Assignment

On

Quasi Contract

Bilvam Tarakbhai Desai

Roll no.-14

Sem-3(GIA)

Group:-Marketing

Batch:-2016-2018

M.B.A

2017-2018

Subject

Business Environment Law

Guided By

Dr. Ami Pandya

Department of Business Administration

Maharaja Krishnakumarsihnji Bhavnagar University

Bhavnagar

Signature_______________

Date: /08 /2017

Contract

an agreement with specific terms between two or more persons or entities in which there is a promi
se to do somethingin return for a valuable benefit known as consideration.

Acceptance

An acceptance of an offer may be made expressly or implied by conduct. (b) An

acceptance must be unqualified and unconditional. (c) Where the offer or prescribes the manner in
which the acceptance shall be made, the acceptance must be made in that manner. Where the
manner or acceptance is not prescribed, the acceptance must be made in the usual or in a
reasonable manner.

Offer

An offer mentioned in section 5 above must not be vague or uncertain. It must have been
made with the serious intention of creating legally binding obligations. (b) An invitation to treat shall
not constitute an offer. (c) An offer may be made to a particular person or group or to the
community at large.

Agreement

As already mentioned, to constitute a contract there must be an agreement. An

agreement is composed of two elements—offer and acceptance. The party making the offer is
known as the offer or, the party to whom the offer is made is known as the offeree. Thus, there are
essentially to be two parties to an agreement.

Proposal

the act of offering or suggesting something for acceptance, adoption, orperformance.

What Is Quasi Contract?

 Quasi’ means ‘almost’ or ‘apparently but not really’ or ‘as if it were’

 A quasi contract is a contract that exists by order of a court, not by agreement of the parties
 Courts create quasi contracts to avoid the unjust enrichment of a party in a dispute over
payment for a good or service
 Sections 68 to 72 deals with "certain relations resembling those created by contract" under
Indian contract act, 1872.

Illustration
 A victim slips on a banana leaf and falls down a flight stairs
 Doctor a stranger who happened to be walking by , administers emergency treatment to
unconscious victim
 Doctor does not enter into a contract with victim
 Doctor could now recover fee for her services on the theory of unjust enrichment
 This is where “Quasi-contract” come into play. The court in this case creates a fictional
contract to grant benefits to the doctor
Sections In Law
The sections in law which cover the Quasi Contracts are

 Supply of necessaries (section 68)

 Payment of lawful dues by interested person (section 69)
 Person enjoying benefit of a gratuitous act (section 70)
 Finder of goods (section 71)
 Goods or anything delivered by mistake or coercion (section 72)

Section 68
“Claim for supply of necessaries to person incapable of contracting”
Necessaries:

 Things suited to the conditions of incompetent parties

 Includes articles required to maintain a particular person in the state and degree in the life in
which he is
 Articles without which an individual cannot reasonable exist.

Illustration
 A supplies B, lunatic with necessaries suitable to his condition of life. is entitled to be
reimbursed from B’s property
 A minor studying at Cambridge was supplied with clothing, including eleven waist-wats. He
already had sufficient clothing with him. It was held that the waist-wats were not necessary
articles and so he was not liable to pay for them.

Section 69

“Reimbursement of money paid, in which he is interested”

Essentials:
 There must be a person who is bound to make a payment by law. The person paying must
himself not be bound to pay. When he is jointly liable to pay, payment by him would not give
him the right to recover under this section
 There must be another person interested, not bound by law, in such payment being made
and interest should exist at the time of payment.
 The payment must be made bonafide for the protection of one’s own interest
Illustration
A and B have been fined jointly Rs500 for selling adulterated ghee. A alone pays the amount of fine
in good faith, A cannot later claim contribution from B under Section 69. Notice that although B was
bound by law to pay and A has paid B’s share in good faith, yet A cannot recover as he himself was
bound to make the payment, being jointly liable with B and was not simply interested in making the
payment.

Section 70

“Obligation of a person enjoying benefits of non-gratuitous act”

 Person lawfully does anything for another person
 Delivers anything to him non-gratuitously
  Latter is bound to make compensation or restore the thing so done or delivered
 The thing must be done lawfully
 The person for whom the act is done must enjoy the benefit of it.
Illustration
 A, a tradesman, leaves goods at B’s house by mistake. B treats the goods his own. He is
bound to pay 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.

Section 71 - Responsibility of finder of goods

“A person who finds goods belonging to another and takes them into his custody, is subject to the
same responsibility as a bailee. The finder’s position, therefore, has been considered along
with bailment”

1. Duties of Finder of Goods:

 He must try to find out “the real owner” of the goods and must not appropriate the
property to his own use ( Section 403 IPC )
 He must take as much care of the goods as much a man of ordinary prudence would
take of his own goods of same bulk, quality and value. (Sec 151 )

2. Rights of finder of Goods:

 He is entitled to the possession of the goods till the true owner is found.
( Case : Hollins vs FowlerS)
 He is entitled to retain this good until he receives the lawful charges or
compensation for retaining the goods and for care and preservation thereof.
However, he cant sue for such compensation unless a specified reward has been
advertised by the owner.
 He can sell the goods if:
 The commodity is perishable
 The owner cannot be found
 Owner refuses to pay the lawful charges
rd
 Lawful charges amount to 2/3 of the value of commodity found
Illustration
 H picked up a diamond on the floor of F’s shop and handed it over to F to keep it till the
owner appeared
 True owner could not be searched
 After the lapse of some weeks, H tendered to F the lawful expenses incurred by him for
finding the true owner and an indemnity bond and requested him to return the diamond to
him (i.e., H). F refused to do so
 F must return the diamond to H as he was entitled to retain the goods as against everybody
except the true owner (Hollins Vs FowlerS)

Section 72 - delivered by mistake or coercion

“Liability of person to whom money is paid, or thing delivered by mistake or under coercion”

What does it mean…

A person to whom money has been paid, or anything delivered by mistake or under

Illustration
  A and B jointly owe Rs. 1,000 to C. A alone pays the amount to C and B not knowing this fact,
pays Rs. 1,000 over again to C. C is bound to repay the amount to B.
 A railway company refuses to deliver certain goods to the consignee except upon the
payment of an illegal charge for carriage. The consignee pays the sum charged in order to
obtain the goods. He is entitled to recover so much of the charge as was illegally excessive.

Difference between Contract and Quasi Contract

Contract Quasi Contract

Contracts results from the will of the parties  Quasi Contract is not a contract at all but
expressed with a view to create an obligation merely a legal fiction.
 It cannot be used when full-fledged
contract exists

Contract is an agreement There is no agreement

It has certain essential elements Essentials for formation of a contract are absent

It is a full fledged contract and is binding It is not a full fledged contract