Capacity of stranger to consideration

A Stranger to consideration can maintain suit

Quasi Contracts
When the obligations arising from transaction are such that can not be said as contractual but are still recognized and enforced like contracts, such transactions are called quasi contracts

Quasi Contracts

Example of Quasi Contract

Mr A, a grocery store manager, supplied grocery items to Mr B by mistake. However, he had a contract to supply it to Mr C. Mr B receives the goods and consumes it, here even if there is no contract between A and B, B will have to pay the price of the goods consumed on the basis of Quasi Contract between him and Mr A
Quasi Contracts

Cases which are treated as Quasi Contracts

Claims for necessities supplied to a person, incapable of contracting
The goods must be necessities Only the property of the incapable person is liable to pay
Quasi Contracts

Cases which are treated as Quasi Contracts (contd..)

Reimbursement to a person paying money due by another, of which he is interested
The person making payment should have a commercial interest It should not be voluntary Payment must have been made to third party

Quasi Contracts

Cases which are treated as Quasi Contracts (contd..)

Obligation of a person enjoying benefits of a non-gratuitous act
The thing must be done lawfully Intention must be non-gratuitous The other person must have enjoyed the benefits
Quasi Contracts

Cases which are treated as Quasi Contracts (contd..)

Responsibility of a finder of goods
Finder of goods must take care of it as any person with ordinary prudence will do.

Quasi Contracts

Cases which are treated as Quasi Contracts (contd..)

Liability of a person to whom money is paid, or thing delivered by mistake or coercion

Quasi Contracts

Cases which are treated as Quasi Contracts (contd..)

That is it!!!!!!

Performance of Contract
Meaning:Performance of contract means carrying out of obligations under it. The parties to the contract should either perform or offer to perform their respective promises unless such performance is dispensed by the provisions of any Indian Law
Performance of Contract

Offer to perform
It may happen that the promisor offers performance under contract at proper time, place, this is called tender or offer to perform.
If a valid tender is made and is not accepted by the promisee, the promisor will not be liable for non performance
Performance of Contract

Who must perform the promise

Promisor or legal representative of promisor In case where intention of the contract is to have performance by the promisor himself, than only promisor should perform
Performance of Contract

Who must perform the promise

If the promisor dies before the performance, his legal representative should perform In case where intention is to have performance by promisor only, then on his death, the contract comes to an end.
Performance of Contract

Performance of joint promises

Assignment of joint promises
All promisors jointly have to perform In case of any promisors death, his legal representative will have to perform In case of death of all promisors, all legal representative will have to perform
Performance of Contract

Performance of joint promises

Liability of Joint promisors
The promisee can compel anyone or more promisor to perform the whole contract

Performance of Contract

Performance of joint promises

Right to contribution amongst the promisors
If the promisee has compelled any one promisor or more promisor to perform the whole contract, they can recover the appropriate contribution from the remaining promisors
Performance of Contract

Contracts need not be performed

The parties may mutually agree to substitute the original contract by a new one or rescind it or alter it The promisee may dispense with or remit, wholly or in part the performance made to him Voidable contacts The promisee neglects or refuses to afford the promisor reasonable facilities to perform
Performance of Contract

Rules regarding time, place and manner of performance

Where time is specified
The promisor must perform it on the day fixed during the usual business hours

Where time is not specified

The promisor must perform in reasonable time
Performance of Contract

Appropriation of payments
Appropriation by debtor (s 59)
Where either express or implied intimation is given by debtor, then it must be appropriated to that particular debt

Appropriation by creditor (s 60)

Where the debtor has omitted to intimate and there are no other circumstances indicating to which debt payment is made, creditor may appropriate it to his discretion
Performance of Contract

Appropriation of payments
Where neither party appropriates (s 61)
Where neither party makes any appropriation, the payment is to be applied in discharge of the debts in order of time. If the debts are of equal standing, the payments is applied proportionately.
Performance of Contract

Discharge of Contracts
Performance Tender Mutual Consent Subsequent impossibility Operation of Law Breach
Discharge of Contracts

Discharge via performance or tender

Where both the parties have performed their obligations, the contract is discharged Where the promisor has offered for performance, but promisee has neglected it, the promisor can get discharge from his obligations
Discharge of Contracts

Discharge via mutual consent

Novation
Substitution of a new contract for the original one

Recission
Cancellation of all or some of the terms of contract

Alteration
Changing of some or all terms of contract

Discharge via mutual consent

Remission
It is the acceptance of lesser sum or fulfillment than what was contracted for.

