A promised B to subscribe a sum of money for the construction of ‘Town Hall’. Can B compel A to perform his promise? Decide with the help of a decided case.

Question: A promised B to subscribe a sum of money for the construction of ‘Town Hall’. Can B compel A to perform his promise? Decide with the help of a decided case. [BJS 2014]

Find the answer to the mains question of the Law of Contract only on Legal Bites. [A promised B to subscribe a sum of money for the construction of ‘Town Hall’. Can B compel A to perform his promise? Decide with the help of a decided case.]

Answer

In the case of Kedarnath Bhattacharji v. Gorie Mahommed Citation, (1887) ILR 14 Cal 64, the facts were similar as given in the present case. In this case, A Town Hall was planned to be constructed in Howrah. The plaintiff was a Municipal Commissioner of Howrah and one of the trustees of the Howrah Town Hall Fund. It was decided to build a Town Hall in Howrah, provided the necessary funds could be got together for the purpose.

Later on, when the subscription list increased, the plans also increased. Earlier the original cost of construction was intended to be Rs. 26,000, but later it increased to Rs. 40,000. As the subscription list increased, the Commissioners and other members, including the plaintiff who was also Vice-Chairman of the Municipality, entered into a contract with a contractor to build the Town Hall.

The defendant agreed to subscribe in his name in the book for Rs. 100 for the construction of Town Hall at Howrah. After collecting all the subscriptions, funds and interested parties came up for the construction of the Town Hall. Then the plaintiff agreed with the most suitable contractor and supplied the necessary information about the plans.

However, later he refused to pay the amount. Then the Plaintiff decided to commence an action to claim the unpaid subscription amount from the defendant. The High Court was of the opinion a trustee or a Municipal Commissioner under the provisions of the Code of Civil Procedure, 1908 is entitled to bring an action on behalf of himself and others who are interested in him.

The Court held that if the defendant did not benefit directly from the promise he made for a charitable purpose, he is liable to pay the subscription amount. Also, there was no consideration involved. In this particular case, the persons were asked to subscribe, the purpose for which the money was to be used and there was an obligation on the part to pay money to the contactor which was engaged.

When the subscriber himself puts his name on the subscription list – he undertakes to give money for that particular purpose. This is a valid contract. Thus he was held responsible for his promise. A promise once made cannot be taken back after work has been commencement. The rule of law states that “Any act done at the will of the promisor’s wish is taken as the fulfilment of consideration of a contract.”

The legal principle that was involved in the present case was ‘Consideration’ means “something in return”, i.e. quid pro quo which is an essential element to find out the true intention of the parties to create a legal relationship. Consideration is an essential component of a valid contract.

Section 2(d) of the Indian Contract Act defines

“when at the desire of the promisor, 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.”

Consideration is the price of the contract. An agreement without consideration is void and is not enforceable by law except under certain circumstances. An agreement without consideration is a bare promise and cannot be held to be binding on the parties.