The various types of Quasi contracts are as follows:
1.Supply of necessities:
According to section 68 of the contract act, if a person who is
incapable to enter into a contract(minor or lunatic) or someone whom
he is legally bound to support is supported by another in providing
necessaries that are suited in his conditions of life, is entitled to be
reimbursed from the property of such incapable person.
Here the following points must be noted that
the personn who is being supplied with necessaries is incapable of
entering into a contract. It means he is either minor or lunatic.
the person who is supplying has supplied him or someone
whom he is legally bound to support with necessities of life.
he must not be provided with luxuries but only necessities of
life.
the supplier is entitled to only a reasonable amount from the
supplied person's property,not the actual amount.
the supplied person is not liable, the price of goods supplied can
be recovered from his property only
it is mandatory that the supplied person did not have such
necessaries before and he was in need of those supplied to him.
Example: Usman is a lunatic, he has three children, all of them are
supported by Ali in their basic needs of life such as food and school for
one year, in this case Usman is liable to reimburse this amount to Ali and
Ali can recover a reasonable amount from Usman's property.
2.Payment by interested person:
According to section 69 A person who is interested in payment of
money whom another person is bound by law to pay and therefore
pays it, such person is entitled to be reimbursed that money in later
times.
Such person makes the payment to secure his own interest and later on
receives his money back also. Following points must be noted:
The person is interested in payment to protect his own benefit and
interest
He himself is not bound to pay
Another person is bound to pay
Payment is made to another person
Example: i have a house in which Hassan is living on rent. There is some
sort of leakage in the water tank, he repairs it and it costs him rs 2000. he
did this repair for his own interest but as i am the owner of the house and
i am legally bound to pay the sum, i have to pay him the sum of rs 2000
which he has paid
3.compensation for non gratuitous act:
according to section 70 0f the contract act, where a person lawfully
does anything for another or delivers him anything, not intending to
do so gratuitously, and the other person enjoys benefit of his act or
thing delivered. The person who has taken benefit is bound to
compensate in respect of or to restore the act done or thing delivered.
Gratuitous means with an intention of taking no return of the act done,
but here the act done is ungratuitously .But
the act done mustbe lawful
it is done by person who is not interested to act gratuitously.
The other person enjoys benefit of act done or thing
delivered.
Example: Shah is a an electrician and he repaired the street lights
ungratuitously and obviously the people received the benefit of his act, he
is entitled to get compensation from the concerned authority
Ali delivered food to Khan with a gratuitous intention i.e without an
intention of getting reward. Khan is not bound to compenste Ali for the
delivery.
4.Finder of goods.
According to section 71 of the contract act, when a person finds goods
belonging to another person and takes them into his own custody, he is
subject to same responsibility as a "bailee". He is bound to take as
much care of the goods as a man of ordinary prudence would.
Following are the duties of such person
He must take necessary measures to find owner of goods
He must take care of the goods and
He must not use them for his own purpose.
He must return to the true owner .
In such circumstances, the finder has some rights aPrinciple of
Quasi contract.
Quasi contract is based upon the principle of Unjust enrichment that was
given by Lord Mansfield . According to this principle, a person shall
not enrich himself unjustly at the expense of another person.
Example: Hina with her mother went to a garments shop where she
bought a dress worth Rs5000, at that they time they had only Rs2000 in
their purse. They paid the shopkeeper Rs 2000 and promised to return the
remaining 3000 in the evening. The shopkeeper agreed. In evening Heena
went to the shop and paid him the sum of Rs 3000. the next day her
mother also went to the shop unaware of the fact that her daughter has
paid the money, she also paid him 3000 rupees. The shopkeeper took that
too. The mother paid that sum in ignorance and the shopkeeper enriched
himself unjustly with that extra sum of 3000. he is liable to pay the sum
of 3000 back to Heena's mother.
Types of Quasi Contracts.
The various types of Quasi contracts are as follows:
1.Supply of necessities:
According to section 68 of the contract act, if a person who is
incapable to enter into a contract(minor or lunatic) or someone whom
he is legally bound to support is supported by another person in
providing necessaries that are suited in his conditions of life, is
entitled to be reimbursed from the property of such incapable person.
