Quasi contract.pptx

 Law creates and enforces legal rights and
obligations although the parties have never
entered into a contract.
 Such obligations imposed or created by law
are known as “Quasi-Contracts”.
 In other words, Contracts constituted by law
are known as Quasi Contracts.
 In other words, relationship in nature of a
contract is also a quasi contract.

 The Indian Contract Act describes them as
“certain relations resembling those created
by contracts”.
 In English law, they are referred to as
“implied contracts or constructive
contracts”.
 Quasi-contracts are based on the principles
of equity and justice. The claim based on a
quasi contracts is generally for money. The
remedy in quasi-contracts is only
compensation and not damages.

 Amazon delivers goods to B mistaking him to
be C, and B consumes them. B is bound to
pay compensation to Amazon for the value of
goods. Law imposes such a duty on B. This is
a quasi-contract.

1. It is imposed by law and does not arise by
agreement.
2. The duty of a party and not the promise of
any party is the basis of such contract.
3. The right under it is always a right to money
and though not always to a liquidated sum of
money.
4. The right is available against specific
persons and not the whole world.
5. A suit for breach may be filed in the same
way as in case of a complete contract.

 1. Claims for necessaries supplied to a person
incompetent to contract. (Sec 68).
 2. Payment by an interested person. (Sec 69)
3. Benefits of non-gratuitous act. (Sec 70)
 4. Responsibility of finder of goods. (Sec 71)
 5. Money paid by mistake or under coercion.
(Sec 72)

 Where necessaries are supplied to a person
who is incompetent to contract, the supplier
is entitled to recover the price from the
property of the incompetent person under
section 68 of the Indian Contract Act.
Example: A supplies B, a minor, with
necessaries suitable to his condition in life. A
is entitled to be reimbursed from B’s
property.

 Section 69 provides that a person who is interested in
the payment of money of which another is bound by
law to pay, and who therefore, pays it, is entitled to
be reimbursed by the other”.
 In order to apply section 69, the following conditions
must be satisfied.
 Example : Property Tax paid by tenant.
 a. The payment made should be bonafide for the
protection of one’s interest.
 b. The payment should not have been made
gratuitously or voluntarily.
 c. Another person must be bound by law to pay.
 d. The payment must be made to a third party and
not to himself.

 When a person lawfully does anything for
another person or delivers anything to him, not
intending to do so gratuitously, such person who
enjoys the benefit must reimburse the former or
must restore to him the thing so delivered.
 For the application of section 70, the following
conditions must be fulfilled.
 a. The act must have been done lawfully.
 b. It must have been done by the person not
intending to act gratuitously, i.e., without any
consideration.
 c. The person for whom the act is done must
have enjoyed the benefit of that act.

 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.
 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.

 A person who finds goods belonging to
another and takes them into his custody is
liable as a bailee.
 The finder of goods must try to find out the
real owner of the goods and deliver the
goods to him on demand.
 The obligations are imposed on finder of
goods by Section 71 of the Indian Contract
Act.

 According to section 72, a person to whom
money has been paid or anything delivered
by mistake or under coercion, must repay or
return it.

 A and B jointly owes ₹ 100 to C. A alone pays
the amount to C, and B, not knowing this
fact, later on also pays ₹ 100 to C. C is bound
to repay the amount to B.

Contract Quasi contract
Essential elements for formation
of contracts are present.
The essential elements for
formation of contracts are
absent.
Obligation is created by consent
of parties.
Quasi Contracts Obligation is
imposed by law.
Contract is an agreement There is no agreement at all

⚫ Breach of contract.
⚫ Types of Breach of contract.
⚫ Remedies for breach of contract.
⚫ Suit for Recession.
⚫ Suit for Damages.
⚫ Suit for Quantum Meruit.
⚫ Suit for Specific performance.
⚫ Suit for Injection.
14

 A breach of contract occurs if any party
refuses or fails to perform his part of the
contract.
15

Breach
Anticipatory Breach Actual Breach
16

17
⚫ It is also called “Present Breach”
⚫ Actual breach occurs
⚫ When during the performance of the contract
⚫ At the time of performance is due one party
fails or neglect to perform his obligation
under the contract
⚫ It gives the right to the aggrieved party to sue
the party at fault for damages for breach of
contract
⚫ Example
⚫ A agrees to deliver to B, tons of sugar on 5 th
July, He fails to do so on 5 th July, there is a
breach of contract by A

18
Anticipatory Breach is also called constructive breach of
contract
• When a party repudiates his liability under the contract
before the time of performance is due or
• When a party by his own act conduct disables himself for
performing the contract
For example:
R Agrees To Marry S , Before the date of Marriage
R Heard that S Going to Marry Rama

