Definition of 'Quasi Contract' A legal agreement created by the courts between two parties who did not have

a previous obligation to each other. A normal contract requires two parties to consent to mutually agreeable terms. Under a quasi contract, neither party is originally intended to create an agreement. Instead, an arrangement is imposed by a judge to rectify an occurrence of unjust enrichment. Investopedia explains 'Quasi Contract'When one party knowingly receives something for nothing, the courts may impose a quasi contract. For example, if UPS delivers a new television to Zoe that she did not order and she keeps the television and does not attempt to return it to the company that mistakenly shipped it to her, a judge could impose a quasi-contract to force her to pay for the television. Zoe did not intend to purchase the TV, and the TV company did not intend to sell her a TV, but since she chose to benefit from the TV at the company's expense, the court requires her to reimburse the TV company to make the situation fair. Free Consent Indian Contract Act The contract, to be valid must contain some ingredients. One of the most important element is the free consent of parties. The contract is the agreement between two or more persons. So there must be meeting of minds in similar manner. So the meeting must be voluntary. It must be free from any compulsion or pressure. A contract without free consent is not proper. Section 13 of the Indian Contract Act, 1872 says that when two or more persons agree upon the same thing in the same sense, there is consent. Consent can be express and implied. Section 14 of the Act goes on saying what is free consent. There are different elements the presence of which will compel someone to enter into a contract. So if those elements are present the contract is not formed by free consent. Those elements are as follows: Coercion(Section 15)-In order to cause any person to enter into any contract, one person commits or threatens to commit an illegal act as defined in Indian Penal Code or unlawfully detains any property connected with the other person or threatens to do so. Undue Influence(Section 16)-When a person in a position to dominate the will of other uses this position to obtain an unfair advantage over another in a contract. Fraud(Section 17)- Every act, promise, omission intended to deceive forms fraud. Misrepresentation(Section 18)- Misleading another in a contract comes under misrepresentation. Mistake(Sections 20-22)- Mistake is the erroneous belief either of law or fact by one or other parties or both. If one or all of the above elements are present in forming a contract, it is voidable. Section 19 of Indian Contract Act specifically says that when the consent to an agreement is caused by coercion, fraud or misrepresentation, the agreement is a contract voidable at the option of the part whose consent was so caused. Section 20 says that when both parties are under a mistake as to a matter of fact essential to the agreement, the agreement is void. Section 19A says that a contract in which the agreement is caused by undue influence, it is voidable

Valid Contract-Requirements
A contract is a consensus of mind of two parties to an agreement. Indian Law of Contract is governed by Indian Contract Act, 1872. The word 'contract' had its origin from a Latin term "Contractum" which means 'drawn together'. The word Contract is defined in the Indian Contract Act in Section 2(h). It is an agreement enforced by law as per the definition. So only agreements enforced by law are termed Contract. This means that there should be backing of law. An unlawful agreement will not be considered valid according to Indian Contract Act. Hence we can say that there are certain requirements or ingredients which forms a valid contract. Section 10 of the Indian Contract Act defines that "all agreements are contracts if they are made by the free consent of parties, competent of contract for a lawful consideration and with a lawful object and are not hereby expressly declared to be void". The requirements of a valid contract are as stated in the above definition. They are as noted below: (1)Agreement An agreement is defined in Section (e)of the Indian Contract Act. To constitute an agreement two parties are necessary viz the offeror and acceptor. There must be a promise and acceptance. There must be valid consideration also. (2)Free Consent of parties Free Consent is one of the essential ingredient required for a contract to be valid in the eye of law. It must be made with a free mind. As per Section 13 of the Act two or more persons are said to consent when they agree upon the same thing in the same sense. There must be 'consensus ad idem' or meeting of minds which are identical. Section 14 of the Act further says that consent is said to be free when it is not caused by coercion, undue influence, fraud, misrepresentation and mistake. This means that the contract should not be entered upon as a result of the above things. If it is so entered it is not with a free mind and not a valid contract. (3) Competency of Parties The parties must also be capable in the eye of law to enter into a contract. This rule is contained in Section 11 of the Act. It says that every person who is of the age of majority according to the law to which he is subject and of sound mind and is not disqualified from contracting by any law to which he is subject is competent to contract. The parties must be capable of understanding and forming a rational judgement of the effect of the contract.[Sec.12] (4) Lawful Consideration There must be consideration to make a contract valid. The term is defined in Section 2(d) of the Contract Act. If a person has done anything according to the wish and requirement of another or promises to do so, such act or promise forms a consideration. A contract without consideration is a nullity.[Section 25] (5) Lawful object The purpose of the contract must be to do something lawful. There must not be an intention to do an illegal act. The object must capable of lawful achievement. According to Section 24 of the Act unlawful agreements are void. (6) Not expressly void There are some agreement in the Act which are expressly declared void. Agreement in restraint of marriage[Sec.26], agreement in restraint of trade[Sec.27], agreement in restraint of legal proceedings[Sec.28], agreements whic are uncertain[Sec.29], Agreements by way of wager[Sec.30] etc. An agreement must be one apart from the above to form a valid contract.

