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Quasi contract.pptx

  1.  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.
  2.  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.
  3.  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.
  4. 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.
  5.  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)
  6.  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.
  7.  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.
  8.  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.
  9.  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.
  10.  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.
  11.  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.
  12.  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.
  13. 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
  14. ⚫ 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
  15.  A breach of contract occurs if any party refuses or fails to perform his part of the contract. 15
  16. Breach Anticipatory Breach Actual Breach 16
  17. 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. 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
  19. • 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
  20. ⚫ 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
  22. ⚫ 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
  23. 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
  24. 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
  26. ⚫ 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
  27.  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
  28. 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
  29.  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
  30.  When something has been done without any intention to do so gratuitously  Where one party refuses to perform the contract
  31. 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 .
  32. ⚫ 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
  33. ⚫ 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
  34. ⚫ 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
  35. 35
  36.  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.
  37.  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.
  38.  Seller: Delivers goods and receives consideration.  Buyer: Accepts and pays for the goods.  Terms: Contract can have terms of delivery and payment.
  39.  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.
  40. 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.
  41.  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.
  42.  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.
  43.  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)
  44.  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.
  45.  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.
  46.  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 .
  47.  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.
  48.  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.
  49.  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.
  50.  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)
  51.  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)
  52.  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
  53.  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.
  54.  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.
  55.  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 .
  56.  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.
  57.  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.
  58.  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.
  59.  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
  60.  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
  61.  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
  62.  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
  63.  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
  64.  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.