SUBJECT-LAW OF CONTRACT-I

MODULE-9: CONTINGENT CONTRACTS & QUASI CONTRACTS

THIS STUDY MATERIAL IS PREPARED

[for the use of students] BY:

Dr. PRADIP KUMAR DAS

Associate Professor
DEPARTMENT OF LAW AND GOVERNANCE,
SCHOOL OF LAW AND GOVERNANCE
CENTRAL UNIVERSITY OF SOUTH BIHAR
GAYA,
BIHAR
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MODULE-9: CONTINGENT CONTRACTS & QUASI CONTRACTS
Definition:
A contingent contract is a contract to do or not to do something, if some event,
collateral to such contract, does or does not happen.[Section 31]
Example: A contracts to pay B Rs.10,000/- if B’s house is burnt. This is a contingent
contract.
A contingent contract contains a conditional promise. A promise is absolute or
unconditional when the promisor undertakes to perform it in any event. A promise is
conditional when performance is due only if an event, collateral to the contract,
does or does not happen. Collateral means subordinate but from same source,
connected but aside from main line.
Characteristics of contingent contract:
(a). The performance of such contracts depends on a contingency, i.e. on the
happening or non-happening of the future event.
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(b).In a contingent contract, the event must be collateral i.e. incidental to the
contract.
(c). The contingency is uncertain. If the contingency is bound to happen, the
contract is due to be performed in any case and is not therefore a contingent
contract.
Rules regarding contingent contract:
(a). The happening of the future uncertain event-
Contracts contingent upon the happening of a future uncertain event, cannot be
enforced by law unless and until that event has happened. If the event becomes
impossible, such contracts become void.[Section 32]
Example: A makes a contract with B to buy B’s horse if A survives C. This contract
cannot be enforced by law unless and until C dies in A’s lifetime.
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MODULE-9: CONTINGENT CONTRACTS & QUASI CONTRACTS
(b). The non-happening of an uncertain future event-
Contracts contingent upon the non-happening of an uncertain future event, can be
enforced when the happening of that event becomes impossible, and not
before.[Sec-33]
Example-A agrees to pay B a sum of money if a certain ship does not return. The
ship is sunk. The contract can be enforced when the ship sinks.
(c).When event to be deemed impossible-
If a contract is contingent upon how a person will act at an unspecified time, the
event shall be considered to become impossible when such person does anything
which renders it impossible that he should so act within any definite time, or
otherwise than under further contingencies.[Section 34]
Example: A agrees to pay B a sum of money if B marries C. C marries D. The
marriage of B to C must now be considered impossible although it is possible that D
may die and that C may afterwards marry B.
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MODULE-9: CONTINGENT CONTRACTS & QUASI CONTRACTS
(d). The happening of an event within a fixed time;
Contracts contingent upon the non-happening of an event within a fixed time may
be enforced by law when the time fixed has expired and such event has not
happened, or before the time fixed has expired, if it becomes certain that such event
will not happen.[Section 35].
Example: A promises to pay B a sum of money if a certain ship return within a year.
The contract may be enforced if the ship return within the year, and becomes void if
the ship is burnt within the year.
(e). Impossible event-
Contingent agreements to do or not to do anything, if an impossible event happens,
are void, whether the impossibility of the event is known or not to the parties to the
agreement at the time it is made.[Section-36].
Example: A agrees to pay B Rs.5000/- if two straight lines should enclose a space.
The agreement is void.
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MODULE-9: CONTINGENT CONTRACTS & QUASI CONTRACTS
QUASI-CONTRACTS:
When one person obtains a benefit at the expense of another and the circumstances
are such that he ought, equitably, to pay for it, the law will compel payment, even
though there is no contract between the parties by which payment is promised. The
parties will be put in the same position as they would have occupied if there was a
contract between them. Such cases are called quasi-contracts because the
relationship between the parties in such cases resembles those created by contracts.
Section 68 to 72 of the Contract Act defines the cases which are to be deemed
quasi-contracts under the Indian law.
Rules:
(a). Necessaries for incapable persons-
If a person, incapable of entering into a contract, or any one whom he is legally
bound to support, is supplied by another person with necessaries suited to his
condition in life, the person who has furnished such supplies is entitled to be
reimbursed from the property of such incapable person. [Section 68]
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Example: A supplies B, a lunatic with necessaries suitable to his condition in life. A
is entitled to be reimbursed from B’s property.
This section covers the case of necessaries supplied to a minor and other incapable
persons[e.g a lunatic] and to persons whom the incapable person is bound by law to
maintain[e.g. his wife and minor children]. The things supplied must come within
the categories of necessaries.
(b). Reimbursement of interested persons-
A person who is interested in the payment of money which another is bound by law
to pay, and who therefore pays it, is entitled to be reimbursed by the other.[Section
69].
The essentials of section 69 are as below:
(i). The payment is to be given to a person interested;
(ii).The payment is for the protection of his own interest.
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(iii). The person is entitled to repayment;
(iv). The party must be bound to pay by law.
(c). Benefit of a non-gratuitous act-
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, the thing so done or delivered.[Section 70].
Example: A, a tradesman, leaves goods at B’s house by mistake. B treats the goods
as his own. He is bound to pay for them.
(d). 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[Section 71].
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(e). Delivery by mistake or under coercion-
A person to whom money has been paid, or anything delivered by mistake or under
coercion, must repay or return it.[Section-72]
Example: A and B jointly owe Rs.10,000-/ to C. A alone pays the amount to C and
B, not knowing this fact, pays Rs.10,000/- over again to C. Here, C is bound to
repay the amount to B.