LITIGIOSUS (FRESHER’S MOOT COURT COMPETITION) 2019

BEFORE

THE CIVIL COURT

AT RANCHI, JHARKHAND

PETITION NO: ________/2019

(UNDER SECTION 9 & 20 OF THE CIVIL PROCEDURE CODE,1908)

IN THE MATTER OF

LEELA
SHETH………………………………………………………………..PLAINTIFF

VS.

CENTRAL PERK …………………………….

……………………………...DEFENDANT

MEMORIAL ON BEHALF OF THE DEFENDANT

Memorial on behalf of the Defendant

I
Y

TABLE OF CONTENTS

TABLE OF CONTENTS.....................................................................................................II

LIST OF ABBREVIATIONS..............................................................................................III

INDEX OF AUTHORITIES................................................................................................IV

 LIST OF STATUTES.............................................................................................IV

 LIST OF BOOKS..................................................................................................IV

 LIST OF CASES...................................................................................................IV

 LIST OF WEBSITES.............................................................................................IV

STATEMENT OF JURISDICTION........................................................................................5

STATEMENT OF FACTS....................................................................................................6

STATEMENT OF ISSUES...................................................................................................8

SUMMARY OF ARGUMENTS............................................................................................9

ARGUMENT ADVANCED................................................................................................10

ISSUE 1. THAT THE AGREEMENT DATED 22ND JULY, 2019 IS LEGALLY VALID AND

ENFORCEABLE...........................................................................................................10

1.1 FRAUD OR MISREPRESENTATION WAS NOT PRACTICED ON MS. LEELA

SHETH AS SHE HAD ALL THE MEANS TO CHECK ALL THE TERMS OF THE

CONTRACT.............................................................................................................11

1.2 CONTRACTS CAUSED BY UNILATERAL MISTAKES ARE NOT VOID...................12

ISSUE 2. THAT CENTRAL PERK CAN SEEK COMPENSATION FROM MS. LEELA SHETH
FOR NON-PERFORMANCE OF HER PROMISE...............................................................13

Memorial on behalf of the Defendant

II
 2.1 DAMAGE WAS SUFFERED BY CENTRAL PERK BECAUSE OF NON-

PERFORMANCE OF MS. LEELA SHETH OBLIGATION ..............................................13

PRAYER.......................................................................................................................XV

LIST OF ABBREVIATIONS

& AND
HON’BLE HONOURABLE
VS. VERSUS
AIR ALL INDIA REPORTER
SC SUPREME COURT
CAL CALCUTTA
ICA INDIAN CONTRACT ACT
ORS. OTHERS
ANR. ANOTHER
CO. COMPANY
LTD. LIMITED
IT INFORMATION TECHNOLOGY
CORP. CORPORATION

Memorial on behalf of the Defendant

III
 INDEX OF AUTHORITIES

 LIST OF STATUTES
THE CODE OF CIVIL PROCEDURE, 1908

THE INDIAN CONTRACT ACT, 1872

 LIST OF BOOKS
POLLOCK & MULLA, I THE CONTRACT ACT (LEXIS NEXUS, 14TH EDITION, 2013)

AVTAR SINGH, CONTRACT AND SPECIFIC RELIEF (EBC, 12TH EDITION, 2017)

 LIST OF CASES
Bisset v Wilkinson [1927] AC 177 Privy Council

Frigaliment Importing Co. v. B.N.S. International Sales Corp. 190 F. Supp. 116
(S.D.N.Y. 1960)

Hotmail Corporation v. Van$ Money Pie Inc., 47 U.S.P.Q. 2d 1020, 1998 WL

388389 (April 1998, N.D.Cal.)

Robinson v Harman (1848) 1 Ex 850

 LIST OF WEBSITES
WWW.SCCONLINE.COM

WWW.MANUPATRA.COM

Memorial on behalf of the Defendant

IV
 STATEMENT OF JURISDICTION

The counsel on behalf of the Defendant contends in response to the petition filed
before the Civil Court at Ranchi, Jharkhand. The petition invokes its jurisdiction
under Section 91 and 202 of the Civil Procedure Code, 1908.

