NATIONAL LAW INSTITUTE UNIVERSITY,

BHOPAL

LAW OF CONTRACTS- II
LALMAN SHUKLA v. GAURIDUTT
SUBMITTED TO: MISS. SHRUTIKA SHRIVASTAVA

SUBMITTED BY: AASHNA S. CHOUKIKAR

SECTION B
2013BALLB91

CONTENTS
1. Introduction3

2. Facts of the case..3-4

3. Issues involved..4
4. Arguments from the side of the plaintiff.4-5

5. Arguments form the side of the defendant.5

6. Judgement of the case6

7. Critical views.7

8. Bibliography.8

INTRODUCTION
2

This case Lalman Shukla vs. Gauri Dutt is a popular case related to
the Acceptance of a Contract. Lalman Shukla is an employee with Pt. Gauri
Dutt.

In this case, it was held that an action without the knowledge of the offer is no
acceptance.

FACTS
When the nephew of Pt. Gauri Dutt was found missing in somewhere around
January, the servants of the defendant were sent in his search in all directions.
The plaintiff was one of them. He was the Munim of defendants firm. He was
ordered to go to Haridwar in the search of the lost nephew and he was given
money for his railway expenses. After this, the defendant issued hand-bills
offering a reward of 501 to anyone who might find out the boy. The plaintiff
found the boy somewhere near Hrishisikesh. He dthen brought back the boy to
Cawnpore and handed him over to the defendant. The defendant gave the
plaintiff a reward of two sovereigns and afterwards also gave him 20 rupees
more. The plaintiff didnt ask for anything more and continued to serve the
defendant for 6 months, when he was dismissed. He then brought a suit, out of
which this application arises., claiming Rs. 499out of the amount of the reward
offered by the defendant under the hand-bills issued by him. He alleged in his
plaint that the defendant had promised to pay him the amount of the reward in
addition to the other gifts and the travelling expenses when he was sent to
Haridwar. The court found this allegation to be untrue and the record shows that
the hand-bills were issued subsequently to the plaintiffs departure to Haridwar.
It appears, however, that some of the defendants hand-bills were sent to him
there.
3

The court having dismissed the claim, this application for revision has been
made by the plaintiff and it is claimed on his behalf that, as he traced out the
boy, he is entitled to the reward offered by the defendant.

ISSUES INVOLVED
4

There are three main issues involved in this case.

They are as follows:
1. Whether the reward constitutes as a general offer
2. Whether performance of the condition constitutes an acceptance
3. Whether is it necessary for a person to be aware of the condition in order
to claim for the reward.

ARGUMENTS FROM THE PLAINTIFFS

SIDE
1. A privity of contract was unnecessary and that neither motive nor
knowledge was essential.
The learned counsel for the plaintiff relies upon the case of Williams v.
Carwardine [(1833) 4 B and A 621] and Gibbons v. Proctor [(1891) 64 L.
T. 594] These cases no doubt support the contention of the learned
counsel and the result of them seems to be that the mere performance of
the act is sufficient to entitle the person performing the act to obtain the
reward advertised for it. However, these cases face the criticism of Sir
Frederick Pollock in Law Of Contracts, 8th Edition, pp 15 and 22 and by
the American author Ashley in his Law Of Contracts, pp 16, 23 and 24.

ARGUMENTS GIVEN BY THE

DEFENDANT
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1. The learned counsel for the defendant propounded that in order to

constitute a contract, there must be acceptance of offer and there can be
no acceptance without the knowledge of the offer. Motive is not essential
but knowledge and intention are.
(Section 8 of the Contract Act)

2. So, the counsel for the defendant argued that as the plaintiff had no
knowledge about the reward announced for the person who finds out the
defendants lost nephew, the plaintiff cannot claim for the reward. He did
not provide the acceptance which would enable him to claim the reward.
If he had the knowledge about the reward, then only he would be in the
position to claim it.

JUDGEMENT
The learned Judge for this case, Justice Banerji held that:
A suit like the present can only be founded on a contract. There must be
acceptance of an offer and there should be knowledge about the offer;
then only it becomes a contract.
In the case of the public advertisement offering a reward, the performance
of the act raises an inference of the acceptance. Section 8 of the Contracts
Act says, Performance of the conditions of a proposal is an acceptance
of the proposal.
As observed by Ashley in his work on contracts already referred to, If
there is intent to accept, the contract arises upon the performance of the
requested service during the continuance of the offer and the offeree is
then entitled to the promised reward. (p. 23) Where, therefore, an
advertisement offering a reward for the performance of a particular act is
published, and the act is performed, there is a complete contract and the
claim for the reward arises on the basis of the contract.
In the present case, however, the claim cannot be regarded as one on the
basis of a contract. The plaintiff was in the service of the defendant. As
such the servant he sent to search for his lost nephew. It was therefore, his
duty to search for the boy. It was true that it is not within the scope of his
duties being a Munim to search for a missing relative of his master, but
when he agreed to go to Haridwar, in search of the boy, he undertook that
particular duty and he was under obligation to search for and trace the
boy. Being under that obligation, which he had incurred before the reward
in question was offered, he cannot in my opinion, claim the reward. There
was already a subsisting obligation and, therefore, the performance of the
act cannot be regarded as a consideration for the defendants promise. For
the above reasons, I hold that the decision of the court below is right and I
dismiss this application with costs.

CRITICAL VIEWS
7

According to me, the decision in this regard is absolutely right. The

defendant had no knowledge at all about the reward for searching the boy.
When he set out to look for him, he didnt know about the reward. He
searched for him as he was directed to do so by his employer.
Knowledge is an essential element to claim for the reward. As he didnt
have that, he is in no position to claim for it. If he had the information of
this earlier then only he would have been able to claim for th reward. As
he didnt, he cannot.
Hence, we can say that, Knowledge of the offer is essential and then
only acceptance has a stand. An action without the knowledge is no
acceptance.

BIBLIOGRAPHY

1.
2.
3.
4.

www.manupatra.com
www.indiankanoon.com
Avtar Singh on Law Of Contracts
Ashleys Law Of Contracts