Page 31 - DMGT102_MERCANTILE_LAWS_I

Unit 2: Offer and Acceptance

In order that the Section may apply, it is necessary to prove that: (a) The person making the Notes
payment is interested in the payment of money, i.e. the payment was made bona fi de, for
the protection of his own interest. (b) The payment should not be a voluntary payment. It
should be such that there is some legal or other coercive process compelling the payment.
(c) The payment must be to another person. (d) The payment must be one which the other
party was bound by law to pay.

3. Obligation of a person enjoying benefits of non-gratuitous act. Where a person lawfully

does anything for another person, or delivers anything to him, not intending to do so
gratuitously, and such other person enjoys the benefit thereof, the latter is bound to make

compensation to the former in respect of, or to restore the thing so done or delivered
[s.70].

Example:
(i) A, a tradesman, leaves goods at B’s house by mistake. B treats the goods his own. He is
bound to pay for them.

(ii) A saves B’s property from fire. A is not entitled to compensation from B, if the
circumstances show that he intended to act gratuitously.
In order that s. 70 may apply, the following conditions must be satisfi ed:
(a) the thing must be done lawfully;
(b) the intention must be to do it non-gratuitously; and
(c) the person for whom the act is done must enjoy the benefit of it.

4. Responsibility of finder of goods. Ordinarily speaking, a person is not bound to take care of
goods belonging to another, left on a road or other public place by accident or inadvertence,
but if he takes them into his custody, an agreement is implied by law. Although, there is in
fact no agreement between the owner and the finder of the goods, the finder is, for certain

purposes, deemed in law to be a bailee and must take as much care of the goods as a man
of ordinary prudence would take of similar goods of his own. This obligation is imposed
on the basis of a quasi contract. Section 71, which deals with this subject, says: “A person

who finds good belonging to another and takes them into his custody, is subject to the same
responsibility as a bailee”.
5. Liability of a person to whom money is paid, or thing delivered by mistake or under
coercion (s.72). A person to whom money has been paid, or thing delivered by mistake or
under coercion, must repay or return it.

Example:
(i) A and B jointly owe ` 1,000 to C. A pays the amount to C. Also, B, not knowing this fact,
pays ` 1,000 to C. C is bound to repay the amount to B.

(ii) A railway company refuses to deliver up certain goods to the consignee except upon
the payment of an illegal charge for carriage. The consignee pays the sum charged in
order to obtain the goods. He is entitled to recover so much of the charge as was illegally
excessive.
The term mistake as used in s. 72 includes not only a mistake of fact but also a mistake of law.

There is no conflict between the provisions of s. 72 on the one hand and Ss. 21 and 22 on the other.
If one party under mistake, whether of fact or law, pays to another party money which is not

due by contract or otherwise, that money must be repaid [Sales Tax Officer, Benares v. Kanhaiyalal
Makanlal Saraf, (1959) S.C.J.53].

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