• Example: X enters into a contract to
supply Y with certain articles on the 1st
June Before 1 st of June, X informs Y that
he will not be able to supply the articles.
The breach committed by X here is
anticipatory breach
• Anticipatory breach of contract does not
by itself discharge the contract
• Discharge only when the aggrieved party
accepts the repudiation of the contract
• If he does not accept the repudiation the
contract continues to exist and may be
performed by the other party if possible

⚫ When one party breaches a contract, the other party
may ask a court to provide a remedy for the breach.
The court may order the breaching party to pay money
to the non-breaching party.
20

SUIT FOR
RESCISSION
SUIT FOR DAMAGES
SUIT FOR QUANTUM
MERUIT
SUIT FOR SPECIFIC
PERFORMANCE
SUIT FOR AN
I NJUNCTION
21

⚫ The term Rescission refers to
the cancellation of contract.
⚫ when there is breach of contract by one party,
the other party may sue to treat the contract as
rescinded
⚫ When the court grant rescission, the aggrieved
party is free form all his obligations under the
contract
⚫ He becomes entitled to compensation for and
damage which he suffered.
2

X promises to deliver a book on 5 th January and Y agrees to
pay its price on receipt of the book. Y may treat the contract as
repudiated and may refuse to pay the price
23

Remedy by way of damages is the most
common remedy available to the injured party.
When a contract is breached the injured
party by the court for the loss or injury
suffered by him , the fundamental principle
underlying damages is not punishment but
compensation
24

• ORDINARY
• SPECIAL
• EXEMPLARY
• NOMINAL DAMAGES
• DAMAGES FOR
INCONVENIENCE AND
DISCOMFORT
• LIQUIDATED DAMAGES AND
PENALTY
• STIPULATION FOR INTEREST
• FORFEITURE OF SECURITY
 DEPOSIT
THERE
ARE 8
TYPES OF
DAMAGES
25

⚫ Mr. A to pay 3 lac to Mr.B on 1st April. Mr.A does not pay
the money on that day. Mr. B is unable to pay her debts
and suffer a loss.
A
B
Breach of contract
when ‘A’ don’t give
money to ‘B’.
26
Payable money

 It means “AS MUCH AS EARNED” or “in
proportion to the work done.”
 Right to ‘Quantum Meruit’ literally means a right to
claim the compensation for the work already done.
 A right to sue on a quantum meruit arises where
a contract partly performed by one party has
become discharged by the breach of the
contract
27

Mr.A engages Mr.B a contractor, to build a three storied
house. After a part is constructed ‘A’ prevents ‘B’ from
working any more. ‘B’ the contractor, is entitled to get
reasonable compensation for work done under the
doctrine of quantum merit in addition to the damages
for breach of contract.
28

 When the contract is discovered to be void
 Ex: Ram is appointed as M.D of a company as
a the BOD under a written contract which
provided for his remuneration, the contract
was found void because the directors who
constituted the Board were not qualified to
make the appointment. C to act under the
agreement and rendered services to the
company specified in the agreement and
reasonable remuneration on a quantum merit

 When something has been done without any
intention to do so gratuitously
 Where one party refuses to perform the
contract

31
⚫ Suit for Specific performance means demanding
the court’s direction to the defaulting party to carry
out the promise according to the terms of contract.
The defaulting party will be forced to perform the
act promise under the contract
It is granted only in the following cases
a. Where compensation in money is not an
adequate relief.
b. where the court cannot supervise the actual
execution of the contract
c. Where compensation in money cannot be
obtained
.

⚫ X agreed to sell an old painting to Y for
Rs50,000. Subsequently, X refused to
sell the painting . Here, Y may file a suit
against X for the specific performance
of the contract.
32

⚫ It is an order of the court restraining a
person from doing a particular act
⚫ The court by issuing injunction restrains a
person from doing what he has promised
not to do
⚫ May be temporary or permanent
⚫ Preventive relief granted at the discretion
of the court
33

⚫ A, a singer contracts with B the Manager of
a theatre to Sing at his theatre for one year
and not to do Singing at other theatre. But A
contracted to sing at C’s theatre and
refused to sing at B’s theatre. On suit by B
the court awarded damages to B,
compensate him for the loss caused by A’s
refusal.
34

 It is the duty of the seller to deliver the
goods and of the buyer to accept and pay for
them, in accordance with the terms of the
contract of sale. Sec. 31, The Sale of Goods
Act, 1930.
 The performance of a contract is a simple
transaction where the seller delivers the
goods and the buyer pays.

 The rules regarding the delivery of goods are
contained in Sec. 33 to Sec. 39 of the Sale of
Goods Act.
 Delivery of goods may be defined as a
voluntary transfer of possession of goods
from the seller to the buyer.
 Delivery means voluntary transfer of
possession of goods from one person to
anotherSeller: Delivers goods and receives
consideration. Buyer: Accepts and pays for
the goods. Terms: Contract can have terms of
delivery and payment.

