DEPAR DEPARTME TMENT NT OF LAW LAW OF DHAKA DHAKA UNIVER UNIVERSIT SITY Y GRAND INTRA-MOOT COURT COMPETITION
In the Hon’ble High Court of the Supreme Sup reme court of Bangladesh
X-treme Ltd. …………...………………………………………………………… (Appellants) V. Mr.Muktadir ….…………………………………………………………………(Respondents)
On submission to the Hon’ble High Court of the Supreme court of Bangladesh
Memorial Memorial on behalf behalf of the Appellan Appellantt ‘X-treme Ltd.’
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TABLE OF CONTENTS TABLE OF CONTENTS .............................................................................. 1 INDEX OF AUTHORITIES ....................................................................... 2 STATEMENT OF JURISDICTION .......................................................... 4 SYNOPSIS OF FACTS ........................................................................... 5 STATEMENT OF ISSUES ........................................................................ 8 SUMMARY OF ARGUMENTS ................................................................. 9 ARGUMENT ARGUMENTS S ADVANCED ADVANCED ...................................................................... 10 I.WHETHER X-TREME WAS BOUND BY ITS ORIGINAL PROMISE TO GIVE THE 50% DISCOUNT ?........... 10
A. That there was no consideration for the promise............................................ promise................................................. ..... 10 B. That the principle in Williams V. Roffey is not applicable a pplicable here. ...................... ...................... 11 II. WHETHER X-TREME WOULD BE ESTOPPED BY THE LATER PROMISE P ROMISE TO ACCEPT TK.100000 IN FULL SETTLEMENT OF THE BALANCE?....................................... BALANCE?.......................................................... ................... 12
A. That there was no binding settlement .................................. .................................. 12 B. That it was not inequitable to allow X-treme to withdraw the promise............................... promise.................................................. ................................... .................. .................. ...................... ...... 14 PRAYER
........................................... .............................................................. ...................................................... ................................... 16
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INDEX OF AUTHORITIES
A. CASES 1. WILLIAMS V. ROFFEY BROS & NICHOLLS (CONTRACTORS) LTD.[1991] 1 QB 1 2. WILLIAMS V. BAYLEY (1866) LR 1 HL 200 3. HUGHES V. METROPOLITAN RAILWAY CO (1877) 2 APP CAS 439 4. D & C BUILDERS V. REES[1966]2 QB 617 5. CENTRAL LONDON PROPERTY TRUST LTD V. HIGH TREES HOUSE LTD[1947]KB 130 6. FOAKES V. BEER (1884) 9 APP CAS 605
7. PINNEL’S CASE(1602) 5 CO REP 117 A
B. BOOKS 1. MUHAMMAD EKRAMUL HAQUE “LAW OF CONTRACT ”.
2. MULLA, “INDIAN CONTRACTS AND SPECIFIC RELIEFS ACT”, (LEXISNEXIS BUTTERWORTHS INDIA, 13TH EDITION, 3RD REPRINT, NEW DELHI) (2008)
3. “CHITTY ON CONTRACTS”(SWEET AND MAXWELL, 25TH EDITION, VOL.1 & 2(1983)
4. EWAN McKENDRICK, “LAW OF CONTRACT”,8TH EDITION 5. C.A. MACMILLAN & R. STONE , “ELEMENTS OF THE LAW OF CONTRACT”.
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6. MAJOR & TAYLOR, “LAW OF CONTRACT ”, 9TH EDITION. 7. TREITEL, G. „LAW OF CONTRACT‟ (SWEET AND MAXWELL, 8TH EDITION, INDIA) (2006)
C.
DICTIONARIES
1. BLACK, HENRY CAMP BELL: ‘BLACKS LAW DICTIONARY’, 9 TH EDN., CENTENNIAL ED. (1891-2001). 2. AIYAR, RAMANATHA P.: “THE LAW LEXICON”, WADHWA & COMPANY, 2ND EDN. NAGPUR (2002). 3. CURZON. L. B: “DICTIONARY OF LAW”, PITMAN PUBLISHING, 4TH EDN. NEW DELHI (1994). 4. GARNER, BRYAN A.: “A DICTIONARY OF MODERN LEGAL USAGE”, OXFORD UNIVERSITY PRESS 2ND EDN. OXFORD (1995). 5. GREENBERG, DANIEL AND ALEXANDRA, MILLBROOK: “STROUD’S JUDICIAL DICTIONARY OF WORDS & PHRASES”, VOL. 2, 6TH EDN., LONDON: SWEET & MAXWELL (2000).
