Question-1: What do you mean by Quasi contract? Is it a contract at all?

Answer: An agreement enforceable by low is a contract. There are several kinds of

contracts, namely - valid contract, void able contract and void agreement, there is another
kind of contract names quasi-contract.

Quasi-contract: Quasi-contracts are contracts which are not created voluntarily, but in
which the relations among the parties resemble the relations, which are created, virtually
by contracts. The court treats Quasi-contracts as real contract and compels payment,
which is promised under such contracts. In cases pf Quasi-contract the parties are put in
the same position, as they would have occupied had there been a contract between them.
Therefore, the contracts, which exist in law only but not in fact, are called Quasi-
contracts. In the Bangladesh contract act, the Quasi-contracts are described as the
relations resembling those of contract.

Section-68 to 72 of the contract act 1872 describe the cases which are treated as Quasi-
contracts,

 “If a person incapable of entering in to a contract or any one 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 form the property of such incapable person.”
-Section 68

 “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.”
-Section 69

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  “Where a person law fully dose anything for another person, or delivers anything
to him, not intending to do so gratuitously, and such other person enjoys the
benefit there of, the letter is bound to make compensation to the former in respect
of or to restore, the thing so done or delivered.
- Section 70

 “A person who finds goods belonging to another and takes them into his custody,
is subject to the same responsibility as a bailee”
-Section 71
Section-168, 169 of the contract act deals with the rights and obligations of the bailee.

 “A person to whom money has been paid or anything delivered by mistake or

under coercion must repay or return it”.
- Section 72

Example- ‘A” and ‘B’ jointly owe Tk. 2000 to ‘C’. ‘A’ alone pays the amount to ‘C’ and
‘B’ not knowing this fact, pays Tk. 2000 over again to ‘C’. ‘C’ is bound to repay the
amount to ‘B’.

After discussing the above sections of the contract act 1872 it can be easily said that
Quasi-contract is a real contract by the court.

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Question-2: “There are certain relations resembling those created by
contract.”-Discuss.

Answer: There are many situations in which law as well as justice requires that a certain
person be required to conform to an obligation, although he has neither broken an
contract nor committed any tort. For example, a person in whose home certain goods
have been left by mistake is bound to restore them. Such obligations are generally
described, for want of a better or more appropriate name, quasi-contractual obligations.

'Theory of Unjust Enrichment

The theory on which quasi-contractual obligations are based is not yet final settled. Lord
MANSFIELD, who is considered to be the real founder of such obligations, explained
them on the principle that law as well as justice should try to prevent "unjust
enrichment", that is, enrichment of one person at the cost of another. His Lordship offered
this explanation in Moses v Macferlan:

"Jacob issued four promissory notes to Moses and the latter indorsed there to Macferlan,
excluding, by a written agreement, his personal liability on the endorsement. Even so
Macferlan sued Moses on the endorsement and he was held liable despite the agreement.
Moses was thus compelled to discharge liability which he had excluded and, therefore,
sued to recover back his money from Macferlan."

He was allowed to do so. After stating that such money cannot be recovered where the
person to whom it is given can "retain it with a safe conscience". Lord MANSFIELD

continued:

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"But it lies for money paid by mistake; or upon a consideration which happens to fail; or
for money got through imposition; or extortion, oppression; or for an undue advantage
taken of the plaintiff's situation, contrary to laws made for the protection of persons under
those circumstances. In one word, the gist of this kind of action is, that the defendant,
upon the circumstances of the case, is obliged by ties of natural justice and equity to
refund the money."

A liability of this kind is hard to classify. Partly it resembles liability under the law of tort
inasmuch as it arises independently of any contract. Partly it resemble contract inasmuch
as it is owed only to one party and not "to persons generally' Thus it can be accounted for
either under an implied contract or under natural justice and equity for the prevention of
unjust enrichment. Lord MANSF1ELI preferred the latter theory.

Theory of “Implied-in-fact” Contract:

But beginning with the decision of the House of Lords in Sinclair v Brougham, it became
fashionable to discard Lord MANSFIELD'S formulation and to rely upon an implied-in-fact
contract.

A building society undertook banking business which was outside its objects and,
therefore, ultra vires. The society came to be wound up. After paying off all the outside
creditors, a mixed sum of money was left which represented partly the shareholders'
money and partly that of the ultra vires depositors, but was not sufficient to pay both of
them. The depositors tried lo get priority by resorting to the quasi-contractual action for
recovery of money had and received for the depositors' benefit, for otherwise the
shareholders would be unjustly enriched.

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The House of Lords allowed rateable (pari passu) distribution of the mixed fund among
the claimants, but did not allow any remedy under quasi-contract. Lord HALDANE

maintained that common law knows personal actions of only two classes, namely, those
founded on contract and those founded on tort. "When it speaks of action arising quasi ex
contractu it refers only to a class of action in theory which is imputed to the defendant by
a fiction of law. Similarly, Lord SUMNER observed that an action for money had and
received rests, not on a contractual bargain between the parties, but "upon a notional or
imputed promise to repay". Lord PARKER expressly pointed out that if a promise to pay
back an ultra vires loan could be imputed to the company as quasi-contractual obligation,
the result would be to validate a transaction which has been declared to be void on the
ground of public policy and the law would be enforcing a notional contract where an
express contract would have been void.

