Legal Llama

  QUASI CONTRACTS OR CERTAIN RELATIONS RESEMBLING THOSE CREATED BY CONTRACT Chapter V (Sections 68-72) of the Indian Contract Act, 1872 deals with "certain relations resembling those created by contract". It incorporates those obligations which are known as "Quasi Contracts" under English law. In various situations mentioned in that Chapter, a person is obliged to compensate another although the basis of this obligation is neither a contract between the parties, nor any tort on the part of the person who is bound to compensate. The basis of the obligation is that no one should have unjust benefit at the cost of the other. If A gets unjust enrichment at the cost of B, A has an obligation to compensate B for the same. For instance, A and B jointly owe 100 rupees to C. A alone pays the amount to C and B, not knowing this fact, pays 100 rupees over again to C. C is bound to repay the amount to B.¹ In an action for unjust enrichment, the following essentials have to be...

REMISSION OF PERFORMANCE (SECTION 63) Section 63 enables the promisee to agree to dispense with or remit performance of promise. The Section reads as under: "63. Promisee may dispense with or remit performance of promise. Every promisee may dispense with or remit, wholly or in part, the performance of the promise made to him, or may extend the time for such performance, or may accept instead of it any satisfaction which he thinks fit." Illustrations (a)    A promises to paint a picture for B. B afterwards forbids him to do so. A is no longer bound to perform the promise. (b)    A owes B 5,000 rupees. A pays to B and B accepts, in satisfaction of the whole debt, 2,000 rupees paid at the time and place at which 5,000 rupees were payable. The whole debt is discharged. (c)    A owes B 5,000 rupees, C pays to B 1,000 rupees, and B accepts them in satisfaction of his claim on A. This payment is a discharge of the whole claim. (d)    A owes B...

Discharge by Agreement and Novation (Section 62) Sections 62 and 63 deal with contracts in which the obligation of the parties to it may end by the consent of the parties. Novation Novation means substitution of an existing contract with a new one. When, by an agreement between the parties to a contract, a new contract replaces an existing one, the already existing contract is thereby discharged, and in its place the obligation of the parties in respect of the new contract comes into existence. Section 62 contains the following provision in this regard: "Effect of novation, rescission and alteration of contract. If the parties to a contract agree to substitute a new contract for it or to rescind or alter it, the original contract need not be performed." Novation is of two kinds: (1) Novation by change in the terms of the contract, and (2) Novation by change in the parties to the contract. (i)      Change in the terms of the contract The parties to a...

IMPOSSIBILITY OF PERFORMANCE/FRUSTRATION OF CONTRACT When an agreement, which was binding on the parties to it, ceases to bind them, the contract is said to be discharged. A contract may be discharged in the following ways- (1) By Performance of the contract (2) By Breach of the contract (3) By Impossibility of performance (4) By Agreement and Novation   (3) Discharge by impossibility of performance If the performance of a contract is impossible, the same is void. Section 56, deals with this question. The first paragraph of Section 56 provides that an agreement to do an act impossible in itself is void. The second paragraph provides that a contract to do an act, which becomes unenforceable, if the act becomes: (a) impossible; or (b) for reason of some event which the promiser could not prevent. This Section also provides that it becomes so unenforceable when the act becomes impossible or unlawful. 1. Initial Impossibility Section 56 says: "An to do an act impos...

  DISCHARGE OF CONTRACT/ BREACH OF THE CONTRACT/ ANTICIPATORY BREACH OF CONTRACT When an agreement, which was binding on the parties to it, ceases to bind them, the contract is said to be discharged. A contract may be discharged in the following ways- (1) By Performance of the contract (2) By Breach of the contract (3) By Impossibility of performance (4) By Agreement and Novation   1)       Discharge by performance Each party to a contract is bound to perform his part of the obligation. After the parties have made due performance of the contract, their liability under the contract comes to an end. In such case, the contract is said to be discharged by performance. In regard to such a discharged contract, nothing remains-neither any right to see performance nor any obligation to perform. In short, here cannot be any dispute. 2)       Discharge by Breach of Contract When a party having a duty to perform a con...