D.
STATUTORY COMPILATIONS
1.
THE CONTRACT ACT, 1872
2.
THE CODE OF CIVIL PROCEDURE(CPC),1908.
E.
INTERNET SITES
1.
http://www.findlaw.com
2.
http://www.bdlaws24.blogspot.com
3.
http://www.clc.bd.org/
4.
http://www.jstor.org.
5.
http://www.lawersnjurists.com
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STATEMENT OF JURISDICTION
The Appellants have approached to the High Court Division of Supreme Court basing their arguments upon section 2(d),(e),and (g) of the Contract Act 1872 while going for appeal, a right enshrined in section 96 of the Code of Civil Procedure 1908, against the judgment in the X-treme Vs. Mr. Muktadir case. The judgment was handed down by the District Court.
“96. Appeal from original decree.
(1)save where otherwise expressly provided in the body of this code or by any other law for the time being in force, an appeal shall lie from every decree passed by any court exercising original jurisdiction to the court authorized to hear appeals from the decisions of such court. (2)An appeal may lie from an original decree passed ex parte. (3) No appeal shall lie from a decree passed by the Court with the consent of parties.”
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SYNOPSIS OF FACTS
X-treme Ltd & Mr. Muktadir Mr. Muktadir Ahmed booked an all-inclusive holiday with X-treme Ltd, a holiday company specialising in extreme sport package deals. The holiday was 7 days long, with a different extreme sporting activity being scheduled for each whole day. The cost was Tk. 300000, with Tk. 100000 paid up front to secure t he booking and the balance upon completion of the holiday. He chose X-treme as he had used them in the past and had always been happy with the service they provided. REDUCTION OF THE COST OF HOLIDAY Later, Mr. Muktadir discovered that a friend going on the same holiday package had received a 50% discount on the cost of his holiday via an email voucher. Muktadir had registered his details on the X-treme website at the same time as his friend, but had not received the same email voucher. Having unexpectedly lost his job, Mr. Muktadir telephoned X-treme, to ask for the discount to be applied to the balance of his holiday as he feared he may not be able to afford to pay it otherwise and would have to cancel the holiday, and explaining that he was a loyal customer. Thinking that they may obtain further custom from him if they acceded to
Muktadir’s wishes, X-treme’s area manager orally agreed to the reduction in price
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SETTLEMENT OF THE ACCOUNT
The holiday went well, as planned – Muktadir had a great time hang-gliding, white-water rafting, abseiling and the like. X-treme then sent their invoice, asking for Tk. 200000. Muktadir protested vehemently, saying that X-treme should not renege on its earlier promise of the 50% discount on the balance, and saying that he would only pay Tk. 100000, as agreed. He then sent a cheque for this amount and X-treme wrote back to say the account had been settled.
The DISPUTE
X-treme suffered a downturn in business due to the credit crunch. They decided to seek to claim the Tk. 100000 from Muktadir, arguing that they were not bound to
the area manager’s promise as no consideration had been given for it. They further argued that, if the court agreed that the earlier promise was not binding upon them,
the later acceptance of Muktadir’s cheque for Tk. 100000 did not preclude them from claiming the remaining Tk. 100000 as no consideration had been provided by Muktadir for X- treme’s promise that the account had been settled and, even in the absence of consideration, Muktadir could not raise an estoppel to prevent X-treme from going back on this promise, on the basis that estoppel does not apply to one-
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off debts. (It was not argued in either instance that X- treme’s promise was procured under duress.)
JUDGEMENT OF THE DISTRICT COURT
The District Court found that Muktadir was not liable for the Tk. 100000 balance because:
1. X-treme was bound by its original promise to give the 50% discount because there was consideration for the promise, albeit a promise to reduce the price, stemming from the principle in Williams v Roffey.