1
The Courts shall (subject to the provisions herein contained) have jurisdiction to try all suits of a civil
nature excepting suits of which their cognizance is either expressly or impliedly barred
2
Other suits to be instituted where defendants reside or cause of action arises -Subject to the limitations
aforesaid, every suit shall be instituted in a Court within the local limits of whose jurisdiction -
(a) the defendant, or each of the defendants where there are more than one, at the time of the
commencement of the suit, actually and voluntarily resides, or carries on business, or personally
works for gain; or
(b) any of the defendants, where there are more than one, at the time of the commencement of the
suit, actually and voluntarily resides, or carries on business, or personally works for gain,
provided that in such case either the leave of the Court is given, or the defendants who do not
reside, or carry on business, or personally work for gain, as aforesaid, acquiesce in such
institution; or
(c) the cause of action, wholly or in part, arises.
 STATEMENT OF FACTS

With the advent of technology, the food sector of India has developed a lot.
Restaurants have now begun using E-contracts to pay for food and to carry out
different services. This has proven to be beneficial to them. One of those such
restaurants is Central Perk. It opened its first outlet in Ranchi and has expanded to
over 20 restaurants across India ever since. Apart from fusion food and excellent
service, the restaurant has live performances by various artists across like dancing,
singing etc. From 22.06.2019 the restaurant started recruiting artists online, replacing
their previous interview method which became troublesome and old, as restaurant
grew.

In this new method the interested artists would have to fill the agreement online
present under the Contract Tab of the restaurant’s website. The agreement form asked
for Personal Details, Prior experience, and Salary of the person. The personal details
column included Registered Paytm Number besides Name, Sex, Age, Address and
Email-ID. To proceed further the artist would have to state a few particular conditions
from the drop-down menu in the experience column. And for receiving salary, they
were required to link their Paytm to the website server of Central Perk.

The agreement form ended with an I agree checkbox button with a Clause 32 which
read: Kindly click on I agree to enter into a contract with us. This would imply that
you have given consent to each and every term of this Contract. There was also an
asterisk mark beside the Paytm Number Clause which was mentioned below the I
agree button at the end of agreement in fine print which stated: Notwithstanding
anything an employee absent for performing without a minimum two days’ notice
intimidating the relevant authority about the reasons for the same would become
liable to pay reasonable compensation to the employer. The amount would be
deducted from the Paytm wallet of the employee. Besides this, the Legal tab had
exhaustive information about the agreement.

On 22.07.2019 an aspiring singer Ms. Leela Sheth, who wanted to work for Ranchi
Branch of Central Perk, entered into the online agreement on their website by clicking
on I agree button. Her performances were scheduled on 28.07.19 and 01.08.19. On
Memorial on behalf of the Defendant
6
the night of 28.07.19 after giving her first performance, while returning home she met
with an accident and fractured her right leg with a few other bruises. The hospital
discharged her on 30.07.19. On 01.08.19 she called to notify the manager that she
won’t be able to perform due to her condition but the call was unanswered. And on
the same night Rs. 6000/- was deducted from her Paytm wallet and paid to Central
Perk. She called up the manager to inquire about the same who told her about the two
days’ notice before taking a leave. She stated that she had no knowledge of this and
had only linked her Paytm to receive salary.

Afterwards Ms. Leela filed a suit against Central Perk demanding refund of the
amount deducted from her Paytm account.

Memorial on behalf of the Defendant

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 STATEMENT OF ISSUES

ISSUE – 1: WHETHER THE AGREEMENT DATED 22ND JULY, 2019 WAS VALID?

ISSUE – 2: WHETHER THE EMPLOYER CAN SEEK COMPENSATION FOR NO

APPEARANCE?

Memorial on behalf of the Defendant

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 SUMMARY OF ARGUMENTS

ISSUE – 1: WHETHER THE AGREEMENT DATED 22ND JULY, 2019 WAS VALID?

The counsel on behalf of the defendant contends that the agreement dated 22 nd July,
2019, herein referred to as online agreement, is legally valid and enforceable as it was
signed with free consent of Ms. Leela Sheth and all the essentials in section 10 of
ICA, 1872 were fulfilled.

ISSUE – 2: WHETHER THE EMPLOYER CAN SEEK COMPENSATION FOR NO

APPEARANCE?

It is further submitted that Ms. Leela Sheth is liable to pay compensation to Central
Perk for non-fulfilment of her promise pursuant to section 73 and 74 of the ICA,
1872. As she did not perform on the night 1st August, 2018, loss was suffered by
Central Perk and there was no valid two days’ prior notice for non-performance.

Memorial on behalf of the Defendant

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 ARGUMENT ADVANCED

ISSUE 1. THAT THE AGREEMENT DATED 22ND JULY, 2019 IS LEGALLY VALID AND

ENFORCEABLE.

Section 10 of the Indian Contract Act, 1872 states that, ‘All agreements are contracts
if they are made by the free consent of the parties competent to contract, for a lawful
consideration and with a lawful object, and are not hereby expressly declared to be
void.’

From the Sections 10, 133 & 144 of the Indian Contract Act, 1872, it can be concluded
that in order to constitute a contract, both the parties must freely consent to the
agreement which should not be caused by coercion, undue influence, fraud,
misrepresentation, or mistake.

