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General+Rules+Pertaining+To+Contracts General+Rules+Pertaining+To+Contracts Document Transcript

  • Indian Contract Act The Main Structure of the Indian Contract Act, 1872 General Rules Preliminary – Sections 1 pertaining to and 2 [Short title, extent, contracts commencement and (Sections 1 to 75) interpretation clause]. Proposals, acceptance, communication and revocation of proposals [Sections 3 to 9] Voidable Contracts and Void agreements, free consents, capacities of parties etc. [Sections 10 to 30] Contingent Contracts [Sections 31 to 36] Performance of Contracts [Sections 37 to 67] Quasi Contracts [Sections 37 to 67] Breach of contracts and remedies for breach of contracts. [Sections 73 to 75] [II] Special Types of (1) Contracts of Indemnity Contracts and Guarantee [Sections 124 to 238] [Sections 124 to 147] (2) Principles of Contract of Bailment [Sections 148 to 181] (3) Contract of Agency [Sections 182 to 238] 1 Dr Subhash Gupta
  • Indian Contract Act Distinction Between an Agreement and a Contract: Agreement Contract Every promise and every An agreement enforceable set of promises, forming by law is a contract the consideration for each [Section 2(h)]. Merely other is an agreement. agreement is not a contract [Section 2(e)]. For but its enforceability at law constituting an agreement, together constitutes a an offer by one party and contract. its acceptance by other party are required. In other Thus, words an offer and its Contract=Agreement + its acceptance together Enforceability at law constitute an agreement. Thus, Agreement=Offer + its acceptance For constituting an An agreement becomes a agreement, a promise or contract only when such sets of promise forming agreement fulfills all the consideration for each legal conditions of a other are required. contract e.g. formation of legal relationship, free consent, lawful object, etc. An agreement is a wider A contract is specie of an concept than that of a agreement and as such it is contract a narrower concept. Therefore, it is said that every contract is an agreement but every agreement is not necessarily a contract. 2 Dr Subhash Gupta
  • Indian Contract Act It is not necessary that Every contract necessarily every agreement must creates a legal obligation create legal obligation because every contract is because all agreements do basically an agreement. not go to constitute contracts An agreement cannot be A contract is always concluding or a binding concluding and binding on contract the concerned parties. Section 10 states that all agreements are contracts if they are made by the free consent of parties competent to contract, for a lawful consideration and with a lawful object and are not hereby expressly declared to be void. Thus, an agreement must possess certain elements to become a contract. 3 Dr Subhash Gupta
  • Indian Contract Act Essential elements of a valid contract: Section 10 states that all agreements are contracts if they are made by the free consent of parties competent to contract, for a lawful consideration and with a lawful object and are not hereby expressly declared to be void. Thus, an agreement must possess certain elements to become a contract. Following are the essential elements of a valid contract: (a)There must be an agreement, (b)Parties to a contract must be competent, (c)There should be an intention to create a legal relationship, (d)There must be free consent of parties to the agreement, (e)Lawful consideration, (f) Legal or lawful object. (g)Agreement not expressly declared void by law, (h)Compliance with legal formalities, (i) Certainty and possibility of performance. 4 Dr Subhash Gupta
  • Indian Contract Act Classification of contracts (i) On the basis of mode of formation (a) Express contracts (b) Implied contracts (c) Quasi contracts (ii) On the basis of execution or performance (d) Executed contracts, (e) Executory contracts (f) Unilateral contracts (g) Bilateral contracts (iii) On the basis of the form of contracts (h) Formal contracts & (i) Simple Contract (iv) On the basis of validity or enforceability. (j)Valid contracts, (k)Void contracts, (l)Voidable contracts, (m)Illegal contracts, (n)Unenforceable contracts 5 Dr Subhash Gupta
  • Indian Contract Act Essentials or rules of a valid offer: The Indian Contract Act, 1872 contains certain legal rules or essentials regarding proposals or offers which are as under:- (a)Terms of an offer must be clear, specific or definite, certain and not loose or vague. (b)An offer must create legal relationship. (c)An offer must be communicated to the person to whom it is made. (d)Intention of offer must be to obtain the consent or assent. (e)Offer may be express or implied; general or specific. It may also be positive or negative. (f) An offer should not include any term or terms of non-compliance that may be assumed to lead acceptance. (g)A statement of price is not an offer. (h)An offer is different from an invitation to an offer. (i) Two identical cross-offers do not constitute a contract. (j) An offer can be made subject to any terms and conditions. 6 Dr Subhash Gupta
