SESSION 16

To be discussed

Quasi contract

Wagering agreements,

Provisions of lottery

What are not wagers?

Contingent and conditional contract

QUASI CONTRACT
The term quasi contract means resembling a contract

Even in the absence of the essential elements of contract,

certain social relationships give rise to certain specific
obligations to be performed by certain persons.
They create same obligations as in the case of regular
contract

Quasi contracts are based on principles of equity, justice and

good conscience

A quasi or constructive contract rests upon the maxims, “No

man must grow rich out of another persons loss”.
Examples
T, a tradesman, leaves goods at C’s house by mistake. C
treats the goods as his own. C is bound to pay for the
goods.

A pays some money to B by mistake. It is really due to C. B

must refund the money to A.

Your neighbor has ordered online by swiggy which got

delivered to your house. You consumed the same. You
must pay to your neighbor or swiggy, as the case may be
Salient features of quasi contracts

Such a right is always a right to money and generally,

though not always, to a liquidated sum of money.

It does not arise from any agreement of the parties

concerned, but is imposed by the law; and

It is a right which is available not against all the world, but

against a particular person or persons only, so that in this
respect it resembles a contractual right.
Cases Deemed as Quasi Contract
Claims for necessaries supplied [Section 68]
Cases Deemed as Quasi –

Payment by an interested person [Section 69]

Contracts

Obligation of a person enjoying benefit of non

gratuitous act [Section 70]

Responsibility of finder of goods [Section 71]

Money paid by mistake or under coercion [Section 72]

Claim for necessaries supplied to persons
incapable of contracting (Section 68)
• If a person, incapable of entering into a contract, or anyone
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.
• Example: A supplies B, a lunatic, or a minor, with
necessaries suitable to his condition in life. A is entitled to
be reimbursed from B’s property.
• To establish his claim, the supplier must prove not only
that the goods were supplied to the person who was minor
or a lunatic but also that they were suitable to his actual
requirements at the time of the sale and delivery.
Payment by an interested person
(Section 69)
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.

B holds land in Bengal, on a lease granted by A, the zamindar.

The revenue payable by A to the Government being in arrear, his
land is advertised for sale by the Government. Under the
revenue law, the consequence of the sale will be the annulment
of B’s lease. B, to prevent the sale and the consequent
annulment of his own lease, pays to the government the sum
due from A. A is bound to make good to B the amount so paid
Obligation of person enjoying benefits
of non-gratuitous act (Section 70):

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 pay
compensation to the former in respect of, or to
restore, the thing so done or delivered.

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
[ShyamLal vs. State of U.P. A.I.R
(1968) 130]
• ‘K’ a government servant was compulsorily retired by
the government.
• He filed a writ petition and obtained an injunction
against the order. He was reinstated and was paid
salary but was given no work
• In the mean time government went on appeal.
• The appeal was decided in favour of the government
• ‘K’ was directed to return the salary paid to him
during the period of reinstatement.
Responsibility of finder of goods
(Section 71):
A person who finds goods belonging to another and
takes them into his custody is subject to same
responsibility as if he were a bailee

Hollins vs. Howler L. R. & H. L.,

• ‘‘H’ picked up a diamond on the floor of ‘F’s shop and handed over
the same to ‘F’ to keep till the owner was found.
• In spite of the best efforts, the true owner could not be traced.
• After the lapse of some weeks, ‘H’ tendered to ‘F’ the lawful expenses
incurred by him an requested to return the diamond to him. ‘F’
refused to do so.
• Held, ‘F’ must return the diamond to ‘H’ as he was entitled to retain
the goods found against everybody except the true owner.
Money paid by mistake or under
coercion (Section 72):
• A person to whom money has been paid or anything
delivered by mistake or under coercion, must repay or
return it
• A payment of municipal tax made under mistaken belief or
because of mis-understanding of the terms of lease can be
recovered from municipal authorities. [Sales tax officer vs.
Kanhaiyalal A. I. R. 1959 S. C. 835]
• A railways company refuses to deliver certain goods unless
the consignee pays some illegal charges. If the consignee
pays those charges, he is entitled to recover so much of the
charge which was illegal and excessively paid under
coercion.
Wagering agreement (Section 30)
• An agreement by way of a wager is void.
• It is an agreement involving payment of a sum of money upon
the determination of an uncertain event.
• The essence of a wager is that each side should stand to win or
lose, depending on the way an uncertain event takes place in
reference to which the chance is taken and in the occurrence of
which neither of the parties has legitimate interest.
• A agrees to pay Rs. 50,000 to B if it rains, and B promises to pay
a like amount to A if it does not rain, the agreement will be by
way of wager.
• But if one of the parties has control over the event, agreement
is not a wager
Essentials of a Wager
1. There must be a promise to pay money or money’s worth.

2. Promise must be conditional on an event happening or not happening.

3. There must be uncertainty of event.

4. There must be two parties, each party must stand to win or lose.

5. There must be common intention to bet at the timing of making such

agreement.

