Contingent and Quasi Contracts (Part - 3) CA Foundation Notes | EduRev

Business Laws for CA Foundation

Created by: Sushil Kumar

CA Foundation : Contingent and Quasi Contracts (Part - 3) CA Foundation Notes | EduRev

The document Contingent and Quasi Contracts (Part - 3) CA Foundation Notes | EduRev is a part of the CA Foundation Course Business Laws for CA Foundation.
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Multiple Choice Questions

Question 1. A contract dependent on the happening or non-happening of future uncertain event, is

(a) Uncertain contract

(b) Contingent contract

(c) Void contract

(d) Voidable contract

Question 2. A contingent contract is

(a) Void

(b) Voidable

(c) Valid

(d) Illegal
Question 3. A contingent contract dependent on the happening of future uncertain even can be enforced when the event

(a) happens

(b) becomes impossible

(c) does not happen

(d) either of these

Question 4. A agrees to pay Rs. One lac to B if he brings on earth a star from sky. This is a contingent contract and

(a) Illegal

(b) Valid

(c) Voidable

(d) Void

Answers to MCQs

1 (b)
2 (c)
3 (a)
4 (d)

Theoretical Questions

Question 1: Explain the meaning of ‘Contingent Contracts’ and state the rules relating to such contracts.

Question 2: Explain the-term ‘Quasi Contracts’ and state their characteristics.

Answers to Theoretical Questions

1. Essential characteristics of a contingent contract: A contract may be absolute or contingent. A contract is said to be absolute when the promisor undertakes to perform the contract in all events. A contingent contract, on the other hand “is a contract to do or not to do something, if some event, collateral to such contract does or does not happening (Section 31). It is a contract in which the performance becomes due only upon the happening of some event which may or may not happen.

For example, A contracts to pay B Rs. 10,000 if he is elected President of a particular association. This is a contingent contract. The essential characteristics of a contingent contract may be listed as follows:

(i) There must be a contract to do or not to do something.

(ii) The performance of the contract must depend upon the happening or non-happening of some event.

(iii) The happening of the event is uncertain.

(iv) The even on which the performance is made to depend upon is an event collateral to the contract i.e. it does not form part of the reciprocal promises which constitute the contract. The even should neither be a performance promised, nor the consideration for the promise.

(v) The contingent even should not be the mere will of the promisor.

However, where the event is within the promisor’s will, but not merely his will, it may be a contingent contract.

The rules regarding the contingent contract are as follows”

(1) Contingent contract dependent on the happening of an uncertain future cannot be enforced until the even has happened. If the even becomes impossible, such contracts become void. (Sec.32).
(2) Where a contingent contract is to be performed if a particular event does not happening performance can be enforced only when happening of that even becomes impossible (Sec. 33).

(3) If a contract is contingent upon, how a person will act at an unspecified time the even shall be considered to become impossible; when such person does anything which renders it impossible that he should so act within any definite time or otherwise than under further contingencies. (Sec. 34,35).

(4) The contingent contracts to do or not to do anything if an impossible even happens, are void whether or not the fact is known to the parties (Sec. 36).

2. Quasi Contracts: Under certain special circumstances obligation resembling those created by a contract are imposed by law although the parties have never entered into a contract. Such obligations imposed by law are referred to as ‘Quasi-contracts’. Such a contract resembles with a contract so far as result or effect is concerned but it has little or no anity with a contract in respect of mode of creation. These contracts are based on the doctrine that a person shall not be allowed to enrich himself unjustly at the expense of another. The salient features of a quasi-contract are :

1. It does not arise from any agreement of the parties concerned but is imposed by law.

2. Duty and not promise is the basis of such contract.
3. The right under it is always a right to money and generally though not always to a liquidated sum of money.

4. Such a right is available against speciffic person(s) and not against the whole world.

5. A suit for its breach may be filed in the same way as in case of a complete contract.

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