………………………3
2. INDEX OF AUTHORITIES……………………………………..4
3. STATEMENT OF JURISDICTION……………………………..5
4. STATEMENT OF FACTS……………………………………….6
5. STATEMENT OF ISSUES……………………………….………7
6. SUMMARY OF ISSUES…………………………………………8
7. ARGUMENTS ADVANCED…………………………………….9
ISSUE 1- WHETHER A BINDING CONTRACT FOR THE SALE
OF GOODS HAS BEEN VALIDLY FORMED BETWEEN THE
PARTIES TO THE DISPUTE?
1.1 Was there a valid agreement?.....................................................10
1.1.1 Was there a valid offer?
1.1.2 Was there valid acceptance?
1.2 Was there a valid consideration?.................................................11
1.2.1 Was the consideration at the desire of the promisor?
1.2.2 Was the consideration of some value?

ISSUE 2- WHETHER VERITAS CORPORATION IS RIGHT IN

ASSERTING THAT THE CHANGE IN LABOUR COST IS A
RESULT OF UNFORESEEN EVENT OUT OF THE CONTROL
OF VERITAS CORP?
2.1 Whether Veritas Corporation is right in asserting that the change in
labour cost is a result of unforeseen event out of the control of Veritas
Corp?..................................................................................................12
2.2 Whether Veritas Corp is justified in the raising the price of wine
because of the raise in labour cost due to unforeseen events?............13
8. PRAYER……………………………………………………………14

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 LIST OF ABBREVIATIONS

1. A.I.R All India reporter

2. SC Supreme Court
3. Ors. Others
4. & And
5. Corp Corporation
6. Ltd. Limited
7. Pvt. Private
8. Co. Company
9. IR Indian Railway
10. Jhar Jharkhand
11. Hon’ble Honorable
12. i.e. That is
13. Viz. Namely
14. R&D Ratanlal & Dhirajlal

INDEX OF AUTHORITIES

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1. STATUTES REFERRED
Indian Contracts Act, 1972
Indian Accounting Standards

2. CASES REFERRED

INDIAN CASES-
i. Brogden v Metropolian Railway Company(1877) 2 AC 666
ii. State of M.P. v Gurbachandas Keulish Nath A.I.R 1973 S.C. 164
iii. Durga Prasad v. Baldeo (1880) 3 All 221
iv. M/s Dayal Steel Ltd. & Etc. v. Damodar Valley Corporation,
Calcutta & Ors. AIR 2010 Jhar R 854
v. State of M.P. v Gurbachandas Keulish Nath A.I.R 1973 S.C. 164

FOREIGN CASES-

i. Hyde v Wrench[1840]EWHC J90

ii. White v Bluett (1853) 23 LJ Ex 36
iii. Brogden v Metropolian Railway Company(1877) 2 AC 666
iv. De La Bare v Peasson (1908) 1 KB 280
v. Sonat Offshore SA v. Amerada Hess [1998] 1 Lloyds Rep 145

3. BOOKS REFRRED
Ratanlal and Dhirajlal

STATEMENT OF JURISDICTION

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The Plaintiff has approached the City Civil Court of Meditarraneo u/s 9 of The Code of Civil
Procedure, 1908. The most humbly submits to the jurisdiction of this court and authority
regarding the same.

The parties agree to accept the decision of The City Civil Court as final and binding.

THE PRESENT MEMORANDUM SETS FORTH CONTENTIONS, AND ARGUMENTS

IN THE PRESENT CASE.

STATEMENT OF FACTS

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Somel, a merchant of fine wines was attracted by the vineyards owned by the Veritas
Corporation. These vineyards used to produce three rare collection edition wines, Veri Red,
Veri White, and Veri Gold. Somel got to know about that Veritas Corporation is struggling to
turn a profit and on the brink of shutting down. Somel addresses an email to the CEO of the
Veritas Corporation to buy 10 Barrels of each of the different wines from the coming April
harvest.

EMAIL 1.

Somel is offering to purchase 10 Barrels each of the three wines, 50 Vins a Barrel for total
payment of 1500 Vins. Somel expects the delivery date by April 1, 2020. In return, Somel
wants the confirmation mail with specified quantity and time. He being concerned about the
conditions of Veritas Corporation wrote them back to accept the order rather than going
bankrupt.

EMAIL 2.

Veritas Corporation found the offer reasonable and was thankful to Somel for providing them
business. The Corporation in return asked for the address of delivery, described the mode of
payment as half via online transfer within two weeks and other half at the time of delivery.
Veritas Corporation put forth some conditions that, it would not be liable for any damage
caused to the good or delay caused in delivery of the goods on account of an unforeseen
event beyond the reasonable control of the Corporation including:

a) Floods, earthquakes and tsunamis;

b) Meteor showers, and alien attacks;
c) War, terrorist attacks and hostilities;
d) Change in law; and
e) Change in the geographical borders of Veritas.

EMAIL 3.

Somel thanked Veritas for their responses. Somel wrote back the address as Vinonia City. He
sent the digital copy of the receipt of the online transfer of 750 Vins.

