Contract Law

Lalman Shukla v. Gauri Dutt

(1913) 11 ALJ 489

Facts

Gauri Dutt’s nephew went missing.
Before announcing any reward, Gauri Dutt sent his servant, Lalman Shukla, to search for the missing boy.
After Lalman had already left, Gauri Dutt published handbills offering a reward to anyone who found the boy.
Lalman eventually located the nephew and brought him back.
He was compensated for his travel expenses and continued in his employment.
Lalman did not claim the reward immediately.
Later, after leaving service, he learned of or relied upon the reward announcement and sued for payment.
The evidence showed that he did not know of the reward when he began the search and performed the act.

Whether a person can accept a reward offer without knowledge of that offer.
Whether performance of the required act is enough when the act was performed under an existing duty.

Acceptance must be made with knowledge of the offer.
A person cannot accept an offer of which he is unaware.
In a unilateral contract, performance constitutes acceptance only when the act is done in response to the offer.
Performance of an existing contractual or employment duty does not ordinarily provide fresh consideration for a separate reward.

The reward announcement was capable of being a unilateral offer to the public.
However, Lalman had already been instructed by his employer to search for the missing boy.
He left to perform that duty before the reward was announced or before he knew of it.
Therefore, when he searched for and found the boy, he was acting:
under his employer’s instructions;
in performance of his existing service obligation;
not in response to the public reward.
There was no connection between the offer and Lalman’s conduct.
Contractual acceptance requires conscious assent.
A person cannot intend to accept a promise that he does not know exists.
Lalman’s later knowledge of the reward could not retrospectively turn his earlier performance into acceptance.
The Court also considered the pre-existing duty point.
Lalman had been sent specifically to find the boy.
His search was therefore not a new detriment undertaken in exchange for the reward.
It was part of what he was already employed and instructed to do.
The case demonstrates that, in reward cases, the claimant must prove more than factual performance.
The claimant must show:
knowledge of the offer; and
performance in reliance on or in response to that offer.

The Allahabad High Court held that Lalman was not entitled to the reward.
He had no knowledge of the offer when he performed the act.
He was also acting under an existing duty owed to his employer.
No contract was formed.
Use this case for: knowledge of an offer is essential before performance can amount to acceptance.