Bhagwandas Govardhana’s Kedia v Girdharilal Purshottam Das
Case: Bhagwandas Govardhana’s Kedia v. Girdharilal Purshottam Das (1966 AIR 543, 1966 SCR (1) 656)
Facts of the Case
The plaintiff, Bhagwandas Govardhana’s Kedia, entered into a contract with the defendant, Girdharilal Purshottam Das, for the sale of certain goods.
The plaintiff claimed that the defendant had accepted the goods but failed to pay the agreed price.
The defendant argued that the contract was conditional and that certain terms were not fulfilled, so no binding contract arose.
The primary legal issue was about acceptance of goods, offer and acceptance, and when a contract is considered complete and enforceable.
Key Legal Issues
What constitutes acceptance of an offer?
When does a binding contract arise?
Is silence or inaction enough to constitute acceptance?
What is the legal effect of partial acceptance or conditional acceptance?
Legal Principles Established
1. Offer and Acceptance
A contract requires a valid offer and a valid acceptance.
Acceptance must be absolute and unqualified.
If acceptance is conditional or qualified, it is considered a counter-offer, not acceptance.
2. Acceptance by Conduct
Acceptance can be either express (by words or writing) or implied by conduct.
Conduct indicating acceptance of goods or terms is sufficient to create a contract.
3. Silence as Acceptance
Silence or inaction generally does not amount to acceptance, unless there is a previous course of dealing or special circumstances indicating that silence will be treated as acceptance.
4. Performance of Conditions
If an offer is conditional, acceptance of the condition or performance of the condition must occur for the contract to be binding.
Failure to meet essential conditions means no contract.
Court’s Analysis
The court examined the correspondence and actions between parties.
It found that the defendant had accepted the goods by retaining and using them, which amounted to acceptance by conduct.
The defendant’s failure to pay the agreed price constituted breach.
The court held that a valid and enforceable contract existed from the time of acceptance.
Mere claims of conditions not fulfilled were rejected if the defendant had otherwise accepted the goods unequivocally.
Important Case Law Principles Referenced
Carlill v. Carbolic Smoke Ball Co. (1893) 1 QB 256: Acceptance can be by conduct.
Felthouse v. Bindley (1862) 11 CB NS 869: Silence is not acceptance.
Harvey v. Facey (1893) AC 552: Mere supply of information is not offer or acceptance.
Chinnock v. Maslen (1894) 2 QB 154: Acceptance must be absolute and unqualified.
Significance of the Case
This case reaffirmed the principles of offer and acceptance, especially acceptance by conduct.
It clarified that retaining goods with knowledge of the offer and without objection can amount to acceptance.
The ruling emphasized that a contract becomes enforceable when offer and acceptance meet unequivocally, even if no formal written acceptance exists.
It also reinforced that conditions attached to an offer must be complied with, or the contract is not complete.
Summary
| Aspect | Holding / Principle |
|---|---|
| Offer | A proposal made with intention to be bound when accepted |
| Acceptance | Must be absolute and unqualified; can be by conduct |
| Silence | Generally no acceptance unless prior dealings or special circumstances |
| Conditional Offers | Contract forms only if condition is fulfilled |
| Breach | Retaining goods and not paying is breach if acceptance is established |
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