Thus a Contract to be valid must contain the above requirements. Unless they will either be void or voidable as per the Indian Contract Act.

Contract: express and implied terms How are terms incorporated into a contract? At first it looks like a silly question, because wed usually expect them to be explicitly included in the contract. Express terms are terms that have been specifically mentioned and agreed by both parties at the time the contract is made. They can either be oral or in writing. However, sometimes a term which has not been mentioned by either party will nonetheless be included in the contract, often because the contract doesnt make commercial sense without that term. Terms like this are called implied terms, and there are two main types:
y

Terms implied by statute: the Sale of Goods Act 1979. The key provisions are:
o o

Section 12: the person selling the goods has to have the legal right to sell them. Section 13: if youre selling goods by description, e.g. from a catalogue or newspaper advert, then the actual goods have to correspond to that description. Section 14: the goods must be of satisfactory quality that is, they should meet the standard that a reasonable person would regard as satisfactory. Also, if the buyer says theyre buying the goods for a particular purpose, theres an implied term that the goods are fit for that purpose. Section 15: if youre selling the goods by sample you show the customer one bag of flour and they order 50 bags then the bulk order has to be of the same quality as the sample.

Terms implied by the courts

o

As a matter of fact. Something thats so obviously included that it didnt need to be mentioned in the contract. If I agree to pay you 50 for a lawnmower, it probably wouldnt occur to us to write down that we mean fifty pounds sterling, as opposed to any other sort of pound. Thats obvious to both of us. (Beware of this point it has to have been obvious to both parties its not enough to show that one party thought it was included, or that the contract would have been more reasonable with the added term.) As a matter of law. This is about general considerations of public policy the courts are laying down, as a matter of law, how the parties to certain types of contract ought to behave. For example, in one case, the courts held that landlords of blocks of flats ought to keep the communal areas (lifts, stairs etc) in a reasonable state of repair so that term was implied into the rental contract.

Customary terms. Some terms are generally known to be included in contracts in a particular trade or locality. Amongst bakers, one dozen means thirteen they dont have to include terms in every contract specifying that.

Do note that any of these terms implied by the courts can be excluded with an express term. If a bakers contract has a clear term in it that says one dozen means twelve for the purposes of this contract, then the courts cant say that a dozen has to equal thirteen!

TENDER
A tender is an offer to do or perform an act which the party offering, is bound to perform to the party to whom the offer is made. A tender may be of money or of specific articles; these will be separately considered. Of the lender of money. To make a valid tender the following requisites are necessary: 1. It must be made by a person capable of paying: for if it be made by a stranger without the consent of the debtor, it will be insufficient. It must be made to the creditor having capacity to receive it, or to his authorized agent. The whole sum due must be offered, in the lawful coin of the United States, or foreign coin made current by law and the offer must be unqualified by any circumstance whatever. But a tender in bank notes, if not objected to on that account, will be good. But in such case, the amount tendered must be what is due exactly, for a tender of a five dollar note, demanding change, would not be a good tender of four dollars. And a tender was held good when made by a check contained in a letter, requesting a receipt in return which the plaintiff sent back demanding a larger sum, without objecting to the nature of the tender. When stock is to be tendered, everything must be done by the debtor to enable him to transfer it, but it is not absolutely requisite that it should be transferred. If a term had been stipulated in favor of a creditor, it must be expired; the offer should be made at the time agreed upon for the performance of the contract if made afterwards, it only goes in mitigation of damages, provided it be made before suit brought. The tender ought to be made before day-light is entirely gone. The condition on which the debt was contracted must be fulfilled. The tender must be made at the place agreed upon for the payment, or, if there be no place appointed for that purpose, then to the creditor or his authorized agent. When a tender has been properly made, it is a complete defence to the action but the benefit of a tender is lost, if the creditor afterwards demand the thing due from the debtor, and the latter refuse to pay It

