Meaning & Differences of Contracts And Quasi-Contracts

In this article we are going to discuss about contracts and quasi contracts also we will Distinguish between contract and quasi contract under Indian contract Act 

Contracts

An agreement between two or more individuals creating responsibilities that are enforceable or otherwise recognizable at law. A contract is an agreement enforceable by law. The Contracts or agreements amid various individuals are formed and validated by the Indian Contract Act.

As per the Indian Contract Act, 1872 the term “Contract” means under its section 2 (h) as an agreement enforceable by law. The essential elements of a valid Contract are; 

• Offer and Acceptance- There should be a lawful offer and acceptance for the formation of an agreement. The offer/proposal is well-defined under section 2(a) of the Contract Act. Section 2(b) of the Act states that when an offer is accepted then it becomes a promise.

• Intention to create a Legal relationship- There should be a clear intention amongst the parties that the agreement must be attached by legal consequences and create a legal obligation

• Lawful Consideration- The third essential element of a valid contract is a consideration. The term consideration was defined under section 2(d) of the act.

• Competent parties- Section 11 of the Act states who are competent to contract. According to this section the contracting parties who are competent to contract, are:

• Should have attained the age of majority (an agreement with a minor is void ab initio)

• The person must be of sound mind

• The person should not be disqualified by law

• Free consent- Free consent of the individuals is another essential of the contract. Section 14 of the Act states the term free consent which as follows-
  Consent is said to be free when it is not caused through any Coercion (Section15); Undue influence (Section 16); Fraud (Section 17); Misrepresentation (Section 18); Mistake (Section 20, 21 and 22)

• Lawful Object- In order to the formation of a contract, it is essential that the individuals to an agreement should agree to a lawful object. The object should not be fraudulent or illegal or immoral or against the public policy or must not infer any injury to the individual or the other of the reasons stated above, the agreement is void.

• b void- An agreement should not be one of those, which was expressly declared to be void.

Quasi-contracts

So what are quasi contracts and what are the quasi contract sections? Quasi-contracts are based on the principle of “Nemo debet locupletari ex aliena jactura”, which implies that no man should grow rich out of another person’s loss. Consequently, liability in the case of quasi-contractual responsibilities is based on the principle of ‘unjust enrichment’. Quasi contract Indian contract act basically means that no individual must get unjustly enriched at the cost of another individual’s loss. That means no individual must gain anything unjustly when his gaining such a thing might mean a loss for another individual.

Features of a Quasi-Contract

• Quasi contract origin doesn’t depend on the offer and its acceptance, that is, in an agreement between the individuals.

• Quasi-Contract is based on justice, equity, as well as a good conscience and on the principles of natural justice.

Essentials of Quasi-Contract:

• It is enforced by law. It is not formed by contract;

• It is a right in personam;

• The individual who incurs expenses is entitled to receive money (unjust enrichment); and

• It is raised through a legal fiction

In quasi-contract, there would be no offer and acceptance so there shall be contractual relations amid the partners. It is created by means of the virtue of law and is known as a quasi-contract. Quasi contract Sections 68 to 72 of the Indian Contract Act 1872 provide for 5 kinds of quasi-contractual obligations, they are

• Supply of necessities [s.68]

• Payment by interested persons [s.69]

• Liability to pay for non-gratuitous acts [s.70]

• Finder of goods [s.71]

• A mistake of coercion [s.72]

Similarities between Quasi Contracts and Contracts

The result of the contract, as well as the quasi-contract, is similar to that of contracts. In case of the claim for damages are concerned both of them are very similar to that of contracts because Quasi contract Section 73 of the Indian Contract Act, 1872 if offers remedies for the violation of quasi-contracts as provided for the breach of express contracts in many sections of the Indian Contract Act, 1872. Remedies are also available under the quasi-contract under the Indian contract act, 1872.

Difference between Quasi-Contract and Contract

Distinction between contract and quasi contract is generally expressed as they contain each term in words whereas, in the latter, the terms come into existence through the conduct of the individuals. The express contracts are approved by individuals as a matter of law both share equal interests with equal consequences though the conditions are specified expressly whereas in the case of quasi-contracts the law enforces obligations considering the conduct of the individuals in order to prevent undue advantage to one individual at the cost of another.

Two quasi contract example India are-

First quasi- contract example is-

A plumber accidentally installs a sprinkler system in the lawn of the wrong house and the man knew  it in whose house it was being installed.

In this case the man would be held liable to pay.

Second quasi contract example is-

In the above mentioned example if the man had no knowledge of the sprinkle being installed he would not be held liable.