Test: Contingent And Quasi- 2 - CA Foundation MCQ

• Definition: The principle of quasi contract is a legal concept that allows courts to create a contractual relationship between parties even in the absence of a formal written contract.


• Unjust Benefit: The main purpose of quasi contracts is to prevent one party from retaining an unjust benefit at the expense of another party.


• Equity and Fairness: Quasi contracts are based on principles of equity and fairness, ensuring that parties are not unfairly enriched or disadvantaged in a transaction.


• Implied Obligations: In a quasi contract, the court imposes certain obligations on the parties involved to ensure that no one is unfairly disadvantaged by the lack of a formal contract.


• Legal Remedies: If one party has received an unjust benefit, the court may order restitution or payment to the other party to remedy the situation and uphold the principle of fairness.

• Definition: A quasi contract is a legal concept that allows courts to create obligations between parties similar to those in a contract, even though there was no formal agreement between the parties.


• Implied in Law: Quasi contracts are also known as contracts implied in law because they are not based on the intentions of the parties involved but are imposed by the court to prevent unjust enrichment.


• Elements: To establish a quasi contract, certain elements must be present, such as the plaintiff conferring a benefit on the defendant, the defendant acknowledging or accepting the benefit, and the defendant retaining the benefit under circumstances that make it unfair for them to do so without compensating the plaintiff.


• Remedy: The remedy in a quasi contract is typically restitution, where the party that received the benefit must pay the reasonable value of the benefit received to the party that conferred it.


• Examples: Common examples of quasi contracts include situations where someone pays for services or goods on behalf of another person without their consent, and the court orders the recipient to repay the amount owed.

• Definition: A contingent contract is a legal agreement that depends upon the occurrence of a specific event in the future.


• Performance: The performance of a contingent contract is not certain and is contingent upon the happening of a specific event.


• Example: An insurance contract is a common example of a contingent contract where the payment of the insurance claim is contingent upon the occurrence of an insured event.


• Enforceability: Contingent contracts are enforceable in court as long as the event upon which the contract is contingent is lawful.


• Legal Requirements: For a contingent contract to be valid, the event must be possible and not against public policy.

• Quasi Contract: In this scenario, the agreement between Ashok Kumar and Sachine can be considered as a quasi contract. Quasi contracts are not contracts in the traditional sense, but they are created by the law to prevent unjust enrichment of one party at the expense of the other. In this case, Ashok Kumar is providing training to Sachine, and he should be compensated for his services.


• Minor: Sachine is a minor, which means he is not of legal age to enter into a contract. However, since Ashok Kumar has agreed to provide training to Sachine, he can claim remuneration for his services under a quasi-contractual arrangement.


• Remuneration: The agreed remuneration of Rs. 10,000 per month shows that there is an understanding between both parties regarding the payment for the services provided by Ashok Kumar.


• Enforceability: While the contract may not be enforceable in a court of law due to Sachine's status as a minor, Ashok Kumar can still claim remuneration under the principle of quasi contract to avoid unjust enrichment.

• Claim for necessaries supplied to a person incompetent to contract: Under the Indian Contract Act, a person who is incompetent to contract (such as a minor or a person of unsound mind) can still be held liable to pay for necessaries supplied to them.


• Responsibility of finder of goods: The Act specifies the obligations of a person who finds goods belonging to another person, such as returning the goods to the rightful owner or taking reasonable care of the goods until they can be returned.


• Re-imbursement of money paid, due by another: If a person pays money on behalf of another person, the Act allows them to claim reimbursement from the person who was supposed to pay the money.


• Obligation of person enjoying benefit of non-gratuitous act: This refers to the obligation of a person who benefits from an act done by another person without expecting any payment in return. The Act allows for compensation to be claimed in such cases.

Therefore, all of the above quasi-contractual obligations are covered under the Indian Contract Act. Hence, the correct answer is option C: (i), (ii), (iii) & (iv).

• Promised Consideration: A promised to give Rs. 50,000 to B, contingent on B being selected as the President of Co-operative society.


• Contingent Contract: This is a contingent contract because the promise of payment is contingent upon a specific event (B being selected as President of Co-operative society).


• Legality: Contingent contracts are legal and enforceable as long as they do not involve illegal activities or considerations.


• Enforceability: If B is selected as the President of Co-operative society, A will be obligated to fulfill the promise of giving Rs. 50,000 to B.


• Conclusion: Therefore, the contract between A and B is a contingent contract and not void, illegal, or wagering contract.

• Contractual Agreement: A and B entered into a contract where A agrees to pay B a sum of money if a certain ship does not return.


• Ship Sinking: The ship in question is sunk, which means the condition for payment as per the contract has been met.


• Enforcement of Contract: B can enforce the contract when the ship sinks as the agreed-upon condition has been fulfilled.


• Claiming Damages: B can claim damages from A for failing to honor the contractual agreement.

Therefore, B has the right to enforce the contract and claim damages from A for not fulfilling their obligation after the ship sank.

• Suit for recession: This remedy allows the aggrieved party to cancel the contract and treat it as if it never existed.