2. Even if X-treme's original promise of a discount had not been binding, X-treme would be estopped by the later promise to accept Tk. 100000 in full settlement of the balance as the promise had been made with the intention that it be acted upon and Muktadir had relied on this. Furthermore, given that duress had not been argued in either instance, it would appear that Muktadir had come to equity with
‘clean hands’. APPEAL X-treme appeals to the High Court Division of the Supreme Court against both of these findings.
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STATEMENT OF ISSUES
THE APPELLANTS RESPECTFULLY ASKS THE HON’BLE HIGH COURT DIVISION OF THE SUPREME COURT OF BANGLADESH, THE FOLLOWING QUESTIONS:
ISSUE –– I WHETHER X-TREME WAS BOUND BY ITS ORIGINAL PROMISE TO GIVE THE 50% DISCOUNT ?
ISSUE –– 2 WHETHER X-TREME WOULD BE ESTOPPED BY THE LATER PROMISE TO ACCEPT TK.100000 IN FULL SETTLEMENT OF THE BALANCE ?
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SUMMARY OF ARGUMENTS
X-TREME WAS NOT BOUND BY ITS ORIGINAL PROMISE TO GIVE 50%DISCOUNT It is humbly submitted that there was no consideration for the promise that X-treme would give 50% discount as a lesser sum of money cannot be consideration for a greater sum owed. So,payment of less than is due on or after the date for payment will never provide consideration for a promise to forgo the balance. Further, the principle in Williams v. Roffey is not applicable here as X-tereme did not get any benefit which can consitute a consideration for the promise. X-TREME WOULD NOT BE ESTOPPED BY THE LATER PROMISE TO ACCEPT TK.100000 IN FULL SETTLEMENT OF THE BALANCE It is humbly submitted that Mr.Muktadir offered to pay a smaller amount of the total (discount of 50%),otherwise the X-tereme Ltd. would get nothing as he infers that due to his unemployment he may have to cancel. Hence,X-treme accepts the cheque of that discount amount. Here promise was not freely given and so the
settlement must be set aside. Further this is the reason which make it “inequitable” for Muktadir to rely on promissory estoppel.
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ARGUMENTS ADVANCED I.WHETHER X-TREME WAS BOUND BY ITS ORIGINAL PROMISE TO GIVE THE 50% DISCOUNT ? A. That there was no consideration for the promise 1. It is humbly submitted that section 2 (d) of the Contract Act,1872 provides for consideration which states that:
“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 for the promise.” Here “something” means anything which has any value in the eye of law. It implies that consideration need not be adequate, because it is mentioned in the law that consideration must be suffic ient rather “something” which requires the existence of consideration in any form. 2. There was no consideration for the promise that X-treme would give the 50% discount as a lesser sum of money cannot be consideration for a greater sum owed which was held i n pinnel’s case (1602). But payment of less than is due on or after
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the date for payment will never provide consideration for a promise to forgo the balance. B. That the principle in Williams V. Roffey is not applicable here 3. The District court cited Williams V. Roffey(1991). Draw a distinction that one of the defining facts of that case was the time pressure. The benefit that made up the consideration was not that the carpentry work was done at all, but that it was to be done quickly due to the penalty clause in their building contract. X-treme is under no such pressure ( as Muktadir did not cancel the holiday ). The same consideration does not exist. 4. Again, in Williams V. Roffey the claimant accepted a new obligation to comlete the flats one by one and by that the defendant obtained a benefit that he did not to
pay under “penalty clause”. X-treme did not get any benefit which can constitute a consideration for the promise.
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II. WHETHER X-TREME WOULD BE ESTOPPED BY THE LATER PROMISE TO ACCEPT TK.100000 IN FULL SETTLEMENT OF THE BALANCE? A. That there was no binding settlement 5. This case reads much, much more like D&C Builders v Rees( 1996 ). In that case, the debtor similarly offered to pay a smaller amount of the total, otherwise the creditor would get nothing. Creditor accepts a cheque, and later demands settlement in full. In this case, it was held (by Denning MR - the architect of the doctrine) that Promisee could not operate as the promise was not freely given, hence it was not inequitable to go back on it. In the current case, Muktadir demands discount, and infers that due to his unemployment he may have to cancel.