  • Indian Contract Act Lapse of an Offer: (a) An offer lapses if not accepted in the mode prescribed by an offer (b) An offer lapses after stipulated or reasonable time (c) An offer lapses by revocation (d) An offer lapses because of subsequent illegality or destruction of subject matter (e) Lapse of an offer by rejection Legal rules or essentials of a valid acceptance: (a) Acceptance must not be qualified. (b) Acceptance may be express or implied. (c) Acceptance must be communicated to the offeror. (d) Acceptance may be given for the offer that has been communicated. (e) Acceptance must be in the mode prescribed or usual and reasonable mode. (f) Acceptance must be communicated within a reasonable time. (g) Silence is not considered as a mode of acceptance. 7 Dr Subhash Gupta
  • Indian Contract Act (h) Acceptance of the proposal means acceptance of all terms of the offer made by the proposer. (i) If a principal makes a proposal through his agent, it is enough if the acceptance is communicated to the agent. (j) Acceptance must be communicated before the offer lapses or before it is withdrawn. (k) Acceptance must always be given by the party or parties to whom the offer is made. (l) Acceptance must make a clear intention on the part of the promisee to fulfill the terms of the promise given. An acceptance to do something which a person (promisee) has no intention to perform is not a valid acceptance. (m) If an acceptance is given by a person which is subject to certain condition e.g. subject to formal contract or subject to contract to be approved by solicitors or subjects to contract, no contract can be formed till a formal contract is entered into or permission of the concerned persons is obtained. 8 Dr Subhash Gupta
  • Indian Contract Act Essential elements of a valid or lawful consideration: Consideration is nothing but some act or forbearance or promise, suffered or done or made by the promisee for the promise. But every act or forbearance is not a consideration unless it possesses certain essential elements which are noted down below:- (a)Consideration may be an act to do something or abstinence or forbearance of doing something. (b)Consideration may be past, present or future. (c)Consideration must be real and not illusory. (d)Consideration should move at the desire of the promisor. (e)Consideration may move from any person including the prormisee. (f) For supporting each independent promise, there must be an independent consideration. (g)Consideration need not be adequate. (h)Consideration must be something that the promisor is not already bound to do. (i) Consideration must be valuable in the eyes of law. 9 Dr Subhash Gupta
  • Indian Contract Act Exceptions to the rule of “No consideration, no contract”: (a) Promise made on account of love and affection (b) Promise for compensation of voluntary services (c) Promise to pay any time bared debt (d) Contract of Agency (e) Completed gifts Exceptions to the rule of NO CONSIDERATION, NO CONTRACT Promises made on Contracts of account of love and Completed gifts affection Promises for Contract of Compensating Agency voluntary services Promises to pay time-barred debts 10 Dr Subhash Gupta
  • Indian Contract Act Kinds of Consideration: There are following five kinds of consideration: 1. Present or Executed Consideration. 2. Past Consideration. 3. Future or Executory Consideration. 4. Unlawful Consideration. (i) When forbidden by law. (ii) When defeat the provisions of law (iii) When they are fraudulent (iv) When cause injury to other persons or their property. (v) When opposed to public policy. 5. Illusory or Unreal Consideration. Capacity of Parties All agreements are contracts provided that: (a) they are made by the free consent of parties (b) these parties must be competent to contract (c) the contract must be for a lawful consideration and with a lawful object and (d) they must not be expressly declared to be void. 11 Dr Subhash Gupta
  • Indian Contract Act Agreement with the minors: (a) Agreement with or by a minor is absolutely void (b) No Ratification of Minor’s contract (c) A minor can be a promisee (d) No restitution in agreements with a minor (e) Minor’s Insolvency (f) No estoppel in the case of a minor (g) Minor as a partner (h) A minor as an agent (i) A person working as a surety for a minor (j) Liability of a minor for necessities (k) Responsibility of parents or guardians of a minor (l) Liability of a minor for torts (civil wrong) 12 Dr Subhash Gupta
  • Indian Contract Act Types of Unsound Mind (i) Permanent Unsoundness (ii) Temporary (1)Illness (2)Shock (3)Accidental (4)Intoxication (a) Congenital (b) Non-Congenital i.e. right from birth (i) Accidental (ii) Disease Persons disqualified from contracting by the law: (a) Alien enemies, (b) Foreign sovereigns, their diplomatic staff and accredited representatives; (c) Insolvents, (d) Convicts, (e) Corporations. 13 Dr Subhash Gupta
