Powell V. Lee (1908) 99 LT 284

 

Powell v. Lee (1908) 99 LT 284

AUTHOR- FARJANA AKTER
COURSE- LLB
LOVELY PROFESSIONAL UNIVERSITY, PUNJAB

CASE DETAILS

  • Court: King's Bench Division

  • Case Number: 284

  • Plaintiff: Mr. Powell

  • Defendant: Mr. Lee

  • Citation: (1908) 99 LT 284

INTRODUCTION

According to section 2 (h) of the Indian Contract Act of 1872, a contract is an agreed proposition (agreement) that is completely understood by the law, is legally defined, or is enforceable by the law. The commitment could be to carry out or abstain from a certain action. A contract must be made by two or more parties who must agree to it. One of the parties typically makes an offer who is known as an offeror or promisor and the other accepts it who is known as offree or promisee. The opposite party is entitled to legal action if one of the parties breaks their pledge. A contract can only be ratified if both parties have accepted the offer.
According to Section 10 of the Act, acceptance and communication by both parties are necessary conditions for a contract to be enforceable. For exceptions, an offer shouldn't have any conditions attached and the acceptance must be unconditional and unqualified. If an offer is made to a specific group, that group should be the only ones to accept it; if any other individuals take it, it has no meaning. According to section 2(b) of the act, the entire proposal is accepted and enters into force only after the relevant party has consented to the contract and the fundamental rule is that acceptance must be acknowledged to the offeror in order to benefit the offeror. The judgment of Powell v. Lee case delivered a clear idea about the recognition of  acceptance in contract law.

FACT OF THE CASE

In this case, the plaintiff was identified as Mr. Powell and Mr. Lee was the defendant. Mr. Powell filled out an application to be the headmaster of the school. At that time, his application was forwarded to the managing committee of the school who acted as hiring authority for the new headmaster. Here, Mr. Lee (defendant) worked in the school managing committee and was also a member of the selection committee for the new headmaster. The selection committee chose to hire Mr. Powell as new headmaster after considering his application.These were merely internal discussions at that moment and he had not yet received a formal acceptance from any authority. However, before the appointment decision was communicated to the plaintiff by the authority, one of the board members, acting in his individual role, notified him of the selection committee's decision.When Powell first learned of the appointment as headmaster, he was very excited. But for some issue, the committee later altered its mind and decided to substitute the candidate they had selected. The plaintiff was furious about this and decided to sue the institution for breach of contract.

ISSUE

  • Whether the school was or wasn't accountable for the breach of contract?

  • whether a person communicated the acceptance of an offer while acting in an unauthorized capacity?

LAWS INVOLVED

  • Section 2(a) of the Indian Contract Act, 1872.

  • Section 2(b) of the Indian Contract Act, 1872.

ARGUMENTS
PLAINTIFF’S ARGUMENTS
Plaintiff  said that by breach of a contract to employ, he had suffered damages in loss of salary. So the school hiring authority is liable for this inconvenience. For this reason, he brought an action against the school authority and filed a lawsuit.
DEFENDANT’S ARGUMENTS
Defendants argued that Mr. Powell was never formally informed of the acceptance. For an acceptance to be deemed valid, a communication is required. Additionally, the offeree in his authorized role, or a representative chosen by him, should accept the communication. Powell didn't get any confirmation from the selection committee of the school. As a result, according to the law, he shouldn't be filing a lawsuit for breach of contract. Because he never received any information from authorized members.

RATIO DECIDENDI
According to the court

  • There is no breach of contract between plaintiff and school managing committee.

  • The confirmation of acceptance Powell received was invalid.

  • The above-mentioned committee member who informed Powell about his job was neither qualified nor designated by the committee to transmit the acceptance.

  • There was no legally enforceable agreement between Powell and the school because the acceptance was communicated by a party without the right to do so on behalf of the management board.

OBITER DICTA

  • The headmaster position was only offered as an invitation to offer, and when Mr. Powell applied for it, he essentially indicated his offer to fill the position.

  • If we view this case in the framework of the Indian Contract Act, it was up to the board of directors to decide whether to accept the offer and tell him so, or to reject it, which is exactly what they did. 

  • Since the acceptance was never notified by the school committee acting in their official role, the issue of contract violation never comes up. 

  • Legally speaking, nothing is wrong with the current position, and all parties involved will benefit from the court's decision.


JUDGMENT
The court finally determined that there was, in reality, no breach of contract, and the acceptance was never legally delivered to Powell. And because of this, he does not have any justification against Mr. Lee's decision of not appointing him to the role of headmaster. The court emphasized that- in order to constitute a genuine acceptance, there has to be some authorized person who conveys the same to the plaintiff. In the absence of this, there cannot be a legitimate contract, and consequently the court noted that a contract was never created in this case.

CONCLUSION
The above mentioned case was an English case that concerned contract law. The decision established that the offeree or an authorized representative must notify the offeror of their acceptance. It is crucial that the offeree announce the acceptance while operating in his official role or by any other person who has been lawfully authorized on his behalf. If any uninvited party transmits the offer for acceptance, the contract will be deemed null in that circumstance.


REFERENCE

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