6. Parties should have no interest in the event except for stake

Lottery transactions
• A lottery is a game of chance and not of skill or
knowledge.
• Where the prime motive of participant is gambling, the
transaction amounts to a wager.
• Even if the lottery is sanctioned by the Government of
India it is a wagering transaction.
• The only effect of such sanction is that the person
responsible for running the lottery will not be punished
under the Indian Penal Code. Lotteries are illegal and
even collateral transactions to it are tainted with
illegality (Section 294A of Indian Penal Code).
Section 294A of IPC
• 294A. Keeping lottery office.—Whoever keeps any
office or place for the purpose of drawing any lottery not
being a State lottery or a lottery authorised by the State
Govern­ment, shall be punished with imprisonment of
either description for a term which may extend to six
months, or with fine, or with both. And whoever
publishes any proposal to pay any sum, or to deliver any
goods, or to do or forbear doing anything for the benefit
of any person, on any event or contingency relative or
applicable to the drawing of any ticket, lot, number or
figure in any such lottery, shall be punished with fine
which may extend to one thousand rupees.
Transactions not held as ‘Wagers’
• Commercial transactions or share market transactions
• In these transactions in which delivery of goods or shares is
intended to be given or taken, do not amount to wagers.
• Games of skill and Athletic Competition
• Crossword puzzles, picture competitions and athletic competitions
where prizes are awarded on the basis of skill and intelligence are
the games of skill and hence such competition are valid.
• According to the Prize Competition Act, 1955 prize competition in
games of skill are not wagers provided the prize money does not
exceed Rs. 1,000.
• Horse Race Transactions
• A horse race competition where prize payable to the bet winner is
less than Rs. 500, is a wager.
CONTINGENT CONTRACTS
A contract to do or not to do something, if some event,
collateral to such contract, does or does not happen [Sec
31]

A contracts to pay B Rs. 10,000 if B’s house is burnt. This is

a contingent contract

Contracts of Insurance, indemnity and guarantee fall

under this category
Essentials of a contingent contract

Event or condition
• The performance of a contingent contract would depend upon the
happening or non-happening of some event or condition

Event is collateral
• The event is not part of the contract. The event should be neither
performance promised nor a consideration for a promise
• ‘A’ agreed to construct a swimming pool for ‘B’ for Rs. 200,000.
And ‘B’ agreed to make the payment only on the completion of
the swimming pool. It is not a contingent contract as the event
(i.e. construction of the swimming pool) is directly connected with
the contract.
Essentials of a contingent contract

Not be just will of the promisor

• The event should be contingent in addition to being
the will of the promisor.
• If A promises to pay B Rs 100,000, if he so chooses, it
is not a contingent contract. (In fact, it is not a
contract at all).
• A promises to pay B Rs. 100,000 if A left Delhi for
Mumbai on a particular day, it is a contingent
contract, because going to Mumbai is an event no
doubt within A’s will, but is not merely his will.
Essentials of a contingent contract

Event must be uncertain

• Where the event is certain or bound to happen, the
contract is due to be performed, then it is a not
contingent contract
• ‘A’ agreed to sell his agricultural land to ‘B’ after obtaining
the necessary permission from the collector. As a matter
of course, the permission was generally granted on the
fulfillment of certain formalities. It was held that the
contract was not a contingent contract as the grant of
permission by the collector was almost a certainty.
RULES RELATING TO
ENFORCEMENT
Contracts contingent on an event happening

Contracts contingent on an event not happening

Contingent upon the conduct of a living person

Contingent on happening of specified event within the fixed time

Contingent on specified event not happening within fixed time

Contingent on an impossible event

RULES RELATING TO
ENFORCEMENT
Contracts contingent on an event
happening
• Cannot be enforced until and unless the event
‘happens’. If the happening of the event
becomes impossible, then the contingent
contract is void
• A contracts to pay B a sum of money when B
marries C. C dies without being married to B. The
Contract becomes void
RULES RELATING TO
ENFORCEMENT
Contracts contingent on an event not
happening
• Can be enforced only when it’s happening
becomes impossible
• Where ‘P’ agrees to pay ‘Q’ a sum of money if a
particular ship does not return, the contract
becomes enforceable only if the ship sinks so that
it cannot return
• If the ship returns, the contract will become void
RULES RELATING TO
ENFORCEMENT
Contingent upon the conduct of a living
person
• If a contract is contingent upon as to how a person will act
at an unspecified time, the event shall be considered to
have 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
• Where ‘A’ agrees to pay ‘B’ a sum of money if ‘B’ marries
‘C’. ‘C’ marries ‘D’. This act of ‘C’ has rendered the event
of ‘B’ marrying ‘C’ as impossible; it is though possible if
there is divorce between ‘C’ and ‘D
RULES RELATING TO
ENFORCEMENT
Contingent on happening of specified event
within the fixed time
• Contingent contracts to do or not to do anything, if a
specified uncertain event happens within a fixed time,
becomes void if, at the expiration of time fixed, such event
has not happened, or if, before the time fixed, such event
becomes impossible.
• A promises to pay B a sum of money if certain ship returns
within a year. The contract may be enforced if the ship
returns within the year, and becomes void if the ship is
burnt within the year
RULES RELATING TO
ENFORCEMENT
Contingent on specified event not happening
within the fixed time
• Contingent contracts to do or not to do anything, if a
specified uncertain event does not happen 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
• A promises to pay B a sum of money if a certain ship does
not return within a year. The contract may be enforced if
the ship does not return within the year, or is burnt within
the year
RULES RELATING TO
ENFORCEMENT

Contingent on an 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 when it is made.
• ‘A’ agrees to pay ‘B’ `one lakh if sun rises in the west next
morning. This is an impossible event and hence void.
• X agrees to pay Y `1,00,000 if two straight lines should
enclose a space. The agreement is void.