Of the tender of specific articles. It is a rule that specific articles maybe tendered at some particular place, and not, like money, to the person of the creditor wherever found. When no place is expressly mentioned in the contract, the place of delivery is to be ascertained by the intent of the parties, to be collected from the nature of the case and its circumstances. If, for example, the contract is for delivery of goods from the seller to the buyer on demand, the former being the manufacturer of the goods or a dealer in them, no place being particularly named, the manufactory or store of the seller will be considered as the place intended, and a tender there will be sufficient. When the specific articles are at another place at the time of sale, that will be the place of delivery. When the goods are cumbrous, and the place of delivery is not designated, nor to be inferred from the circumstances, it is presumed that it was intended that they should be delivered at any place which the creditor might reasonably appoint; if the creditor refuses, or names an unreasonable place, the debtor may select a proper place, and having given notice to the creditor, deliver the goods there.

Definition of 'Auction'
A system where potential buyers place competitive bids on assets and services. The asset or service in question will sell to the party that places the highest bid. In most cases, sellers will pay a listing fee to the auctioneer, regardless of whether the item actually sells for the desired price.

Investopedia explains 'Auction'

For example, Google used a modified form of auctioning called the dutch auction when it issued its IPO. In this form of auction, prospective buyers submitted bids that included the number of shares desired and what the bidder was willing to pay for them. After the auction ended, the underwriters sorted through bids in order to determine the minimum priced bid they would accept from buyers. The IPO was priced at $85. The internet has increased the amount of exposure that auctions now have, and bidders no longer have to be physically present to participate. Online marketplaces such as eBay connect buyers and sellers worldwide by allowing individuals to submit their bids (or list their products) online and send payment electronically. Read more: http://www.investopedia.com/terms/a/auction.asp#ixzz1iSjkXOXT

Definition of 'Request For Proposal - RFP'

A type of bidding solicitation in which a company or organization announces that funding is available for a particular project or program, and companies can place bids for the project's completion. The Request For Proposal (RFP) outlines the bidding process and contract terms,

and provides guidance on how the bid should be formatted and presented. A RFP is typically open to a wide range of bidders, creating open competition between companies looking for work.

Investopedia explains 'Request For Proposal - RFP'

A Request For Proposal for a specific program may require the company to review the bids not only examine their feasibility , but also the health of the bidding company and the ability of the bidder to actually do what is proposed. The RFP may provide detailed information on the project or program, but can leave leeway for the bidder to fill in the blanks with how the project would be completed or program run.

Read more: http://www.investopedia.com/terms/r/request-for-proposal.asp#ixzz1iSk8UUC4

The Indian Contract Act, 1872

Sec.25

25. Agreement without consideration, void, unless it is in writing and registered or is a promise to compensate for something done or is a promise to pay a debt barred by limitation law -

An agreement made without consideration is void, unless -

(1) it is expressed in writing and registered under the law for the time being in force for the registration of 1documents, and is made on account of natural love and affection between parties standing in a near relation to each other; or unless.

(2) it is a promise to compensate, wholly or in part, a person who has already voluntarily done something for the promisor, or something which the promisor was legally compellable to do; or unless.

(3) it is a promise, made in writing and signed by the person to be charged therewith or by his agent generally or specially authorised in that behalf, to pay wholly or in part debt of which the creditor might have enforced payment but for the law for the limitation of suits. In any of these cases, such an agreement is a contract.

Explanation 1 : Nothing in this section shall affect the validity, as between the donor and donee, of any gift actually made.

Explanation 2 : An agreement to which the consent of the promisor is freely given is not void merely because the consideration is inadequate; but the inadequacy of the consideration may be taken into account by the Court in determining the question whether the consent of the promisor was freely given.

