Contingent & Quasi Contracts

Contingent Contracts •

A contingent contract is a promise - to do or not to do something - on the happening or not or not happening of - a future uncertain event - which is collateral to the contract. contract.

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In other words: - the promise must depend on a contingency,, and contingency - the contingency must be collateral to the contract.

Contingent Contracts - 2

„Collateral‟ means - something that is connected to the contract - but, it is not the principal promise in the contract. Collateral event must be something that is not the consideration for the promisor‟s promise. Example: A promises to pay money to B, if B‟s stocks in the go-down are destroyed by fire. Here, the event „destruction by fire‟ is a chance by accident. It is - „not the consideration given by B‟ - „nor the performance expected by A‟.

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Hence this is an example of a contingent contract.

Contingent Contracts - 3 •

A promise that depends upon a contingent event in a contract can be enforced - after the future uncertain event - has happened or - has not happened or - has become impossible to happen depending upon the circumstances of each situation and case. [Sections 32 to 36 deal with such situations]

Let us assume some of such situations and decide.

Some contingent contracts 1. Happening of an event [Sec –32]: A agrees to buy a property from B, after B inherits such property from his father.  – B survives his father  – B dies before his father. 2. Non-happening of an event [Sec –33]: A promises to pay money to B, if B‟s ship does not return from voyage.  – the ship returns from the sea  – the ship sinks at sea

Some contingent contracts-2

3. Promise depends on the act of a third Party [Sec-34]

S sell goods to B and B promises to pay the price after C has fixed it. - C fixes the price - C refuses to fix the price - C dies before fixing the price. 4. Promise depends on the - happening or - non-happening of an event within a stated period of time [Sec-35]

Some contingent contracts-3 •

Happening within a stated period of time: B promises to buy the whole of the consignment of rice on board & pay money to A, if A‟s ship returns from voyage by 31st Dec. - A‟s ship returns on 30th of Dec - A‟s ship returns on 10th Jan - A‟s ship sinks at sea on 20th Dec.

Some contingent contracts-4 •

Non-happening within a stated period of time: P promises to pay A, if A‟s ship does not return from voyage by 31st Dec. - A‟s ship returns on 30th Dec. - A‟s ship returns on 10th Jan. - A‟s ship sinks at sea on 20th Dec.

5. Promise depends on an impossible event: A promises to pay money to B, when living beings from Mars come and settle on earth. It is impossible event, hence Void.

Quasi-Contracts  Even

when there is no contract between persons, a court may find a q u a s i - c o n t r a c t   to compensate a plaintiff   who can show that:

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He gave some benefit to the defendant. He reasonably expected to be paid for the benefit and the defendant knew this; and The defendant would be unjustly enriched if he/she did not pay.

Quasi Contracts - 2 

Some instances where we can notice certain relations resembling those created by contract.

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Necessaries supplied to a person incapable of contracting [Sec-68]

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Reimbursement of money to the person who paid dues of other, because in payment of which he is interested [Sec-69]

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Obligation of person enjoying benefit of nongratuitous act. [Sec-70]

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Responsibility of finder of goods. [Sec-71]

Quasi Contracts - 3 

Liability of person to whom - money is paid or goods delivered - by mistake or under coercion. [Sec-72]

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The distinction between „quasi-contracts‟ and „unilateral contracts‟ is that

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In unilateral contract, one party makes a promise and the other party can accept only by doing something.

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In quasi-contracts, law attributes contractual relations between parties, though no promise and no acceptance.

Quantum meruit Q u an t u m m er u i t : 

is the  Name given to an action – distinct from that arising out of the original contract.   It is based upon a new contract originating in the conduct of the parties.  It means that the complainant gets “as much as he deserved.”  This phrase is used when part performance relates to services of an individual; whereas Q u a n t u m v a leb e n t :  is used in cases where there is part delivery of goods.