Here the following points must be noted that
the personn who is being supplied with necessaries is incapable of
entering into a contract. It means he is either minor or lunatic.
the person who is supplying has supplied him or someone
whom he is legally bound to support with necessities of life.
he must not be provided with luxuries but only necessities of
life.
the supplier is entitled to only a reasonable amount from the
supplied person's property,not the actual amount.
the supplied person is not liable, the price of goods supplied can
be recovered from his property only
it is mandatory that the supplied person did not have such
necessaries before and he was in need of those supplied to him.
Example: Usman is a lunatic, he has three children, all of them are
supported by Ali in their basic needs of life such as food and school for
one year, in this case Usman is liable to reimburse this amount to Ali and
Ali can recover a reasonable amount from Usman's property.
2.Payment by interested person:
According to section 69 A person who is interested in payment of
money whom another person is bound by law to pay and therefore
pays it, such person is entitled to be reimbursed that money in later
times.
Such person makes the payment to secure his own interest and later on
receives his money back also. Following points must be noted:
The person is interested in payment to protect his own benefit and
interest
He himself is not bound to pay
Another person is bound to pay
Payment is made to another person
Example: i have a house in which Hassan is living on rent. There is some
sort of leakage in the water tank, he repairs it and it costs him rs 2000. he
did this repair for his own interest but as i am the owner of the house and
i am legally bound to pay the sum, i have to pay him the sum of rs 2000
which he has paid
3.compensation for non gratuitous act:
according to section 70 0f the contract act, where a person lawfully
does anything for another or delivers him anything, not intending to
do so gratuitously, and the other person enjoys benefit of his act or
thing delivered. The person who has taken benefit is bound to
compensate in respect of or to restore the act done or thing delivered.
Gratuitous means with an intention of taking no return of the act done,
but here the act done is ungratuitously .But
the act done mustbe lawful
it is done by person who is not interested to act gratuitously.
The other person enjoys benefit of act done or thing
delivered.
Example: Shah is a an electrician and he repaired the street lights
ungratuitously and obviously the people received the benefit of his act, he
is entitled to get compensation from the concerned authority
Ali delivered food to Khan with a gratuitous intention i.e without an
intention of getting reward. Khan is not bound to compenste Ali for the
delivery.
4.Finder of goods.
According to section 71 of the contract act, when a person finds goods
belonging to another person and takes them into his own custody, he is
subject to same responsibility as a "bailee". He is bound to take as
much care of the goods as a man of ordinary prudence would.
Following are the duties of such person
He must take necessary measures to find owner of goods
He must take care of the goods and
He must not use them for his own purpose.
He must return to the true owner .
In such circumstances, the finder has some rightlso. Such as,
He can retain goods against any person except the true owner.
He can ask the owner for all expenses which incurred in taking
care of the goods or finding the owner
He can retain goods until owner pays expenses
He can sue owner for award of compensation which the owner
promised.
He can retain the goods unless rewarded
He can sue anyone who deprives him from the possession of
goods
However there are some situations where a finder can sell the goods
.Following are the conditions.
If the goods are perishable, he can either use it or sell it. For
example Mr.Khan went to a flower shop and left his bag of
fruits there. the flower vendor had no refrigerator to put the
fruits.he can sell those fruits.
If Expenses of finder values 2/3rd of actual value, he can either
sell the goods or use them for his own purpose. For example the
fruits that Mr.Khan left at the flowers shop were of 150 rupees
and the flower vendor spent more than 100 on finding Mr.Khan
in this situation the flower vendor can sell them .
When owner could not be found by reasonable diligence. For
example, the flower vendor tried his best to find Mr.Khan but
could not find him. in this situation the flower vendor can sell
the fruits.
When the finder of goods spends money on its possession or for
its safe custody and the owner refuses to reimburse the money
spent on the good by the finder , then the finder has the right to
sell it.
For example. The fruits which Mr.Khan left at the flowers vendor,
the vendor did not have a refrigerator. He bought ice to keep the
fruits from drying. The next morning Mr.Khan came and asked for
his fruits. Vendor asked him for the compensation of amount he
spent while taking care of fruits. Khan refused to pay, vendor has
the right to retain goods and sell them.
5.Money paid or thing delivered under mistake or
coercion.
According to section 72 of the Contract act, when money is paid to a
person or something is delivered under under mistake or coercion
.such person must repay it to the person who made it.
Example: i transferred money to someone mistakenly through
easypaisa app, he is legally bound to pay back that sum.
Remedies for breach of contract:
When a breach of contract occurs, the aggrieved party has some options
available to him. The following remedies are available to the aggrieved
party.