  • Indian Contract Act Consent is said to be free when it is not caused by : (1) Coercion, as defined in Section 15, or (2) Undue influence, as defined in Section 16, or (3) Fraud, as defined in Section 17, or (4) Misrepresentation, as defined in Section 18, or (5) Mistake, subject to the provisions of Sections 20, 21 and 22. Coercion: “Coercion” is the committing, or threatening to commit, any act forbidden by the Indian Penal Code or the unlawful detaining, or threatening to detain, any property, to the prejudice of any person whatever, with the intention of causing any person to enter into an agreement. Characteristics of Coercion: (a)Coercion implies committing or threatening to commit any act forbidden by the Indian Penal Code. (b)Coercion also implies the unlawful detaining or threatening to detain the property of another person. (c)The act of coercion must have been performed with the intention of causing any person to enter into an agreement. (d)It is not necessary that the coercion must be applied by a party to the contract. It also can be applied by a stranger. (e)It is not necessary that the Indian Penal Code should be in force at the place where the coercion is applied. Following famous illustration will make this characteristic very clear. 14 Dr Subhash Gupta
  • Indian Contract Act Undue Influence : (1) A contact is said to be induced by ‘undue influence’ where the relations subsisting between the parties are such that one of the parties is in a position to dominate the will of the other and uses that position to obtain an unfair advantage over the other. (2) In particular and without prejudice to the generality of the ‘foregoing principle, a person is deemed to be in a position to dominate the will of another: (a)Where he holds a real or apparent authority over the other or where he stands in a fiduciary relation to the other; or (b)Whether he makes a contract with a person whose mental capacity is temporarily or permanently affected by reason of age, illness, or mental or bodily distress. (3) Where a person who is in a position to dominate the will of another, enters into a contract with him, and the transaction appears, on the face of it or on the evidence adduced, to be unconscionable, the burden of proving that such contract was not induced by undue influence shall lie upon the person in a position to dominate the will of the other. 15 Dr Subhash Gupta
  • Indian Contract Act Important elements of undue influence: (a)The relations subsisting between the parties to a contract are such that one of them is in a position to dominate the will of the other; (b)The dominant party uses his position to obtain an unfair advantage over the party; (c)The dominant party may hold a real or an apparent authority over the other party, and contract is entered into by using an undue influence. Important points of Distinction between Coercion and Undue Influence: (a)In coercion, some criminal act is involved while in undue influence, criminal act is not involved. (b)Coercion is mainly of a physical character whereas undue influence is of a moral character. Therefore, sometimes, undue influence is called as moral coercion. (c)In coercion, the consent of an aggrieved party is obtained by committing or threatening to commit an act forbidden by the Indian Penal Code or detaining or threatening to detain properly unlawfully. In undue influence, the consent of an aggrieved party is obtained under moral influence. Person obtaining the 16 Dr Subhash Gupta
  • Indian Contract Act consent takes the undue advantage of his position. (d)In coercion, intention is always there to induce someone to enter into an agreement. In undue influence, the party which uses his influence uses his position to obtain certain advantage at the cost of other party. (e)In coercion, it is not necessary that there should be some relationship between the promisor and the promisee. But in undue influence, there always exists some sort of relationship between the parties to the agreement. Such relationship can be fiduciary or paternal. Essential elements of Fraud: (a) There must be a false representation. (b) It must be done by the party or his agent. (c) The representation must relate to a fact. (d) The other party must have been attracted to act upon the representation leading to a fraud. (e) The representation intentionally done to commit a fraud must have been done before the conclusion of the contract. (f) The other party must have relied upon the representation intentionally done to commit a fraud and thereby must have been deceived. 17 Dr Subhash Gupta
  • Indian Contract Act Effects of fraud and remedies The party defrauded can exercise any of the following rights: (a)As a contract induced by fraud is viodable at the option of the party defrauded, he can avoid or rescind the contract but he must do so within a reasonable time. (b)The party defraud can sue for the damages suffered or ask for the restitution. (c)The party can insist for the performance of the contract on the condition that the other party shall take necessary steps to put the defrauded party in a position in which it would have been if the representation made had been true. 18 Dr Subhash Gupta