Like the Rees family, he does not advertise his dissatisfaction immediately. Not until his discovery that a friend has paid less for a similar holiday.
At this point, he calls X-treme Ltd. and demands a discount of 50% , using as leverage his own altered financial status - (clearly not so onerous that he would
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instead ask for his money back, and cancellation). X-treme Ltd. agrees, despite having been given no consideration. Very much like the Rees.
Following enjoyment of the holiday, when presented with a statement for the full sum, the respondent issues a cheque - much like the Rees.
Having considered Hughes and High Trees, all three judges at the Court of Appeal in D & C Builders v Rees held that there was no binding settlement, and that Promisee could not operate under those circumstances, which are directly analogous to X-treme. 6. The explanation II to section 25of the Contract Act,1872 provides that-
“An agreement to which the consent of the promisor is freely given is not void merely because the consideration is inadequate; but the inadequacy of the consideration may be taken into account by the Court in determining the question whether the consent of the promisor was freely given.” So, the explanation makes it clear that if consent is given freely then the agreementwill not be void merely because the consideration is inadequate. But
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the court may take into account the amount of consideration to determine the question whether the consent of the promisor was freely given or not. In the current case, Mr. Muktadir similarly offered to pay a smaller amount of the total (discount of 50%),otherwise the X-tereme Ltd. would get nothing as he infers that due to his unemployment he may have to cancel. Hence,X-treme accepts the cheque of that discount amount. Here promise was not freely given. In an English case, Williams V. Bailey (1866) it was held that at the time of making the settlement the claimant was not able to make a freely voluntary assent, and the settlement must be set aside. B. That it was not inequitable to allow X-treme to withdraw the promise 7. The doctrine of promissory estoppel, however, provides that in certain circumstances a promise may be binding even though it is not supported by
consideration. The doctrine has its origins in equitable “waiver”. It is thus regarded as an “equitable” doctrine. 8. The way that this is usually stated is that it must be inequitable for the
promisor to withdraw the promise. What does “inequitable” mean ? It will cover the situations where the promisee has extracted the promise by taking advantage of the promisor.
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9. This was the the case, for example, in D & C Builders V. Rees (1966) where the promise of a firm of builders to accept part payment as fully discharging a debt owed for work done was held not to give rise to a promissory estoppel, because the debtor had taken advantage of the fact that she knew that the builders were desperate for cash.
In the current case, Muktadir did not come to equity with “clean hands” as he indued area manager by offering to pay a smaller amount of the total ( discount amount ), otherwise they would get nothing as he infers that due to his unemployment he may have to cancel.
This make it “inequitable” for Muktadir to rely on promissory estoppel.
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PRAYER
WHEREFORE IN THE LIGHT OF THE ISSUES RAISED, ARGUMENT ADVANCED, REASONS GIVEN AND AUTHORITIES CITED, THIS HON’BLE COURT MAY BE PLEASED TO:
TO HOLD
THAT X-TREME WAS NOT BOUND BY ITS ORIGINAL PROMISE TO GIVE 50%DISCOUNT
THAT X-TREME WOULD NOT BE ESTOPPED BY THE LATER PROMISE TO ACCEPT TK.100000 IN FULL SETTLEMENT OF THE BALANCE
MUKTADIR WAS LIABLE FOR THE TK.100000 BALANCE
TO SET ASIDE
THE ORDER PASSED BY THE DISRICT COURT
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MISCELLANEOUS
AND ANY OTHER RELIEF THAT THIS HON’BLE COURT MAY BE P LEASED TO GRANT IN THE INTERESTS OF JUSTICE, EQUITY AND GOOD CONSCIENCE
ALL OF WHICH IS RESPECTFULLY SUBMITTED .
COUNSELS FOR THE APPELLANTS
WRITTEN SUBMISSION ON BEHALF OF THE APPELLANT
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