QUASI CONTRACT UNIT III QUASI CONTRACTSEC 67 72

QUASI CONTRACT UNIT - III

QUASI CONTRACT(SEC 67 -72) There is no contract or agreement between the parties. But they are put in the same position as if there were a contract between them. These relationships are termed as quasi contracts or constructive contract. Is a kind of contract by which one party is bound to pay money in consideration of something done or suffered by other party. i. e. , No man must grow rich out of another person’s cost. Quasi contract prevent unjust enrichment or unjust benefit. i. e. , no one should grow rich out of another person’s loss.

FEATURES OF QUASI CONTRACT 1. 2. 3. 4. 5. It is imposed by law and does not arise from any contract. It is not a true contract but an obligation imposed by law. It arises from duty of a party and not by promise of any party. It is not intentionally formed by the party. It rest on the principle of equity that a person should not be allowed unjustly to enrich himself at the expense of another.

DISTINCTION BETWEEN QUASI CONTRACT AND CONTRACT QUASI CONTRACT OBLIGATIONS: Obligation imposed by law. ESSENTIALS OF CONTRACTS: It does not posses all the essentials elements of a contract. BASIS: It found upon the Principle of equity. FORMATION: The law imposes upon the parties CONTRACT Obligation is mutually created by the parties. It posses all the essentials of a contract. It is founded upon the law of contract. It is intentionally formed by the parties.

TYPES OF QUASI CONTRACT 1. 2. 3. 4. 5. Claims for necessaries supplied (Sec 68) Payment by an interested person (Sec 69) Obligation to pay non-gratuitous act (Sec 70) Responsibility of finder of goods (Sec 71) Money paid by mistake or under coercion (Sec 72)

Claims for necessaries supplied Section 68 conditions Ø If a person incapable of entering into a contract Ø Or anyone whom he is legally bound to support Ø is supplied by another person with necessaries suited his condition in life, Ø the supplier is entitled to recover the price from the property of the incapable person. Example: A supplies the wife and children of B, a lunatic with necessaries suitable to their condition in life. A is entitled to be reimbursed from B's property.

2. Payment by all interested person (Section 69) Following conditions must be satisfied. 1. A person must by law be bound to pay some money. 2. Another person must be interested in the payment of that money. 3. The other person must have paid the money because ofsuch interest. Examples: (a) As goods were wrongfully attached to realise the arrears of Government revenue due by B. A pays the dues to save his property. He is entitled to recover the amount from B. [Tulsa Kunwar v. Jageshar Prasad (1906) 28 All. 563 J.

2. Payment by all interested person (Section 69) The essential requirement of Sec. 69 are as follows: § The payment made should be bona fide for the protection of one’s interest. § The payment should not be a voluntary one. § The payment must be such as the other party was bound by law to pay.

OBLIGATION TO PAY FOR NONGRATUITOUS ACTS (SEC 70) 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 thing so done or delivered. for example : A, a tradesman leaves goods at B's house by mistake. B treats the goods as his own. He is bound to pay A for them.

4. Responsibility of finder of goods (Section 71) person who finds goods belonging to another and takes them into his custody, is having the same responsibility as a bailee finder of goods is bound to take as much care of the goods found as a man of prudence would take of his own goods under similar circumstances. The finder, however, can retain the goods in the following cases. (i) Where thing found is in danger ; (ii) Where the owner cannot with reasonable diligence be found out; (iii) Where the owner is found out, but refuses to pay lawful charges of the finder; (iv) Where the lawful charges of the finder, in respect of the thing found, amount to two-thirds of the value of thing found.

5. Money paid by mistake or under coercion (Section 72) A person to whom money has been paid or anything delivered by mistake or under coercion, must repay or return it. Example: A person purchased a car at a price which it was represented by the seller to be controlled price, but afterwards the vendee came to know that he paid more than controlled price, upon the false representation of the seller. It was held that the excess payment was a payment made by mistake and the vendee could recover [Lakshman Prasad & Sons u. S. V. Kamalba AIR 1960 Mad. 335].

Compensation for failure to discharge obligation The contract created by quasi-contracts: § When an obligation created by a quasi-contract is not discharged, § If that person had contracted to discharge it and had broken his contract. § The injured party is entitled to receive the same compensation from the party in default. (Sec. 73)

QUESTIONS 1. (a) (b) (c) (d) A quasi contract Is a agreement Is created by legal obligation None of these

QUESTIONS 2. A quasi contract is also known as (a) Contract implied in law (b) Implied contract (c) Unintentional contract (d) Both (a) and (c)

QUESTIONS 3. A quasi contract is (a) Not made by the parties (b) The result of application of principle of equity (c) Is imposed by law (d) All the above

QUESTIONS 4. A minor has been supplied necessaries on credit (a) He is not liable (b) He is personally liable (c) His estate is liable (d) He is not personally liable

QUESTIONS 5. A quasi-contract arises from (a) Intention to create legal relations. (b) Compliance of all legal formalities. (c) A true contract. (d) The principle of natural justice.

QUESTIONS 6. A person enjoying the benefits of lawful nongratuitous acts of another person, he : (a) Is bound to pay the another (b) Is not bound to pay another (c) That another person cannot claim (d) Above (b) and (c).

QUESTIONS 7. Sometimes, a person find certain goods belonging to some other persons. In such a case, the finder (a) Becomes the owner of the goods can use them (b) Is under the duty to trace the true owner and return the goods. (c) Can sell the perishable goods If the owner cannot be found. (d) Both (b) and (c).

QUESTIONS 8. A finder of goods has the same responsibility as a (a) Bailee (b) Next best owner (c) Real owner (d) bailor