Business Law - Contingent and Quasi Contracts

🎓 Course Title: Business Law - Contingent and Quasi Contracts

Headline: Preparing for Foundation / Intermediate Examinations of CA / CMA / CS / Business Exams (English and Hindi Languages)

Course Description:

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Understanding Contingent and Quasi Contracts:

This unit is a part of the comprehensive Study Livecourse, specifically designed to aid students preparing for the foundation or intermediate examinations in the fields of Chartered Accountancy (CA), Company Secretary (CS), and Cost & Management Accountancy (CMA). It also caters to business law enthusiasts and professionals.

Chapter 1: The Indian Contract Act, 1872

UNIT – 6: CONTINGENT AND QUASI CONTRACTS

Key Learning Outcomes:

🔹 Basic Characteristics of Contingent and Quasi Contracts: Gain a thorough understanding of how these types of contracts differ from simple contracts, and learn to distinguish between them.

🔹 Rules for Enforcement: Acquire knowledge about the conditions under which contingent contracts can be enforced, including the implications of future events and their occurrences or impossibilities.

Summary:

Contingent Contracts are agreements that depend on the happening or non-happening of a future event. These contracts are enforceable when such an event occurs or becomes impossible. The rules for enforcement include:

1. Enforceability upon Happening or Non-Happening of Future Events: A contingent contract becomes void if the event it hinges on cannot occur, or if that event has not happened by a specified time.

2. Impossibility at the Time of Contract: If an impossible future event is the basis of the contract at its inception, the contract itself may be considered void from the beginning (ab initio).

3. Wagering Contracts: These are generally void as they involve staking something of value on the outcome of a game or event where the parties have an equal chance of success.

Quasi Contracts Explained:

Quasi Contracts are unique in that they create obligations without a formal contract being present. They arise under the following circumstances, as enacted by the Indian Contract Act:

1. Supplying Necessaries to an Incapable Person: The supplier of goods or services necessary for life, health, family, housing, or clothing to a person who is incapable of contracting can claim payment from that individual's property.

2. Payment of Money Owed by Another: If one pays money on behalf of someone else who is obligated to pay it back, the initial payer is entitled to be reimbursed by the debtor's assets.

3. Enjoyment of Non-Gratuitous Acts: A person who benefits from an act that was not performed gratuitously is bound to compensate the person who carried out the act.

4. Finding Lost Property: A person who finds lost or abandoned property has the right to retain it, subject to certain conditions and responsibilities akin to those of a bailee.

5. Restoration or Repayment in Case of Mistake or Coercion: If payment is made or goods are delivered due to a mistake or under coercion, the recipient is obliged to make restoration or repayment to the other party.

Why Study Contingent and Quasi Contracts?

Understanding the nuances of contingent and quasi contracts is crucial for students preparing for professional exams as these concepts are frequently tested. They also form a significant part of business law, where such contracts are common. This unit will equip you with the knowledge to tackle these topics confidently in your examinations and apply this understanding in real-world business scenarios.

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