Under the provisions of the Information Technology Act, 2000 particularly Section
10-A5, an electronic contract is valid and enforceable. The only essential requirement
to validate an electronic contract is compliance with the necessary pre-requisites
provided under the Indian Contract Act, 1872. Also, the courts in India give due
regard to electronic contracts under the provisions of the Indian Evidence Act, 1872.

Click-Wrap agreements are e-contracts. They are executed between the parties when
one of them agrees to the terms and conditions specified by the websites by clicking
“I agree” to it or writing their consent in the dialogue box provided. It has pre-
determined terms and conditions where the party like in traditional contract does not
have bargaining power; they could either accept or reject it wholly. In other words,
express consent of the party is required for constituting any contract like after

3
“Consent” defined.—Two or more persons are said to consent when they agree upon the same thing
in the same sense.
4
“Free consent” defined.—Consent is said to be free when it is not caused by— (1) coercion, as
defined in section 15, or (2) undue influence, as defined in section 16, or (3) fraud, as defined in section
17, or (4) misrepresentation, as defined in section 18, or (5) mistake, subject to the provisions of
sections 20, 21 and 22. Consent is said to be so caused when it would not have been given but for the
existence of such coercion, undue influence, fraud, misrepresentation or mistake.
5
Validity of contracts formed through electronic means. -Where in a contract formation, the
communication of proposals, the acceptance of proposals, the revocation of proposals and acceptances,
as the case may be, are expressed in electronic form or by means of an electronic record, such contract
shall not be deemed to be unenforceable solely on the ground that such electronic form or means was
used for that purpose.
Memorial on behalf of the Defendant
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downloading any game or software we are required to expressly accept the terms and
conditions, denial of it will also deny us the access to that particular game or software.

The validity of click wrap agreement was first considered when the Court for northern
district of California upheld that “the defendant is bound by the terms of the license as
he clicked on the box containing “I agree” thereby indicating his assent to be bound”6

Hence, the counsel on behalf of defendant most humbly submits that the online
agreement is a click wrap agreement and is valid and enforceable, since it fulfills all
the essentials of section 10 of ICA, 1872 and under 10A of IT Act, 2000 online
contracts come within the purview of ICA.

1.1 FRAUD OR MISREPRESENTATION WAS NOT PRACTICED ON MS. LEELA SHETH

AS SHE HAD ALL THE MEANS TO CHECK ALL THE TERMS OF THE CONTRACT

The exception of Section 197 of the ICA, 1872 states that:

If such consent was caused by misrepresentation or by silence, fraudulent within the

meaning of section 17, the contract, nevertheless, is not voidable, if the party whose
consent was so caused had the means of discovering the truth with ordinary
diligence.

The illustration (b) in section 19 of ICA, 1872 reads:

A, by a misrepresentation, leads B erroneously to believe that, five hundred maunds

of indigo are made annually at A’s factory. B examines the accounts of the factory,
which show that only four hundred maunds of indigo have been made. After this B
buys the factory. The contract is not voidable on account of A’s misrepresentation.

In the case of Bisset v Wilkinson8, it was held that mere statement of opinion would
not amount to misrepresentation, and if the person has the means necessary to
discover all the terms of the agreement; the agreement will not be void.

Thus, it is submitted that the online agreement had Clause 32 with the “I agree”
button stating that:

6
Hotmail Corporation v. Van$ Money Pie Inc., 47 U.S.P.Q. 2d 1020, 1998 WL 388389 (April 1998,
N.D.Cal.)
7
When consent to an agreement is caused by coercion, fraud or misrepresentation, the agreement is a
contract voidable at the option of the party whose consent was so caused.
8
[1927] AC 177 Privy Council
Memorial on behalf of the Defendant
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Kindly click on I agree button to enter into a contract with us. This would imply that
you have given consent to each and every term of this Contract.

Also, below the I agree in fine print it was given that:

Notwithstanding anything an employee absent for performing without a minimum two

days’ notice intimidating the relevant authority about the reasons for the same would
become liable to pay reasonable compensation to the employer. The amount would be
deducted from the Paytm wallet of the employee.

In addition to these two clauses, the legal tab of the website had all the necessary
information about the agreement which the plaintiff could have easily accessed and
read.

Hence, the online contract is not void as Ms. Leela Sheth had all the necessary means
to check all the terms of the agreement as it was given in fine print near the I agree
button.