1. recission of the contract
2. suit for damages
3. suit for specific performance
4. suit for injunction
5. suit upon quantum meruit
1. recission of the contract:
Recission means cancellation. When a party to contract fails to or
refuses to perform his part of obligations, the other party isrelesed
from their obligations under the contract and has the option to rescind
the contract. The aggrieved party also has the option to sue the
defaulting party under section 75 of contract act and claim damages. If
this option is choosen, the aggrieved party has to file a suit in the court
for recission of the contract . if the court grants the permission of
recission, the contract is cancelled ,the aggrieved party may no longer
fulfill their obligations and the aggrieved party has now the option to
claim damages for the losses they suffered due to the breach of
contract.
Example: farman promises to deliver syed 200 pairs of shoes at the
price of 1000 each on 2 june. Syed promises to pay as soon as he
receives the shoes. Farman fails to deliver shoes on due date. Syed is
released from his obligations and syed can file a suit for recission and
ask for damages.
Note: according to section 64 if the aggrieved party treats the contract
as rescinded, he has to return any benefits if he has received.
2. suit for damages:
the aggrieved party may sue for damages in case of breach of contract.
Damages are the monetary compensation allowed to aggrieved party
in respect of loss suffered by it. The damages depend on the amount of
loss incurred due to breach of contract. The parties who have made an
agreement can settle the amount of damages themselves when such a
breach occurs. Sometimes conflicts arise and price settlement is
difficult between the two parties. In this case the court makes an
assessment of the losses and damages have to be paid to the aggrieved
party based on this assessment. Section 73 lays down the different
types of damages that an aggrieved party can claim. These are the
following:
General or ordinary damages
Special damages
Exemplary damages
Nominal damages
Liquidated damages
1. General or Ordinary Damages
General or ordinary damages arise out of breach in the usual course of
the non performance of the contract. The aggrieve party has the right
to claim damages for the natural or direct losses due to breach of the
contract. General losses do not have any provision for damages in case
of indirect and remote losses.
Example:
A promised B to deliver some products. But did not tell him that the
breach of contract will cause him special damage. A committed
Breach of contract . B sued him and B was awarded general damages
and not liable for loss of profits.
2. Special Damages
Compensation for special losses is called special damages.
Compensation is recovered only in special circumstances and if it is
brought to the notice of the defaulting party. When a party claims
special damages it has to prove that the other party to the contract,
knew, at the time of making the contract, that there would be a loss in
special circumstances, in case of breach of contract. If special
damages are proved as a result of breach of contract and it is
communicated to the other parties then special damages will be
awarded.
Example:
A invited a singer to sing at his son's wedding party and gave him
advance of 10.000 and told him that if he fails to perform his romise A
will suffer special loss. The singer commited breach of contract and
was held liable to special damages
3. Exemplary Damages
Exemplary damages are also called vindictive damages. They are
awarded by the court if a party has suffered mentally or emotionally
due to breach of the contract. The court makes an exception to the
general principle that damages should be awarded only for financial
loss due to the breach of contract. The law finds it difficult to
compensate for mental pressure or suffering or humiliation of the
aggrieved party due to the breach of the contract. It usually
compensates for financial losses. In exceptional cases it awards
exemplary damages.
There are two important matters in which the court awards exemplary
damages. These are the following:
Breach of promise to marry another person:
If there is a breach of contract to marry another person although a
promise has been made, the aggrieved party can claim damages from
the person who has broken the promise.
Unjustified refusal of a banker to honour a cheque of
another person:
Sometimes a bank refuses to honour a cheque even though the account
holder has sufficient funds in his/her account. This causes loss of
reputation to the account holder. The aggrieved party can claim
damages from the bank. The smaller the amount that is dishonoured
the greater would be the damages.
Example :
A person applied for travel loan. Bank promised to credit his account.
Later when he tried to withdraw money from bank account, he found
that the bank had not credited his account. In this case exemplary
damages were allowed to him
4. Nominal Damages
Nominal damages are awarded when in a breach of contract the
aggrieved party does not have any losses due to the breach. The courts
however treat this seriously so that such types of breach are not made
by the parties. Therefore, they award a small token as compensation to
take note of the offence made by the guilty party. A small
compensation may be charged so that the guilty party recognizes its
mistake.
Example: shahkar promises umer to sell jaggery t rate of 200 per bag.