Illustrations

(a) A promises, for no consideration, to give to B Rs. 1,000. This is a void agreement.

(b) A, for natural love and affection, promises to give his son, B, Rs. 1,000. A puts his promise to B into writing and registers it. This is a contract.

(c) A finds Bs purse and gives it to him. B promises to give A Rs. 50. This is a contract.

(d) A supports Bs infant son. B promises to pay As expenses in so doing. This is a contract.

(e) A owes B Rs. 1,000, but the debt is barred by the Limitation Act. A signs a written promise to pay B Rs. 500 on account of the debt. This is a contract.

(f) A agrees to sell a horse worth Rs. 1,000 for Rs. 10. As consent to the agreement was freely given. The agreement is a contract notwithstanding the inadequacy of the consideration.

(g) A agrees to sell a horse worth Rs. 1,000 for Rs. 10. A denies that his consent to the agreement was freely given.

The inadequacy of the consideration is a fact which the Court should take into account in considering whether or not As consent was freely given. Comments

Natural love and affection as a consideration

In order to rely upon clause (1) of section 25, the existence of the factum of natural love and affection between parties standing in a near relation to each other is a condition precedent; Rajlukhy Dabee v. Bhootnath Mookherjee, (1900) 4 CWN 488.

Voluntary services

If the services are rendered voluntarily, without the desire of the promisor or otherwise than at his request and the promisor undertakes to recompense the person who has rendered his services

for it. In such cases, the promise does not need a consideration to support it, and the case falls under section 25 of the Act; Sindha Shri Ganpatsingji v. Abraham alias Vazir Mahomed Akuji, (1895) 20 Bom 755.

The Indian Contract Act, 1872

26. Agreement in restraint of marriage, voidEvery agreement in restraint of the marriage of any person, other than a minor, is void.

COMMENTS

Agreement in restraint of marriage

An agreement between two co-widows that if any of them remarried, she should forfeit her right to her share in the deceased husbands property is not in restraint of marriage; A. Suryanarayan Murthi v. P. Krishna Murthy, AIR 1957 Ori 125.

The Indian Contract Act, 1872

27. Agreement in restraint of trade, void

Every agreement by which anyone is restrained from exercising a lawful profession, trade or business of any kind, is to that extent void.

Exception 1 : Saving of agreement not to carry on business of which good will is sold - One who sells the goodwill of a business may agree with the buyer to refrain from carrying on a similar business, within specified local limits, so long as the buyer, or any person deriving title to the goodwill from him, carries on a like business therein, provided that such limits appear to the court reasonable, regard being had to the nature of the business.
1

[***]

COMMENTS

Agreement in restraint of trade The words restrained from exercising a lawful profession, trade or business, do not mean an absolute restriction, and are intended to apply to a partial restriction, a restriction limited to same particular place; Mahbub Chander v. Raj Coomar, (1874) XIV Bengal Law Reports 76.

The Indian Contract Act, 1872

28. Agreements in restrain of legal proceedings, void 1

[***]Every agreement, by which any party thereto is restricted absolutely from enforcing his rights under or in respect of any contract, by the usual legal proceedings in the ordinary tribunals, or which limits the time within which he may thus enforce his rights, is void to the extent.

Exception 1 : Saving of contract to refer to arbitration dispute that may arise.This section shall not render illegal contract, by which two or more persons agree that any dispute which may arise between them in respect of any subject or class of subject shall be referred to arbitration, and that only and amount awarded in such arbitration shall be recoverable in respect of the dispute so referred.

[***]

Exception 2: Saving of contract to refer question that have already arisen - Nor shall this section render illegal any contract in writing, by which two or more persons agree to refer to arbitration any question between them which has already arisen, or affect any provision of any law in force for the time being as to reference to arbitration. 3

COMMENTS

Agreement restricting law of limitation The clause in the agreement that the appellant would not have any right under the bond after the expiry of six months from the date of termination of the contract has been held not to be contrary to section 28 of the Act nor it imposed any restriction to file a suit within six months; Food Corporation of India v. New India Assurance Co. Ltd., AIR 1994 SC 1896.