1.2 CONTRACTS CAUSED BY UNILATERAL MISTAKES ARE NOT VOID

A contract is not voidable merely because it was caused by one of the parties to it
being under a mistake as to a matter of fact.9

For example, in a contract for the sale of screws, one party may incorrectly believe
that the word “screw” refers to Phillips-head screws, when in fact the term refers to
standard-type screws. If only one party holds this mistaken belief, but the other is
clear on the meaning of “screw”, then this could be called a unilateral mistake.

In the case of Frigaliment Importing Co. v. B.N.S. International Sales Corp. 10, the
defendant contracted to sell chicken to the plaintiff. The plaintiffs were under the
mistake that chicken meant only younger chicken. And sued the defendants when
older stewing chickens were supplied to them. It was held in this case that the word
“chicken” did not only mean young chicken and could be interpreted in many
different ways. Hence, the plaintiff did not succeed in their claim as unilateral mistake
doesn’t make the contract void.

9
The Indian Contract Act, 1872 (Act 9 of 1872), s. 22
10
190 F. Supp. 116 (S.D.N.Y. 1960)
Memorial on behalf of the Defendant
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Thus, it is submitted that Ms. Leela Sheth was under the mistake of fact but it doesn’t
make the contract void as given in section 22 of ICA, 1872. Hence, as the contract is
valid, Central Perk is entitled to deduct Rs. 6000/- from her Paytm account, as she did
not perform and violated the contract.

ISSUE 2. THAT CENTRAL PERK CAN SEEK COMPENSATION FROM MS. LEELA
SHETH FOR NON-PERFORMANCE OF HER PROMISE.
Remedy for breach of an online contract is same as the provisions provided in the
ICA, 1872.

Sec 73 and Sec 74 of the Indian Contract Act, 1872 deals with the rules regarding the
remedy of damages on breach of contract. The person whose rights are infringed by
the breach of contract may bring an action for damages or compensation in terms of
monetary value for the loss suffered by the party. 

Section 74 of the ICA, 1872 states that:

When a contract has been broken, if a sum is named in the contract as the amount to
be paid in case of such breach, or if the contract contains any other stipulation by
way of penalty, the party complaining of the breach is entitled, whether or not actual
damage or loss is proved to have been caused thereby, to receive from the party who
has broken the contract reasonable compensation not exceeding the amount so
named or, as the case may be, the penalty stipulated for.

It is submitted that the online agreement clearly stated that in case of non-
performance of the act, Rs. 6000 will be deducted from the account of the employee.
Hence, Ms. Leela Sheth did not perform on the night of 1 st August, 2019 nor did she
give a two days’ prior notice to the relevant authority that she will not be performing.
Thus, Central Perk is entitled to deducted Rs. 6000 from her Paytm Account as stated
in the online agreement.

2.1 DAMAGE WAS SUFFERED BY CENTRAL PERK BECAUSE OF NON-PERFORMANCE

OF MS. LEELA SHETH OBLIGATION

Section 73 of the ICA, 1872 states that:

When a contract has been broken, the party who suffers by such breach is entitled to
receive, from the party who has broken the contract, compensation for any loss or
Memorial on behalf of the Defendant
13
damage caused to him thereby, which naturally arose in the usual course of things
from such breach, or which the parties knew, when they made the contract, to be
likely to result from the breach of it.

In the case of Robinson v Harman11, Harman offered Robinson a lease for a house.
Later it was found that Robinson was only entitled to a portion of that property.
Robinson brought an action for damages. It was held that Robinson was liable to
recover damages for his expenses in preparation of the lease and for the loss of the
bargain.

Thus, by non-performance of the promise by Ms. Leela Sheth there was damage to
Central Perk as it harmed the reputation of the restaurant since it is famous for the live
performances of artists. Customers on that day did not appreciate coming to the
restaurant as they were expecting to a live performance, hence there was a loss of
customers.

Hence, it is submitted that Central Perk suffered damage because Ms. Leela Sheth
failed to perform her obligation and Central Perk is entitled to receive compensation
from the plaintiff.

11
(1848) 1 Ex 850

Memorial on behalf of the Defendant

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 PRAYER

Wherefore in the lights of facts stated, issues raised, arguments advanced and
authorities cited, it is most humbly prayed and implored before the Civil Court of
Ranchi, that it may be graciously pleased to adjudge and declare:

1. That the online agreement is legally valid and enforceable.

2. That the defendant is liable to get compensated from the plaintiff for non-
performance of her promise.

And pass any other order in favour of the Defendant which may deem fit in the
ends of justice, equity and good conscience.

For this act of kindness, the Defendant shall duty bound forever pay.

PLACE: Ranchi Respectfully

Submitted,
DATE: Counsel for
Defendant

Memorial on behalf of the Defendant

XVI