  • Indian Contract Act Mistake Mistake of Law Mistake of fact (Section 21) (Section 20) Mistake of Law Of the country Unilateral Bilateral mistake mistake Mistake of Law of the of the foreign country Mistake as to possibility of performing the Contract Mistake as to the subject matter regarding (1)Existence (5) Subject matter (2) Identity (3) Quantity (6) Title (4) Quality (7) Price 19 Dr Subhash Gupta
  • Indian Contract Act FLAWS IN CONSENT Flaws in (A) Coercion [Section 15] Consent (B) Undue Influence [Section16] (C) Fraud [Section 17] (D) Misrepresentation [Section 18] (1) By positive statement or assertion (2) By breach of duty (3) By causing a mistake by innocent misrepresentation (E) Mistake of Law and Fact [Sections 20 and 21] Legality of Object and Consideration (i) It is forbidden by law; or 20 Dr Subhash Gupta
  • Indian Contract Act (ii) It is of such nature that, if permitted, it would defeat the provisions of any law; or (iii) It is fraudulent; or (iv) It involves or implies injury to the person or property of another; or (v) The court regards it as immoral; or (vi) The court regards it as opposed to public policy. (VI) When the court regards a consideration or an object of an agreement as opposed to public policy, such agreement is unlawful: (1)Agreements to commit crimes are void. If the consideration is an agreement is to commit any crime, such agreement is opposed to the public policy. (2)Agreements with enemies are void. If someone enters into an agreement with enemies to trade in goods without prior permission and without obtaining license from the proper authority of Indian Government, such agreement is void. (3)An agreement barring a right of legal proceedings of any person is void [Sec. 28]. (4)An agreement is restraint of trade is void. Every person has a right to carry on lawful trade or business or to do any lawful 21 Dr Subhash Gupta
  • Indian Contract Act occupation and therefore agreements entered into a restraint of trade are void [Section 27]. (5)Wagering agreements are not only void but illegal. This means the agreements to pay money or money’s worth as happening or non-happening, of particular event or events are void. No suit can be filed to recover anything alleged to be won on the wager. (6)Agreements interfering an administration of justice are void. Such agreement may take any of the following forms: (a)Stifling prosecution: Any agreement not to prosecute an offender or criminal is an agreement for stifling prosecution and therefore unlawful and void. (b)Interference with the course of justice: An agreement obstructing or interfering the ordinary process and procedure of justice is unlawful and void e.g. agreements of giving bribes, threatening the witnesses, pleaders etc. (2)Agreements by way of champerty and maintenance are not absolutely void. If the object of entering into such agreements is not immoral, they are valid. An agreement whereby one person agrees to assist another in the process of recovering money or any other property and to share the proceeds thus acquired is called champerty. When a person has no legal interest in the subject matter but still he agrees to give 22 Dr Subhash Gupta
  • Indian Contract Act some sort of assistance to help the other person to bring a legal action, this is known as maintenance. (3)Agreements tending to create interest opposed to duty are unlawful. If any person enters into an agreement whereby he is supposed to do something which is opposed to his duty, such agreement is void. (4)The agreements not to plead to bar of limitation to claims are void as they defeat the provisions of the law of limitation. (5)Agreements interfering with marital duties are unlawful and therefore void. These agreements include promises by married person to marry during the lifetime or after the death of their wives, agreements to lend money to women in consideration of their getting divorces and marrying the lenders etc. (6)An agreement which a person promises in return to procure the marriage of another person for some monetary consideration is void as it is opposed to public policy. (7)According to Section 26 of the Act, every agreement in restraint of the marriage of any person, other than a minor, is void as the law considers marriage as the right of every person. Void Agreements 23 Dr Subhash Gupta
  • Indian Contract Act All agreements entered into are not enforceable by law. The agreements which are not enforceable by law are said to be void [Section 2(g)] such agreements do not give rise to any legal consequences. All agreements that are opposed to public policy are void. Following agreements have been expressly declared to be void by the Contract Act: (1)Agreements by incompetent parties [Sec. 11] (2)Agreements made under mutual mistake of facts [Section 20]. (3)Agreements the consideration or object of which is unlawful [Section 23]. (4)Agreements the consideration or object is partly unlawful [Section 24]. (5)Agreements entered into without any consideration [Section 25]. (6)Agreements made in restraint of marriages [Section 26]. (7)Agreements made in restraint of trade, business, occupation [Section 27]. (8)Agreements in restraint of legal proceedings [Section 28]. (9)All agreements the, meaning of which is not certain [Section 29]. (10)Wagering agreements [Section 30]. (11)Agreements contingent on impossible events [Section 36]. (12)Agreements to do an act impossible in itself [Section 56]. 24 Dr Subhash Gupta