Waiver
Where a party waives his rights under the contract, the other party is released from his obligations

Merger
Where an inferior right of a person coincides with a superior right of himself, the original contract is discharged

Discharge via subsequent impossibility

Destruction of the subject matter of contract Death of the parties Subsequent illegality Declaration of war Non existence or non occurrence of a state of things
Discharge of Contracts

Exceptions to subsequent impossibility

Difficulty of performance Commercial impossibility Non performance or failure to perform by a third party Strikes, lockouts and civil disturbances Failure of one of the object
Discharge of Contracts

Discharge Via Operation of Law

All voidable contracts can be discharged with appropriate law application Insolvency of any of the party to contract can discharge the contract Unauthorized alteration of terms and conditions of a contract can discharge the contract
Discharge of Contracts

Discharge Via Breach

A breach of contract is one partys failure without a legal excuse, to live up to any of its promises under a contract. Breach of contract may arise through
Anticipatory Breach Actual Breach
Discharge of Contracts (Breach)

Anticipatory Breach of Contract

The anticipatory breach of contract occurs when a party repudiates it before the time fixed for performance has arrived or when party by his own act disables himself from performing the contract
Discharge of Contracts (Breach)

Consequences of anticipatory breach

The other party can rescind the contract as treat the contract as at an end, and at once sue for damages He may elect not to rescind but to treat the contract operative and wait for the time of performance and then hold the other party liable for the consequences of nonperformance
Discharge of Contracts (Breach)

Case Study
A and B entered into a contract, where by A promised to load a cargo containing medicines into a ship on a particular date. Before that date, A refused to perform his duty. B did not rescind the contract but continued to demand A to perform his obligation. In a meanwhile, by operation of a law, export of such medicines were declared illegal and hence the contract was discharged
Discharge of Contracts (Breach)

Case Study
Can B sue A for damages on the grounds of Anticipatory breach of contract or not?

Discharge of Contracts (Breach)

 The anticipatory breach of contract does not by itself discharges the contract. The contract is discharged only when the aggrieved party accepts the repudiation of the contract. If the repudiation is not accepted and subsequently an event happens, rendering discharge, the party cannot claim for damages
Discharge of Contracts (Breach)

Actual Breach of Contracts

Failure to perform as promised Failure to perform means that one party must not have performed a material part of the contract. At the time when performance is due During the performance Making it impossible for the other party to perform
Discharge of Contracts (Breach)

Remedies for Breach of Contracts

The Indian Contracts Act provides basically two remedies for a breach

Rescission of the contract Damages for the loss sustained

Discharge of Contracts (Breach)

Rescission of the contract

In such case the aggrieved party is freed from all his obligations under the contract.

Discharge of Contracts (Breach)

Damages (s 75)
Compensation as general damages will be awarded only for those losses that directly result from the breach Compensation for losses indirectly caused by breach may be paid as special damages if the party making the breach had knowledge that such losses will follow the breach
Discharge of Contracts (Breach)

Damages (s75) contd..

The aggrieved party is required to take reasonable steps to keep his losses to minimum
He cannot claim to be compensated by the party in default for loss which is really not due to the breach but due to his own neglect to minimize loss after the breach
Discharge of Contracts (Breach)

Types of damages
Ordinary These damages are those which naturally arise in the usual course of things from such breach. The measure of ordinary damages is the difference between the contract price and the market price at the date of breach. Ordinary damages cannot be claimed for any remote or indirect loss caused by the breach
Discharge of Contracts (Breach)

Types of damages
Special damages When certain special or extraordinary circumstances present and their existence is communicated to the promisor, the nonperformance of the promise entitles the promisor to recover ordinary damages but also to the losses of these special circumstances
Discharge of Contracts (Breach)

Types of damages
Vindictive or punitive damages These damages are not just awarded to compensate the person who has suffered from breach but also to punish the person who has breached the contract. Applicable to the severity of the shock to the sentiments of the promisee
Discharge of Contracts (Breach)

Types of damages
Nominal damages
These are awarded in cases of breach of contract where there is only technical violation of the legal right but no substantial loss is caused.
Discharge of Contracts (Breach)