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Having not heard back about his order over a month Somel sends an email to keep a track on
the delivery.

EMAIL 4.

Veritas Corporation sited an excuse of nationwide labour strike and due to the consequent
labour shortage there was a severe shortage in the number of barrels of each of the wines. The
price per barrel has increased to 75 Vins a barrel. Accordingly, Somel has to either accept a
lower quantity of barrels for his 1500 Vin or pay the additional amount required for his
original order of 30 barrels.

EMAIL 5.

Somel was disappointed by the mail and demanded a refund of his 750 Vins. His payment
was in a good faith and he claimed that there was never a concluded contract between them.
He also claimed that he will not foot the bill for the Corporation’s inability to keep their
labour in check.

EMAIL 6.

Veritas corporation refuses the refund of Somel’s part payment and asserted that there was a
valid contract between the parties. They claimed that nationwide labour strike was an
unforeseen event beyond the control of the Corporation. They said that they will go ahead
with the shipping of 30 barrels at the enhanced price.

MATTER OF DISPUTE

Veritas went ahead with the shipping but received no response from Somel who once again
refuses to pay citing the lack of contract between the parties. Aggrieved by this action,
Veritas sues Somel for non-payment of his part of the contract. Somel wants the refund back
and Veritas claims the payment to be done as soon as possible.

ISSUE RAISED

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1. WHETHER A BINDING CONTRACT FOR THE SALE OF
GOODS HAS BEEN VALIDLY FORMED BETWEEN THE
PARTIES TO THE DISPUTE?

2. WHETHER VERITAS CORPORATION IS RIGHT IN

ASSERTING THAT THE CHANGE IN LABOUR COST IS A
RESULT OF AN UNFORESEEN EVENT OUT OF THE
CONTROL OF VERITAS CORPORATION?

ARGUMENTS ADVANCED

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WHETHER A BINDING CONTRACT FOR THE SALE OF GOODS
HAS BEEN VALIDLY FORMED BETWEEN THE PARTIES TO THE
DISPUTE?

1.1 WAS THERE A VALID AGREEMENT?

The counsel contends that in the instant case Somel had presented Veritas Corporation
with an offer which was countered by Veritas Corp, by adding its own conditions,
which were finally accepted by Somel. This acceptance was communicated to Veritas
Corp.

1.1.1 WAS THERE A VALID OFFER?

In the present case Somel had offered Veritas Corp. to sell him ten barrels each of
three different varieties of wine, a total of thirty barrels, for 50 Vins per barrel, a total
of 1500 Vins. Veritas Corp countered the offer by adding its own terms and
conditions. This is a valid offer under Section 2(a)1, which defines proposal as when
one person signifies to another his willingness to do or to abstain from doing anything
with a view to obtaining assent of the other to such Act or abstinence. A counter offer
too, is considered a valid offer.2
Therefore, when Somel communicated(signified) his willingness to do an act, that is,
purchasing 30 barrels of wine, with a view to obtaining Veritas Corp’s assent, it
constituted a valid offer. However, when Veritas put conditions in the initial contract,
it communicated its willingness to do the act, that is selling 30 barrels of wine along
with the specified conditions, with a view to obtaining Somel’s assent, it constituted a
counter offer.

1.1.2 WAS THERE A VALID ACCEPTANCE?

In the given proposition, as a reply to Veritas Corp’s counter offer, Somel, in his
second e-mail, provides his address along with a digital copy of the receipt of the
online transfer of 750 Vins, as requested by Veritas Corp. This is a valid acceptance
1
Section 2(a) Indian Contract Act 1972
2
Hyde v Wrench[1840]EWHC J90

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 under Section 83, which provides that performance of the conditions of a proposal, of
the acceptance of any consideration for a reciprocal promise which may be offered
with a proposal, is an acceptance of the proposal, and under Section 94, which defines
implied acceptance as when a proposal or acceptance is made otherwise than words,
the promise is said to be implied.
Here, when Somel accepted the offer, his acceptance was implied by his performance
of the conditions, that is, informing Veritas about his address and a copy of part
payment. Thus, even when his acceptance was not expressed, he indicated by his
conduct that he accepts the offer, making the contract binding.5
As the acceptance given by Somel to Veritas was absolute and unconditional, as was
decided in State of M.P. v Gurbachandas Keulish Nath6, the agreement thus formed is
a valid one.

1.2 WAS THERE A VALID CONDSIDERSTION?

An agreement without consideration is void7. Consideration is that force which
energizes the agreement to be binding on the parties if other conditions for a contract
are complete. An agreement must have consideration for being a contract8 as it makes
the agreement valuable. Consideration in ordinary parlance can be said as value of the
agreement or the price of the promise. In the given case, the money would be the
consideration in exchange of the thirty barrels.

1.2.1 WAS THE CONSIDERATION AT THE DESIRE OF THE PROMISOR?

Consideration is defined when at the desire of the promisor, the promisee or any other
person has done or abstained from doing, or does or abstains from doing, or promises
to do or to abstain from doing something, such act or abstinence or promise is called a
consideration.9 In the instant case, consideration moved from Somel to Veritas Corp,
that is money, at the desire of Veritas Corp. Consideration should be given at the
desire of the promisor not at the desire of anybody else.