  • Indian Contract Act Distinction between a-wagering agreement and a contingent contract:- A Wagering Agreement Contingent Contract A wagering agreement is an It is a contract to do or not to agreement between two parties do something, if some event, wherein one party promises to collateral to such contract, pay money or money’s worth does or does not happen. on happening of some [Section 31]. uncertain event in consideration of other party’s promise to pay if that event does not take place [Section 30]. Every wagering agreement is of Every contingent contract a contingent nature. may not be of a wagering nature. A wagering agreement is A contingent contract is valid. absolutely void and illegal. Wagering agreements always Contingent contract may not consist of reciprocal promises. contain reciprocal promises. 25 Dr Subhash Gupta
  • Indian Contract Act The future event is the sole In a contingent contract, the determining factor in a future event is collateral. wagering agreement. Except for winning or losing of Parties to a contingent money or money’s worth, the contract have some interest in parties to a wagering the subject matter. In the agreement have no other absence of such interest in interest in the subject matter. the subject matter, a contingent contract may turn to be of a wagering nature. In a wagering contract, none of In a contingent contract, the parties intends to perform parties intend to perform the the contract itself. They are contract itself. only interested to pay or receive money or money’s worth and therefore a wagering agreement is considered as a game of change. Contracts which need not be performed. 26 Dr Subhash Gupta
  • Indian Contract Act 1. When performance of a contract becomes impossible, such contract need not be performed, [Section 56]. 2. When there is an agreement between the parties to a contract to substitute a new contract for it or to rescind the old contract or after it, there is no need to perform the original contract [Section 62]. 3. When every promisee may dispense with or remit, wholly or in part, the performance of the promise made to him, or may extend the time for such performance, or may except instead of it any satisfaction which he thinks fit, such contract need not be performed [Section 63]. 4. When a person, at whose option a contract is voidable, rescinds it, the other party thereto need not perform any promise contained therein in which he is promisor. Such contract need not be performed [Section 64]. 5. If any promisee neglects or refuses to afford the promisor reasonable facilities for performance of his promise, the promisor is excused by such neglect or refusal as to non-performance caused thereby. 27 Dr Subhash Gupta
  • Indian Contract Act Who may perform the contract ? (a) Promisor [Section 40]. (b) Agent [Section 40]. (c) Legal representative [Section 37(2)]. (d) Third person [Section 41]. (e) Joint promisor [Section 42 to 44]. Time and place of performance of a contract: (a) Performance of promise within a reasonable time. (b) Performance of promise where time and place is specified. (c) Application of performance at proper time and place i.e. on a certain day and at a certain place. (d) Promisor to apply to the promisee to appoint a place for performance of promise. (e) Manner or time by promisee to perform a promise. Time of performance of contract: (a) Where time is the essence of the contract. (b) When time is not the essence of the contract. Discharge of Contract 28 Dr Subhash Gupta
  • Indian Contract Act A contract is said to be discharged, terminated or dissolved when the rights and obligations created by that contract come to an end. Discharge of contract means termination of the relationship between the parties to a contract. A contract may be discharged or dissolved in any one of the following: (a)By performance of the contract (b)By agreement. (c)By lapse of time. (d)By operation of law. (e)By breach made by any party to contract. (f) By assignment. (g)By impossibility of performance. (h)By material alternation without the consent of the concerned party. Discharge of a contract by agreement or consent: (1)By novation [Section 62]. (2)By recission [Section 62]. (3)By alteration [Section 62]. (4)By remission [Section 63]. (5)By waiver. (6)By merger. (7)By owing to the occurrence of an event. 29 Dr Subhash Gupta