• Suit for damages: The aggrieved party can claim monetary compensation for the losses suffered due to the breach of contract.


• Suit for specific performance: In some cases, the court may order the breaching party to fulfill their obligations under the contract as originally agreed.


• All of the above: The aggrieved party can choose any or all of these remedies depending on the circumstances of the breach.

Indian Contract Act 1872 was enacted on 1st September of that year. The law applied to almost all the states of India except Jammu & Kashmir.

• Implied contracts are the contracts that are not explicitly stated in words but are inferred from the circumstances or conduct of the parties involved.


• These contracts are created by the actions or behavior of the parties rather than through written or verbal agreements.

• Quasi contracts are legal agreements created by the courts to prevent unjust enrichment of one party at the expense of another.


• These contracts are not based on the intentions or agreements of the parties involved but are imposed by the law to ensure fairness and justice.

• Contingent contracts are agreements that depend on the occurrence of a certain event in the future for their performance.


• The rights and obligations of the parties are conditional upon the happening or non-happening of a specific event within a specified time frame.

• While implied and quasi contracts are contracts that are implied by law, contingent contracts are different as they are based on future events.


• Therefore, the correct answer to the question is option C: Quasi contract, as it specifically refers to contracts implied by law.

• Legal Principle: The legal principle states that when a person finds goods belonging to another person in a public place, the finder is under a duty to trace the owner and return the goods to him.


• Ownership: The finder does not become the owner of the goods by simply finding them in a public place.


• Responsibility: It is the moral and legal responsibility of the finder to make efforts to trace the owner and return the goods to them.


• Selling without tracing the owner: It is not permissible for the finder to sell the goods without making any efforts to trace the owner.


• Ethical Consideration: Returning the found goods to the rightful owner is not only a legal obligation but also an ethical responsibility towards the owner.

• Implied Promise: When V consumes U's goods left at V's place, it creates an implied promise to pay for those goods. This promise is not explicitly stated but is understood based on V's actions.


• Quasi-Contractual Obligations: In this scenario, V's act of consuming the goods falls under quasi-contractual obligations. Quasi-contracts are not true contracts but are legal obligations imposed by the court to prevent unjust enrichment.


• Legal Principle: The principle of quasi-contractual obligations applies here because V consumed the goods without U's explicit consent, and therefore, V is bound to pay for the goods consumed.


• Payment Obligation: V is legally obligated to compensate U for the goods consumed, even though there was no formal contract between them. This obligation arises to prevent V from benefiting unfairly at U's expense.

• Quasi Contract: A quasi contract is not a real contract, but rather a legal remedy that allows one party to recover compensation for providing goods or services to another party. In this scenario, there is a mutual promise between A and B, so it does not fall under the category of a quasi contract.


• Contingent contract: A contingent contract is a contract in which the performance of one party depends on the occurrence of a specific event. In this case, the payment is contingent on whether it rains or not, making it a contingent contract.


• Wagering contract: A wagering contract is a contract where two parties bet on the outcome of an uncertain event. In this situation, A and B are essentially betting on whether it will rain or not, so it falls under the category of a wagering contract.


• Voidable contract: A voidable contract is a contract that can be legally canceled by one of the parties. In this scenario, there is no indication that the contract is voidable, so this option is not applicable.

• Based on principles of equity, justice, and good conscience: Quasi contracts are based on the principle of equity, justice, and good conscience. These contracts are not formed by the parties' mutual consent but are imposed by the law to prevent unjust enrichment.


• Legal obligation: In a quasi contract, one party is obligated to provide a benefit to another party even though there is no formal agreement between them. This is done to prevent one party from unfairly benefiting at the expense of the other.


• Implied contract: Quasi contracts are often referred to as implied contracts because they are not explicitly agreed upon by the parties involved. The law implies the contract to ensure fairness and prevent any unjust enrichment.


• Remedy for unjust enrichment: Quasi contracts are a remedy for situations where one party has received a benefit at the expense of another party without any legal justification. The law steps in to create a contractual obligation to ensure that the party who received the benefit compensates the other party.


• Equitable solution: Quasi contracts are considered a way to provide an equitable solution when there is no formal contract in place. They are based on the principles of fairness, justice, and good conscience to prevent any party from being unfairly disadvantaged.

• Based on Equity, Justice, and Good Conscience: Quasi contracts are based on the principle of equity, justice, and good conscience. These contracts are not formed by mutual agreement but are imposed by law to prevent unjust enrichment.


• No Actual Contractual Agreement: Unlike traditional contracts, quasi contracts do not arise from a mutual agreement between parties. Instead, they are created by the court to ensure fairness and prevent one party from benefiting unfairly at the expense of another.


• Implied by Law: Quasi contracts are implied by law to prevent one party from unjustly enriching themselves at the expense of another. These contracts are created to ensure that justice is served and that parties are treated fairly in situations where no formal contract exists.


• Equitable Remedy: Quasi contracts are considered an equitable remedy in situations where one party has received a benefit at the expense of another without a valid contract in place. The court will intervene to ensure that the unjustly enriched party compensates the other party fairly.