3
Section 8 Indian Contract Act 1972
4
Section 9 Indian Contract Act 1972
5
Brogden v Metropolian Railway Company(1877) 2 AC 666
6
State of M.P. v Gurbachandas Keulish Nath A.I.R 1973 S.C. 164
7
Section 25 Indian Contract Act, 1972
8
Section 10 Indian Contract Act, 1972
9
Section 2(d) Indian Contract Act, 1972

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1.2.2 WAS THE CONSIDERATION OF SOME VALUE?
The counsel submits that the English Common Law has always insisted that
“consideration must be of some value in the eyes of the law.”10 It is not, however,
necessary that consideration is for the parties to consider at the time of making the
agreement, not for the court when it is sought to be enforced. This is the English rule
is applicable in India also, for the Explanation 2 attached to Section 25 lays it down so
clearly that “an agreement to which the consent of the promisor is freely given is not
void merely because the consideration is inadequate.”
In the instant case, 1800 Vins was the consideration against the wine, which contains
value in the eyes of law. The consideration (1800 Vins), as fore mentioned, may not
have the adequacy, which will not affect the validity of a contract.11

WHETHER VERITAS CORPORATION IS RIGHT IN ASSERTING

THAT THE CHANGE IN LABOUR COST IS A RESULT OF
UNFORSEEN EVENT OUT OF THE CONTROL OF VERITAS CORP?

.1 WHETHER THE LABOUR STRIKE FALLS WITHIN THE PURVIEW OF AN

UNFORSEEN EVENT?
Recognized under Indian contracts Act, events that can neither be controlled, nor
anticipated, that is, events that are unforeseeable are called Force Majeure. In the case
of State of Madhya Pradesh v Mittal And Company12, an unforeseen event is explicitly
defined as any event due to acts of God or for Force Majeure, such as strikes, break
downs, lock-outs, riots, or any other unforeseen circumstances for which the parties to
the contract did not contemplate and for them no provision is made in the contract. This
definition is affirmed and reaffirmed by several cases including M/s Dayal Steel Ltd. &
Etc. v. Damodar Valley Corporation, Calcutta & Ors.13 And Sonat Offshore SA v.
Amerada Hess14

10
White v Bluett (1853) 23 LJ Ex 36
11
De La Bare v Peasson (1908) 1 KB 280
12
State of Madhya Pradesh v Mittal And Company AIR 1997 MP 176
13
M/s Dayal Steel Ltd. & Etc. v. Damodar Valley Corporation, Calcutta & Ors. AIR 2010 Jhar R 854
14
Sonat Offshore SA v. Amerada Hess [1998] 1 Lloyds Rep 145

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 In the present case, Veritas Corp suffered a labour shortage due to nationwide strike.
Strike, as mentioned, falls within the purview of an unforeseen event. Hence, it is
conclusive that Veritas Corp is correct in asserting that the increased prices were due to
an unforeseen event, that is, the strike.

.2 WHETHER VERITAS CORP IS JUSTIFIED IN RAISING THE PRICE OF

WINE BECAUSE OF THE RAISE IN LABOUR COST DUE TO UNFORSEEN
EVENTS?
In the given case, Veritas Corp raised the price of the wine per barrel to 75 Vins from
50 Vins, effectively increasing the total consideration to 2250 Vins from 1500 Vins.
It justified its stance on the basis of hike in labour cost because of labour shortage,
resulting due to nationwide strike.
According to Indian Accounting Standard, after contract inception, the transaction price
can change for various reasons, including the resolution of uncertain events or other
changes in the circumstances that change the amount of consideration to which an entity
expects to be entitled in exchange for the promised goods or services.15
It can be reasonably inferred that since strike falls within the purview of an uncertain
event, also, there were circumstances that were capable to change the amount of
consideration.
Hence, Veritas Corp is justified in changing the consideration, therefore Somel must be
made liable to pay Veritas Corp the total amount of 2250 Vins, as the performance on
Veritas Corp’s part has already been concluded.

PRAYER

15
Section 87 Indian Accounting Standards (Ind AS) 115

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 Wherefore, in the light of the facts stated, the case sited, issues raised, arguments advanced,
and authorities sited, it is most humbly prayed and implored before the Hon’ble City Civil
Court of Meditarraneo, that it may be graciously pleased to adjudge and declare that:

1. A binding contract for the sale of goods has been validly formed between the parties
to the dispute.
2. Veritas corporation is right in asserting that the change in labour cost is a result of an
unforeseen event out of the control of the corporation, therefore the enhanced price is justified.
3. The Defendant must pay a total amount of 2250 Vins to the Plaintiff

Also, pass any other order that the court may deem fit in the favour of the plaintiff to
meet the ends of equity, justice and good governance.

For this act of kindness, the Plaintiff shall duty bound forever pray.

Respectfully Submitted

Council for Plaintiff

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