  • Indian Contract Act Discharge of contract by operation of law: (a)Death: In contracts where personal skill or taste or ability is required, the death of the promisor results in termination of contracts. In other contracts where the personal skill or ability is not required, the rights and the liabilities of the deceased person pass on to the legal representative(s) as the case may be. (b)Insolvency: When a person is declared insolvent, he is released from performing his part of the contract by law. Thus, an insolvent is discharged from all liabilities incurred prior to his adjudication. (c)Merger: It implies that an inferior right accruing to the party to a contract merges into a superior right accruing to the same party under the same or other contract. (d)Complete loss of evidence: If the evidence proving the existence of a contract is lost, it stands terminated. (e)When the rights and liabilities vest in one and the same person, a contract stands terminated e.g., If a bill of exchange is received by its acceptor, other parties are discharged. Discharge of contract by breach: 30 Dr Subhash Gupta
  • Indian Contract Act (1)Actual breach: It means breach committed by either at the time when the performance of the contract is due or during its performance. Actual breach is also known as present breach. (2)Anticipatory breach: It implies repudiation of an integral part of the contract by the promisor before the actual date of performing the contract [Section 39]. Discharge of contract by assignment: Discharge of contract by impossibility of performance: i. Destruction of subject matter. ii. Death or incapacity of personal service. iii.Non-existence of a particular state of things. iv.Non-occurrence of a particular state of things. v. Out-break of war. vi.Change of law. Discharge of contract by material alteration: Remedies for Breach of a Contract: 31 Dr Subhash Gupta
  • Indian Contract Act (a)Recession of the contract. (b)Suit for damages. i. Ordinary damages ii. Special damages. iii. Nominal damages. iv. Vindictive damages. v. Damages agreed in advance. vi. Damages of loss of reputation. (c)Quantum meruit. (d)Suit for specific performance. (e)Suit for injunction Specific performance is not granted in the following cases: (1)Where damages are an adequate remedy for breach. (2)Where the contract is in its nature revocable. (3)Where the contract is uncertain. (4)When the contract is entered into by trustees in breach of their trust. (5)Where the contract is inequitable to either party. (6)Where it is not possible for the Court to supervise the contract. (7)When a company makes any contract using the powers not conferred on it by its Memorandum of Association. Kinds of Quasi-contracts: 32 Dr Subhash Gupta
  • Indian Contract Act There are five kinds of quasi-contractual obligations: (a)Supply of necessaries [Section 68]. (b)Reimbursement of payment by an interested person [Section 69]. (c)Liability of payment for non-gratuitous acts [Section 70]. (d)Responsibility of a finder of goods [Sec. 71]. (e)Payment of money by mistake or coercion [Section 72]. Distinction between a contract and a quasi-contract: Contract Quasi-Contract 1. An agreement 1. Quasi-Contract is enforceable by law is a nothing but certain contract [Section 2(h)]. relations resembling those created by a contract and it is not actually a contract. 2. A contract basically 2. There is no agreement 33 Dr Subhash Gupta
  • Indian Contract Act requires an at all in the quasi- agreement. contract 3. A contract results from 3. Quasi-Contract is itself the will of parties an obligation expressed with a view resembling that created to create certain by a contract. obligation. 4. There are various 4. There are no such essential elements essential elements required for a valid required for formation contract. of a quasi contract. 5. A contract is always 5. A Quasi-Contract is not full-fledged and is full-fledged but it is an binding on those who implied contract. enter into the contract. Strictly speaking, a Quasi-Contract is not a contract not in fact but in law. Distinction between a Contract and a Quasi Contract: Contingent Contract Quasi-Contract 34 Dr Subhash Gupta
  • Indian Contract Act A contingent contract is a Under certain conditions, the contract to do or not to do law creates and enforces legal something, if some event, rights and obligations when no collateral to such contract, real contract exists. Such does or does not happen. obligations are known as quasi [Section 31]. contract. The contract Act describes Quasi-Contracts as certain relations resembling those contracts. In a contingent contract, In a Quasi-Contract, benefit of performance of a contract an act done by one person is depends upon happening or taken by some other person. not happening of some event in That person acts on his own the future. but expects certain return. A contingent contract is a A Quasi-Contract is a contract is contract in fact. law. In a contingent contract, there In a Quasi-Contract, there is is the responsibility to perform always equitable obligation legal obligation. alongwith legal obligation as it rests on the ground of equity. A contingent contract is a valid A Quasi-Contract in the strict contract. sense is not a contract at all. 35 Dr Subhash Gupta