This approach dominated decisions for a long time and the decision was taken to have
settled that the juridical basis of quasi-contract was the implied, notional or fictional
contract. Where the circumstances of a case do not lead to an inference of this kind or
where such an inference would be against the law, no liability will arise.

Restoration of Theory of Unjust Enrichment

The identification of quasi-contracts with implied contracts restricted the scope of relief,
which would have been possible without any such hindrance under the principle of
"natural justice and equity". The suffocation was felt by House of Lords itself in Fibrosa
Spolka Akeyjna v Fairbain Lawson Combe Barbour Ltd'' A sum of money was paid in
advance under a contract for the supply of a machine or for the supply of machinery', and
the performance was obstructed by the outbreak of war. Their Lordships allowed the
advance to be recovered back as having been paid for a consideration, which had wholly
failed. Lord WRIGHT lent support to Lord MANSFIELD'S theory of unjust enrichment. He
observed:

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"It is clear that any civilized 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 generally different
from remedies in contract or tort, and are now recognized to fall within a third category
of the common law which has been called quasi-contract or restitution."

Referring to the ratio decidendi of the decision of the House of Lords in Sinclair v
Brougham9 Lord WRIGHT pointed out that the case turned upon the principle that it was
against public policy to allow the recovery of an ultra vires deposit, whether the claim is
based upon contract or quasi-contract. The observations of their Lordships relating to the
foundation of quasi-contract were merely obiter dicta. Indeed the House adopted the pari
passu distribution of the available assets as a technique to prevent the unjust enrichment
of the shareholders at the cost of the depositors.10

After discussing the above theories we can come to the conclusion that there are certain
relations resembling those created by contract.

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Question-3: Why is it said that infancy is a disability but in practice law
protects infant persons, preserve their rights and estates and act as their
guardian?

Answer: Accounting to the section-10 of the contract act 1872 the parties to a contract
must be competent and section-11 declares that a minor is not competent. But neither
section makes it clear wheatear, if a minor enters into an agreement, it would be voidable
at his option or altogether void. These provisions had, there fore, quite naturally given
rise to a controversy about the nature of a minor’s agreement. The controversy was only
resolved in 1903 by the judicial committee of the Privy Council.

Under the Majority act, 1875 of Bangladesh a minor has been defined as “one who has
not completed his or her 18th year of age” Infancy is said to be a disability but in practice
it is really protection guaranteed by law courts. Law acts as the guardian of minors and
protects their rights; because their mental faculties are not matured they don’t possess the
capacity to judge what is good and what is bad for them. It has rightly their (infants)
persons; preserves their right and estates; execute excuseth their laches, and assist them in
their Pleadings. The judges are their counselors, the juries are their servants and law is
their guardian, these things will be much more clear if we discuss the following facts.

• Except in special cases, a contract by a minor is completely void and is not

operative the reason being that minor cannot come to a right decision about
advantage or disadvantage of the contract.

• Ratification: A mirrors agreement is void ab-initio and as such the agreement

cannot be validated. Therefore, a minor cannot ralify a contract even an attaining
majority.

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• If a minor receives a benefit form a sale or Mortgage of property, in that case the
minor cannot be compelled for refunding the money and his property also cannot
be held liable for that.

• There can be no estoppels against a minor. It means that if a minor represents

himself as a major by way of falsification and enters into an agreement with
another one by inducing the latter, in that case the minor can nevertheless plead
minority as a defense in an action on the agreement.

• According to the section-30 of the partnership act a minor cannot enter into a
contract of partnership. However with the consent of all the partners, the minor
can enjoy all the benefits of a partnership. That means a minor can be a partner.

• A minor can work as an agent of someone. But for that he will not be held liable to
the employer or to the principal. He cannot also be held liable to a third person for
this.

• A minor cannot enter into an agreement but an agreement intered into by a

guardian or by a supervisor of the minor’s property on behalf will be enforceable
by law. The conditions which are to be fulfilled in this regard are the following,
(1) The guardian or the supervisor did not exceed his rights or powers, and (2)
That the agreement has been intend into by the guardian or supervisor for the
benefit or interest of the minor or for the legal necessity of the minor. In this case,
the powers or rights of the guardian will be determined by the guardian and wards
act.

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 • A minor can be promisee, according to the contract act; an agreement under which
a minor has received a benefit can be enforced as against the other party. If a
mortgage is executed in favor of a minor, in that case the minor can get a decree
for the enforcement of the mortgage.

• An agreement performed by a minor is considered void, and as such the court

cannot direct specific performance of such agreement by the minor.

• A minor can execute a negotiable instrument and also endorse it by making the
other party liable but not himself.

• The property of a minor is held liable for payment of reasonable price for the
necessaries (these being goods, service, rendered, loans) supplied to the minor or
to any one whom the minor is legally bound to support.

• Minors cannot be declared as insolvent. Because they cannot operate any thing
and law protects them to be declared insolvent.

• In case of specific performance of contract direction or order cannot be given to a

minor because law is protecting them to be directed.

From the above analysis it can be easily said that infancy is a disability but in practice
law protects infant persons, preserves their rights and estates and act as their guardian.
That means a minor is not competent to contract but if he do so then law will protect
them prom their problem.

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