 Seller: Delivers goods and receives
consideration.
 Buyer: Accepts and pays for the goods.
 Terms: Contract can have terms of delivery
and payment.

 1.Actual Delivery - The goods are handed
over by the seller to the buyer or to his
authorized agent; it has the effect of putting
the goods in the possession of the buyer:
Sec. 33. Example: Amar sold 10 tins of oil to
Akbar and delivered the same to him. In this
case, there is the actual delivery of oil from
Amar to Akbar.

2.Constructive or Delivery by Attornment –
 A third party (bailee) who is in possession of
the goods of the seller at the time of sale
acknowledges to the buyer that he holds the
goods on his behalf: Sec. 36(3).
 Example: A sells to B 10 bags of wheat lying
in C’s godown. A gives an order to C, asking
him to transfer the goods to B. C assents to
such order and transfer the goods in his
books to B. this is delivery by attornment.

 3.Symbolic Delivery - The goods are too bulky
and unwieldy such as large machinery, where
a symbolic passing of documents or keys and
the like demonstrate the transfer of goods.

 1. Part delivery of goods – Sec 34 –
 Goods being delivered as part of the whole;
if the part is severed from the whole then
the transfer is not of the whole but only
partial.
 2. Apply for delivery of goods – Sec 35
 Unless the buyer places his demand there is
no sale of goods, unless there is a contract to
that effect.
 It is a logical impossibility to supply you
something that you have not asked for.

 3. Place for the delivery of goods – Sec 36
 The place for the delivery of goods may be
specified in the contract itself.
 And where the place is so specified, the
goods must be delivered at the specified
place during the business hours and on a
working day.
 Where there is no specific agreement as to
the place of delivery, it shall be determined
as per Sec. 36(1)

 4. Time for the delivery of goods – Sec 36 (2)
 The transfer of goods happens in time
 The contract of delivery has terms,
 e.g., forthwith, as soon as possible directly,
immediately, reasonable time,Depending on
your order you get the supply of cement: as
you have a particular schedule that is agreed
upon.

 5. Goods in the possession of the third party
– Sec 36 (3) - Sometimes, at the time of sale,
the goods are in the possession of a third
person.
 In such cases, the effective delivery takes
place only when such a person acknowledges
to the buyer, that he holds the goods on his
(buyer’s) behalf.

 6. Cost of delivery of goods – Sec 36 (5) -
Seller pays till it is made deliverable; buyer
pays for obtaining delivery unless there is a
specific agreement about delivery.
 Example: Your company forwards coal as an
export with the agreement of FOB, that is,
you pay until it is put on board; it implies
that the buyer will pay for rest .

 7. Delivery of wrong quantity – Sec 34 - Seller is
liable to deliver agreed quantity. Wrong quantity
is of three kinds:
 i)Short delivery: quantity delivered less than
what is agreed.Example: Short delivery is when
you get 50 bags of cement instead of 100.
 ii) Excess delivery: the delivered quantity is
more than ordered .Example: Excess delivery is
when you get 120 bags of cement while your
order is just for 100.
 iii) Delivery of mixed goods: apart from the
goods of contracted description other types too
are included in the delivery. Example: Mixed
delivery is when along with your order for
conventional cement of 100 bags, you get also
white cement.

 8. Delivery of goods by instalments – Sec 38 -
Delivery of goods by instalments is not
considered as a proper delivery and the
buyer is not bound to accept the goods
delivered to him by instalments unless
otherwise agreed.
 The pattern of delivery shall be determined
by the contract.

 9. Delivery to carrier or wharfinger – Sec 39 -
The seller is authorised or obliged as per the
contract to deliver goods to the carrier—
surface, sea, or air transporter; there may
also exist a third person -wharfinger, for the
safe custody goods.
 Example: Your iron ore is loaded on board of
a sea carrier by the seller and is also insured
for its safety.

 1. To have delivery of the goods as per contract.
(Sec. 31 & 32)
 2. To reject the goods when they are not of the
description, quality or quantity as specified in
the contract (Sec 37).
 3. To repudiate the contract when goods are
delivered in installments without any agreement
to that effects [ Sec. 38 (1)]
 4. To be informed by the seller, when the goods
are to be sent by sea route, so that he may
arrange for their insurance [Sec 39 (30)]
 5. To have a reasonable opportunity to examine
the goods for ascertaining whether they are in
conformity with the contract. (Sec. 41)

 6. To sue the seller for recovery of the price, if
already paid, when the seller fails to deliver the
goods.
 7. To sue the seller for damages if the seller
wrongfully neglects or refuses to deliver the
gods to the buyer ( Sec 57)
 8. To sue the seller for specific performance 9.
To sue the seller for damages for breach of a
warranty or for breach of a condition treated as
breach of a warranty ( Sec 59)
 10. To sue the seller the damages for
anticipatory breach of contract ( Sec 60)
 11. To sue the seller for interest where there is a
breach of contract on the part of the seller and
price has to be refunded to the buyer ( Sec 61)

