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CONTRACT – QUASI CONTRACT

Contract:—

An agreement between competent parties, upon a legal consideration, to do or to abstain from doing some act. For numerous other definitions, see Chalmers’s Sale of Goods Act, App. II., at p. 169, where it is said that ‘the disposition of the best modern writers appears to be define ‘contract’ as an agreement enforceable at law,’ but contended that this definition seems rather too narrow. Every contract is founded upon the mutual agreement of the parties; when the agreement is formal, and stated either verbally or in writing, it is usually called an express contract; when the agreement is matter of inference and deduction, it is called an implied contract. Contracts are also distinguished into executed and executory: executed, where nothing remains to be done by either party, and where the transaction is completed at the moment that the arrangement is made; as where an article is sold and delivered, and payment for it is made on the spot; executory, where some future act is to be done; as where an agreement is made to build a house in six months; or to do an act on or before some future day; or to lend money upon a certain interest, payable at a future time. There is also one other distinction, namely, that between entire and severable contracts. An entire contract is one the consideration of which is entire on both sides. The entire fulfilment of the promise by either is a condition precedent to the fulfilment of any part of the promise by the other. Whenever, therefore, there is a contract to pay the gross sum for a certain, and definite consideration, the contract is entire. A severable contract is one the consideration of which is, by its terms, susceptible of apportionment on either side, so as to correspond to the unascertained consideration on the other side, as a contract to pay a person the worth of his services so long as he will do certain work; or to give a certain price for every bushel of so much corn as corresponds to a sample.

Agreement:—

Every promise and every set of promises, forming the consideration for each other, is an agreement, [Section 2(e), Contract Act, 1872. Agreement includes any arrangement or understanding or action in concert, — (i) whether or not, such arrangement, understanding or action is formal or in writing; or (ii) whether or not such arrangement, understanding or action is intended to be enforceable by legal proceedings, [Section 2(b), Competitions Act, 2002 . An agreement means an agreement (whether written or oral, partly written and partly oral) between a debtor and creditor and includes an agreement providing for forced labour, the existence of which is presumed under any social custom prevailing in the concerned locality, [Section 2(b), Bonded Labour System (Abolition) Act, 1976 . A joining together of two or more minds in anything done or to be done. For the purpose of these regulations means an agreement entered into between an Insurance Web Aggregator and an Insurer, Regulation 2(b), Insurance Regulatory and Development Authority of India (Insurance Web Aggregators) Regulations, 2017

Implied Contract :— A contract which the law infers, from acts, circumstances or relationships, as that an employer will pay the person employed what his labour was worth.

Void Agreement:-

An agreement not enforceable by law is said to be void, Section 2(g), Contract Act, 1872 

Voidable Contract:—

An agreement which is enforceable by law at the option of one or more of the parties- thereto, but not at the option of the other or others, is a voidable contract, Section 2(i), Contract Act, 1872 .

Consideration:—

A reasonable equivalent or other valuable benefit passed on by the promisor to the promisee or by the transferor to the transferee. Similarly, when the word “consideration” is qualified by the word “sole”, it makes consideration stronger so as to make it sufficient and valuable having regard to the facts, circumstances and necessities of the case, CCE v. Fiat India (P) Ltd.(2012) 9 SCC 332

“Consideration” means a reasonable equivalent or other valuable benefit passed on by the promisor to the promisee or by the transferor to the transferee, Sonia Bhatia v. State of U.P.(1981) 2 SCC 585. The price, motive or matter of inducement of a contract, which must be lawful in itself. The consideration is the very life of a simple contract or parol agreement; while a specialty or contract under seal, does not require a consideration to make it obligatory at law, the law always presuming a sufficient consideration, which the parties, except, in special cases, are estopped from denying. The law, then, not only requires a consideration in the case of a simple contract (under which term is included all contracts not under seal, whether oral or written), but that it should be valuable — i.e. a legal consideration emanating from some injury or inconvenience to the one party or from some benefit to the other party. A moral consideration, founded upon mere affection or gratitude, will not support a contract, as was held, in Eastwood v. Kenyon, (1840) 11 A & E 438, after many conflicting decisions on the subject. Consideration divide themselves into (1) valuable; and (2) insufficient. The connotation of the word “consideration” comprehends “taking note of” or “paying heed to” depending upon the nature of the subject, Corpn. of the City of Bangalore v. Kesoram Industries and Cotton Mills Ltd.1989 Supp (2) SCC 753.

 “Consideration” has been defined as “Something that is legally regarded as the equivalent or return given or suffered by one for the act or promise of another.” [Webster’s Third New International Dictionary (Unabridged).], Provident Fund Commr. v. Shiv Kumar Joshi(2000) 1 SCC 98 : 2000 SCC (L&S) 37. 

‘Consideration’ means a reasonable equivalent or other valuable benefit passed on by the promisor to the promisee or by the transferor to the transferee. The words ‘adequate consideration’ clearly postulate that consideration must be capable of being measured in terms of money value having regard to the market price of the property, the value that it may fetch if sold, the value of similar lands situated in the vicinity, so on and so forth, Sonia Bhatia v. State of U.P.(1981) 2 SCC 585.

Quasi Contract:—

1. The law of quasi-contract is “that part of restitution which stems from the common indebitatus counts for money had and received and for money paid and from quantum meruit and quantum valebat claims.” Halsbury’s Law of England, 4th Edn. Page 434 states: “Common Law, any civilised system of law is bound to provide remedies for cases of what has been called unjust enrichment or unjust benefit, that is, to prevent a man from retaining the money of or some benefit derived from, another which it is against conscience that he should keep. Such remedies in English law are generically different from remedies in contract or in tort and are now recognised to fall within a third category of the common law which has been called quasi contract or restitution, Kavita Trehan v. Balsara Hygiene Products Ltd.(1994) 5 SCC 380. 2. An act which has not the strict form of a contract, but yet has the effect of it; an implied contract.

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