Jurisdiction of the proper court

It has been held that it is not open to the parties by agreement to confer jurisdiction on any court which it did not otherwise possess under section 20 of Code of Civil Procedure; Patel Roadways v. Prasad Trading Company, AIR 1992 SC 1514.

The Indian Contract Act, 1872

29. Agreements void for uncertainty Agreements, the meaning of which is not certain, or capable of being made certain, are void.

Illustrations

(a) A agrees to sell B a hundred tons of oil. There is nothing whatever to show what kind of oil was intended. The agreement is void for uncertainty. (b) A agrees to sell B one hundred tons of oil of a specified description, known as an article of commerce. There is no uncertainty here to make the agreement void.

(c) A, who is a dealer in coconut-oil only, agrees to sell to B one hundred tons of oil. The nature of As trade affords an indication of the meaning of the words, and A has entered into a contract for the sale of one hundred tons of coconut-oil.

(d) A agrees to sell B all the grain in my granary at Ramnagar. There is no uncertainty here to make the agreement void.

(e) A agrees to sell to B one thousand maunds of rice at a price to be fixed by C. As the price is capable of being made certain, there is no uncertainty here to make the agreement void.

(f) A agrees to sell to B my white horse for rupees five hundred or rupees one thousand. There is nothing to show which of the two prices was to be given. The agreement is void.

The Indian Contract Act, 1872

30. Agreements by way of wager, void

Agreements by way of wager are void; and no suit shall be brought for recovering anything alleged to be won on any wager, or entrusted to any person to abide the result of any game or other uncertain event on which may wager is made. Exception on favour of certain prizes for horse-racing: This section shall not be deemed to render unlawful a subscription or contribution, or agreement to subscribe or contribute, made or entered into for or toward any plate, prize or sum of money, of the value or amount of five hundred rupees or upwards, to be rewarded to the winner or winners of any horse-race.

Section 294A of the Indian Penal Code not affected : Nothing in this section shall be deemed to legalize any transaction connected with horse-racing, to which the provisions of section 294A of the(45 of 1860) apply.

COMMENTS

Scope To treat an agreement by way of wager as void is that the law discourages people to enter into games of chance and make earning by trying their luck instead of spending their time, energy and labour for more fruitful and useful work for themselves, their family and the society; Subhash Kumar Manwani v. State of Madhya Pradesh, AIR 2000 MP 109.

Wagering Contract

A chit-fund does not come within the scope of wager; Narayana Ayyangar v. K.V. Ambalam, (1927) ILR 50 Mad 696 (FB).

The Indian Contract Act, 1872

31. "Contingent contract" defined

A "contingent contract" is a contract to do or not to do something, if some event, collateral to such contract, does or does not happen.

Illustration

A contracts to pay to B Rs.10,000 if Bs house is burnt. This is a contingent contract.

past consideration
Consideration consisting of an act performed or promise given in the past. For example, the promise to pay a debt that one is already obligated to pay is past consideration. A contract based on such consideration is usually unenforceable because, typically, the original performance was done or the original promise was made for some reason other than to exchange it for the current performance or promise of the promisor.

Consideration Definition:
Some right, interest, profit or benefit accruing to the one party of a contract, or some forbearance, detriment, loss or responsibility given, suffered or undertaken by the other.