Shahkar does not supply umer jaggery. At the time of breach, the market
rates were the same. Umer is entitled to nominal damages only
Jasee promised mujo to buy his car. But later rfused. Mujo sold it to
musawir and suffered no loss. Mujo then sued jasee for loss of profit.
Held that mujo is entitled to nominal damages only.
Liquidated damages:
When the sum of money is mentioned in the contract that if a party
breaches thecontract, they will be liable to pay that specificsum of money
and not more .
Example:
A promised B to deliver 20 cars for servicing purpose. If he fails he shall
pay 20.000 as damages. In case of breach of contract, he had to pay
20,000 as damages.
Suit for Specific Performance
The court can use its discretion when it is essential to order the party that
has made a breach of a contract to perform what was intended to be done
in the contract between the parties. The Law usually does not insist upon
performance of the contract that a party has refused to complete even
though the aggrieved party demands justice. The reason for this is that the
court considers compensation as damages to be the right measure for the
aggrieved party. However, in some specific cases, courts may order the
guilty party to complete the contract entered into between the parties.
When court orders specific performance:
In the following cases the court can grant relief and direct the guilty
party in terms of specific performance of the contract:
Where there is no standard for quantifying the actual damages that
are caused to the aggrieved party by non-performance of the
contract.
Where the monetary compensation is not an adequate measure of
the loss of the aggrieved party. In cases of contracts entered into
for sale of immovable property or special rare antique pieces or
certain items which mean a lot to the aggrieved party and which
cannot be replaced.
Where a property of the aggrieved party is held by his agent or
trustee and the act is to be done to perform a trust function.
Where courts will not allow specific performance:
The courts will not allow relief for specific performance in the following
cases.
When the court considers monetary compensation to be adequate
for breach of contract.
When contracts are made by trustees or agents who have violated
their powers and breach of contract occurs.
In contracts of a personal nature, especially in the case of a contract
to marry or a contract to stage a show
In cases where the courts cannot supervise the performance of the
contract because it involves continuous duty to complete the
contract.
In cases when the court is of the opinion that enforcement of
specific performance is not possible due to the intricacies of the
terms of the contract.
Example: A agrees to buy and B agrees to sell a picture by a dead painter and two
rare China vases. A may compel B specifically to perform the contract for there is no
standard ascertaining the actual damages which would be caused by its non-
performance
A, a singer, contract with B, the manager of a theatre, it sing at his theatre for one
year, and to abstain from singing at other theatre during this period. She absents
herself. B cannot compel A to sing at his theatre, but he may sue her for an
injunction restraining her from singing at other theatres.
Suit for Injunction
Injunction is an order of the court where a person is prohibited to do a
specific act or action. Sometimes a party to the contract does some action
which he has promised that he would not do; the court has the right to
issue an order to prohibit him from doing it. This action is taken by the
court when a party is guilty of breach of some negative term in the
contract. Injunction is therefore a negative order of the court that stops a
party from some action. It is in other words a preventive relief to a party
at the discretion of the court. To give an injunction there are certain
requirements of the court. These are the following:
The contract between the parties should consist of two parts. One
agreement should be affirmative and the other should be negative
in nature.
The negative part of the agreement should be separate from the
positive aspect.
The person applying for injunction should not have failed in
completing the contract.
Examples: Ali contracted with Saleem that he will not build a house on
his land, but he started construction. Court granted injuction against Ali
and made him to stop the work.
A singer promised to sing at Mujahid's place and nowhere else, but
started singing at Jasaleeq's place too. Mujahid sued her and court
stopped her from singing at other places.
Suit upon quantum meruit
The term quantum meruit means payment in proportion to the work done
or reasonable value of work done. When a person has done some work
under a contract and the other party cancels the contract or an event
happens which is makes the performance of contract impossible, such
party can claim remuneration for work done already. The right to claim
for quantum meruit arises when the original contract isdischarged. The
aggrieved party may sue for quantum meruit in the following cases
When an agreement becomes subsequently void
When there is a promise to give services but no agreement about
reward
When something is done ungratuitously
When contract is divisible
When the completion of contract is preveted by other party
When a divisible work is performed badly
Example: ibrahim hired Shabir for construction of a seven storey house,
when four storey were built, ibrahim stopped shbir from work. Shabir can
get compensation for work done
Craven Ellis was employed as managing director in a company. After
three months it was found that the directors were not authorized to
appoint him. Craven sued for remuneration. Held craven could recover
for work done (craven ellis vs canon ltd)