 1. To accept the delivery of goods, when the
seller is willing to make the delivery as per
the contract.
 2. To pay the price in exchange for
possession of the goods.
 3. To apply for delivery of the goods.
 4. To demand delivery of the goods at a
reasonable hour .
 5. To accept delivery of the goods in
installments and pay for them, in accordance
with the contract

 6. To bear the risk of deterioration in the
course of transit, when the goods are to be
delivered at a place other than where they
are sold .
 7. To inform the seller in case the buyer
refuses to accept or rejects the goods .
 8. To take the delivery of the goods within a
reasonable time after the seller tenders the
delivery .
 9. To pay the price, where the property in
the goods are passed to the buyer, in
accordance with the terms of the contract.
 10. To pay damages for non-acceptance of
goods.

 1. To reserve the right of disposal of the
goods until certain conditions are fulfilled.
 2. To assume that the buyer has accepted
the goods ,
 3. To deliver the goods only when applied for
by the buyer
 A) Conveys his acceptance;
 B) Does an act adopting the sale; or
 C) Retains the goods without giving a notice
of rejection, beyond a specified date (or
reasonable time), in a sale on approval.

 4. To make delivery of the goods in instalments,
when so agreed
 5. To exercise lien and retain possession of the
goods, until payment of the price
 6. To stop the goods in transit and resume
possession of the goods, until payment of the
price
 7. To resell the goods under certain
circumstances
 8. To withhold delivery of the goods when the
property in the goods has not passed to the
buyer.
 9. To sue the buyer for price when the property
in the goods has passed to the buyer or when the
price is payment on a certain day, in terms of
the contract, and the buyer fails to make the
payment .

 1. To make the arrangement for transfer of
property in the goods to the buyer.
 2. To ascertain and appropriate the goods to
the contract of sale
 3. To pass an absolute and effective title to
the goods, to the buyer.
 4. To deliver the goods in accordance with
the terms of the contract .
 5. To ensure that the goods supplied conform
to the implied / express conditions and
warranties.

 6. To put the goods in a deliverable state and to
deliver the goods as and when applied for by the
buyer .
 7. To deliver the goods within the time specified
in the contract or within a reasonable time and a
reasonable hour.
 8. To bear all expenses of and incidental to
making a delivery ( i.e. up to the stage of
putting the goods into a deliverable sate .
 9. To deliver the goods in the agreed quantity.
10. To deliver the goods in instalments only when
so desired by the buyer.
 11. To arrange for insurance of the goods while
they are in transmission or custody of the
carrier.
 12. To arrange for insurance of the goods while
they are in transmission or custody of the
carrier.

 According to sec 45(1) of Sale of Goods Act,
seller of the goods is deemed to be unpaid seller
: (A) When whole of the price has not been
tendered or paid, or (B) When bill of exchange or
negotiable instrument has been received as a
conditional payment. AND the seller of goods can
be deemed to be an unpaid seller:
 1.if the price become due but they are not paid.
He must have an immediate right of action for
the price.
 2.A Bill of Exchange or negotiable instrument
was received but was dishonoured.

 I .Rights against the goods: can be discussed
under two heads:
 a. When property in goods has passed
 b. When property in goods has not passed
1.When property in goods has passed :The
following 3 rights are available

 a).Right of lien : is the right to retain the
goods until whole of the price of goods is
paid or tendered. Right of lien can be
exercised: where goods have been sold
without any stipulation to credit. Where
goods have been sold on credit but period of
credit has expired. Where buyer has become
insolvent, even though the period of credit
has not yet expired

 b). Right of stoppage in transit: is a right of
stopping the goods in transit after the unpaid
seller has parted with the goods. If the goods
are in transit he has a right to resume the
possession of goods as long as they are in the
course of transit .this right is available to the
unpaid seller only when the buyer become
insolvent and when the goods are in transit

 c).Right of Resale: unpaid seller can resell
the goods if the goods are of perishable
nature if seller give the notice to buyer of his
intention to resell and the buyer does not
pay within the reasonable time if on resale
there is loss to seller he can recover from the
buyer and if profit must handover to the
buyer

 1.Suit for Prices: Where property has passed,
the seller can sue for the price
 2.Suit for damages for non acceptance:
Where The buyer wrongfully refuse to accept
and pay for goods, seller may sue him for
non acceptance

 3.Repudiation of the contract before due
date by buyer: the seller can treat the
contract as subsisting and wait till delivery or
he may treat the contract as rescinded and
sue for damages 4. Suit for interest: where
there is a specific agreement between seller
and buyer as to interest on the price of the
goods from the date the payment become
due ,seller can recover the interest from the
buyer.

Quasi contract.pptx

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