Related Terms: Contract, Nudum Pactum, Quid Pro Quo

Under common law, there can be no binding contract without consideration, which was defined in an 1875 English decision as "some right, interest, profit or benefit accruing to the one party, or some forbearance, detriment, loss or responsibility given, suffered or undertaken by the other". As stated recently in Terrafund Financial Inc. v 569244 BC Ltd.: "It is a fundamental principle of contract law that in order to create a binding contract which the law will recognize and enforce, there must be an exchange of consideration between the parties. "Consideration is simply something of value received by a promisor from a promisee. It can take the form of a right, interest or benefit accruing to one party, or some forbearance, detriment, loss, or responsibility, given, suffered or undertaken by the other . "If there is no consideration there is no contract; and if there is no contract, there is nothing upon or from which to found or create liability. "The act or promise of one party is, as it were, 'bought' or 'bargained for' by the act or promise of the other; each party exchanges something of value. To create an enforceable contract there must be ... 'reciprocal undertakings'. So, if one party is neither giving anything, nor is promising to do or give anything, there is no consideration for the other partys act or promise."
gratuitous consideration Consider-ation that is neither a detriment or loss to a promisee nor a benefit to the promisor. For example, the promise to pay for an item with something that is worthless to both the promisee and the promisor is gratuitous consideration. A contract based on such consideration is unenforceable. illegal consideration Consideration that contravenes the law, public policy, or the public interest. For example, the promise to physically harm someone in exchange for an item is illegal consideration. A contract based on such consideration is unenforceable. nominal consideration Consideration that is so small that it has no meaningful value in light of the performance or promise that it is being exchanged for. For example, when buying a $10 million business for only one dollar, the dollar is nominal consideration. Traditionally, courts did not consider the value of the consideration when determining the enforceability of a contract, but today a nominal consideration might be viewed as evidence that the contract is unconscionable or is, in reality, a gift rather than a contract. past consideration Consideration consisting of an act performed or promise given in the past. For example, the promise to pay a debt that one is already obligated to pay is past consideration. A contract based on such consideration is usually unenforceable because, typically, the original performance was done or the original promise was made for some reason other than to exchange it for the current performance or promise of the promisor.

sufficient consideration Consider-ation that is of a great enough value to be meaningful in light of the performance or promise that it is being exchanged for. valuable consideration Consideration that is of a great enough value to be meaningful in light of the performance or promise that it is being exchanged for and that has a measurable financial value to either the promisee or the promisor.

Privity Of Contract

1. THE DOCTRINE OF PRIVITY

"The doctrine of privity means that a contract cannot, as a general rule, confer rights or impose obligations arising under it on any person except the parties to it." (GH Treitel, The Law of Contract) The common law reasoned that: 1. Only a promisee may enforce the promise meaning that if the third party is not a promisee he is not privy to the contract. See:
y

Dunlop Tyre Co v Selfridge [1915] AC 847 - The plaintiffs sold tyres to Dew & Co, wholesale distributors, on terms that Dew would obtain an undertaking from retailers that they should not sell below the plaintiffs' list price. Dew sold some of the tyres to the defendants, who retailed them below list price. The plaintiffs sought an injunction and damages. The action failed because although there was a contract between the defendants and Dew, the plaintiffs were not a party to it and "only a person who is a party to a contract can sue on it," (per Lord Haldane).

2. There is the principle that consideration must move from the promisee. See:
y

Tweddle v Atkinson (1861) 1 B&S 393 - The fathers of a husband and wife agreed in writing that both should pay money to the husband, adding that the husband should have the power to sue them for the respective sums. The husband's claim against his wife's fathers' estate was dismissed, the court justifying the decision largely because no consideration moved from the husband.

Section 2: Adequacy of Consideration Adequacy of consideration refers to the fairness of the bargain. In general, a court will not question the adequacy of consideration if the consideration is legally sufficient. Under the doctrine of freedom of contract, parties are normally free to bargain as they wish. If people could sue merely because they had entered into an unwise contract, the courts would be overloaded with frivolous suits. In extreme cases, a court of law may consider the adequacy of consideration in terms of its amount or worth because

inadequate consideration may indicate fraud, duress, undue influence, or a lack of bargained-for exchange. It may also reflect a partys incompetence (for example, an individual might have been too intoxicated or simply too young to make a contract). Suppose Dylan has a house worth $100,000 and he sells it for $50,000. A $50,000 sale could indicate that the buyer unduly pressured Dylan into selling or that Dylan was defrauded into selling the house at far below market value. (It might also indicate that Dylan was in a hurry to sell.) In an equity suit, courts will more likely question the adequacy of consideration. (Remember from Chapter 1 that actions at law allow for remedies that consist of some form of compensation. Actions in equity allow for such remedies as specific performance, injunction, and rescission.) In an equity suit, the defendant must show that the transaction was not unconscionable (3) that is, generally speaking, so one sided under the circumstances as to be unfairand that consideration was exchanged. Adhesion contracts, for example, may be held unconscionable. As will be discussed in Chapter 16, these contracts are written for the benefit of one of the contracting parties onlythe dominant party. The adhesion contract (ordinarily a form contract) is presented to the other party, who must either agree to the dominant partys terms or put aside the deal. The adhesion contract is characterized by little, if any, actual bargaining between the parties.