This is an important case study in Indian Contract Act. The case relates to Offer and Acceptance.

let’s understand the events of the case:

  1. Gauri Dutt lived with his nephew. One day his nephew went missing.
  2. Gauri Dutt sent his servant Lalman Shukla in search of his nephew.
  3.  After Lalman Shukla went to search the nephew, Gaui Dutt announced a reward of 501 to anyone who finds his nephew and returns him.
  4. Lalman Shukla without knowing about the reward, finds the nephew and returns him to Gauri Dutt.
  5. Later on, Lalman Shukla comes to know about the reward.
  6. Lalman Shukla goes to Gauri Dutt and claims the reward. But Gauri Dutt refuses to give him the reward money.
  7. Lalman Shukla files a case against Gauri Dutt for breach of the contract and non-fulfillment of obligation.
  8. The Court decides that Lalman Shukla is not entitled to the reward because of the rule that “Offer must be communicated to the offeree”.
  9. In this case, Lalman Shukla wasn’t aware of the reward when he accepted the reward i.e. returned back the nephew to Gauri Dutt.
  10.  Another rule which was violated in the case was ” Acceptance must not precede the offer”. Lalman Shukla returned back the nephew and then came to know about the offer. So, he accepted the offer first and then came to know about the offer.
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