1. Indian Contract Act
The Main Structure of the Indian Contract Act, 1872
General Rules Preliminary – Sections 1
pertaining to and 2 [Short title, extent,
contracts commencement and
(Sections 1 to 75) interpretation clause].
Proposals, acceptance,
communication and
revocation of proposals
[Sections 3 to 9]
Voidable Contracts and
Void agreements, free
consents, capacities of
parties etc.
[Sections 10 to 30]
Contingent Contracts
[Sections 31 to 36]
Performance of Contracts
[Sections 37 to 67]
Quasi Contracts
[Sections 37 to 67]
Breach of contracts and
remedies for breach of
contracts.
[Sections 73 to 75]
[II] Special Types of (1) Contracts of Indemnity
Contracts and Guarantee
[Sections 124 to 238] [Sections 124 to 147]
(2) Principles of Contract of
Bailment
[Sections 148 to 181]
(3) Contract of Agency
[Sections 182 to 238]
1 Dr Subhash Gupta

2. Indian Contract Act
Distinction Between an Agreement and a Contract:
Agreement Contract
Every promise and every An agreement enforceable
set of promises, forming by law is a contract
the consideration for each [Section 2(h)]. Merely
other is an agreement. agreement is not a contract
[Section 2(e)]. For but its enforceability at law
constituting an agreement, together constitutes a
an offer by one party and contract.
its acceptance by other
party are required. In other Thus,
words an offer and its Contract=Agreement + its
acceptance together Enforceability at law
constitute an agreement.
Thus,
Agreement=Offer + its
acceptance
For constituting an
An agreement becomes a
agreement, a promise or contract only when such
sets of promise forming agreement fulfills all the
consideration for each legal conditions of a
other are required. contract e.g. formation of
legal relationship, free
consent, lawful object, etc.
An agreement is a wider A contract is specie of an
concept than that of a agreement and as such it is
contract a narrower concept.
Therefore, it is said that
every contract is an
agreement but every
agreement is not
necessarily a contract.
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3. Indian Contract Act
It is not necessary that Every contract necessarily
every agreement must creates a legal obligation
create legal obligation because every contract is
because all agreements do basically an agreement.
not go to constitute
contracts
An agreement cannot be A contract is always
concluding or a binding concluding and binding on
contract the concerned parties.
Section 10 states that all agreements are contracts if
they are made by the free consent of parties
competent to contract, for a lawful consideration and
with a lawful object and are not hereby expressly
declared to be void. Thus, an agreement must
possess certain elements to become a contract.
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4. Indian Contract Act
Essential elements of a valid contract:
Section 10 states that all agreements are contracts if
they are made by the free consent of parties
competent to contract, for a lawful consideration and
with a lawful object and are not hereby expressly
declared to be void. Thus, an agreement must
possess certain elements to become a contract.
Following are the essential elements of a valid
contract:
(a)There must be an agreement,
(b)Parties to a contract must be
competent,
(c)There should be an intention to create a
legal relationship,
(d)There must be free consent of parties to
the agreement,
(e)Lawful consideration,
(f) Legal or lawful object.
(g)Agreement not expressly declared void
by law,
(h)Compliance with legal formalities,
(i) Certainty and possibility of
performance.
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5. Indian Contract Act
Classification of contracts
(i) On the basis of
mode of formation
(a) Express contracts
(b) Implied contracts
(c) Quasi contracts
(ii) On the basis of
execution or performance
(d) Executed contracts,
(e) Executory contracts
(f) Unilateral contracts
(g) Bilateral contracts
(iii) On the basis of the
form of contracts
(h) Formal contracts &
(i) Simple Contract
(iv) On the basis
of validity or
enforceability.
(j)Valid contracts,
(k)Void contracts,
(l)Voidable
contracts,
(m)Illegal
contracts,
(n)Unenforceable
contracts
5 Dr Subhash Gupta

6. Indian Contract Act
Essentials or rules of a valid offer:
The Indian Contract Act, 1872 contains certain legal
rules or essentials regarding proposals or offers
which are as under:-
(a)Terms of an offer must be clear, specific or
definite, certain and not loose or vague.
(b)An offer must create legal relationship.
(c)An offer must be communicated to the person
to whom it is made.
(d)Intention of offer must be to obtain the
consent or assent.
(e)Offer may be express or implied; general or
specific. It may also be positive or negative.
(f) An offer should not include any term or
terms of non-compliance that may be
assumed to lead acceptance.
(g)A statement of price is not an offer.
(h)An offer is different from an invitation to an
offer.
(i) Two identical cross-offers do not constitute
a contract.
(j) An offer can be made subject to any terms
and conditions.
6 Dr Subhash Gupta

7. Indian Contract Act
Lapse of an Offer:
(a) An offer lapses if not accepted in the mode
prescribed by an offer
(b) An offer lapses after stipulated or reasonable
time
(c) An offer lapses by revocation
(d) An offer lapses because of subsequent illegality
or destruction of subject matter
(e) Lapse of an offer by rejection
Legal rules or essentials of a valid acceptance:
(a) Acceptance must not be qualified.
(b) Acceptance may be express or implied.
(c) Acceptance must be communicated to the
offeror.
(d) Acceptance may be given for the offer that has
been communicated.
(e) Acceptance must be in the mode prescribed or
usual and reasonable mode.
(f) Acceptance must be communicated within a
reasonable time.
(g) Silence is not considered as a mode of
acceptance.
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8. Indian Contract Act
(h) Acceptance of the proposal means acceptance of
all terms of the offer made by the proposer.
(i) If a principal makes a proposal through his
agent, it is enough if the acceptance is
communicated to the agent.
(j) Acceptance must be communicated before the
offer lapses or before it is withdrawn.
(k) Acceptance must always be given by the party or
parties to whom the offer is made.
(l) Acceptance must make a clear intention on the
part of the promisee to fulfill the terms of the
promise given. An acceptance to do something
which a person (promisee) has no intention to
perform is not a valid acceptance.
(m) If an acceptance is given by a person which is
subject to certain condition e.g. subject to formal
contract or subject to contract to be approved by
solicitors or subjects to contract, no contract can
be formed till a formal contract is entered into or
permission of the concerned persons is obtained.
8 Dr Subhash Gupta

9. Indian Contract Act
Essential elements of a valid or lawful consideration:
Consideration is nothing but some act or forbearance
or promise, suffered or done or made by the promisee
for the promise. But every act or forbearance is not a
consideration unless it possesses certain essential
elements which are noted down below:-
(a)Consideration may be an act to do something
or abstinence or forbearance of doing
something.
(b)Consideration may be past, present or future.
(c)Consideration must be real and not illusory.
(d)Consideration should move at the desire of
the promisor.
(e)Consideration may move from any person
including the prormisee.
(f) For supporting each independent promise,
there must be an independent consideration.
(g)Consideration need not be adequate.
(h)Consideration must be something that the
promisor is not already bound to do.
(i) Consideration must be valuable in the eyes
of law.
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10. Indian Contract Act
Exceptions to the rule of
“No consideration, no contract”:
(a) Promise made on account of love and affection
(b) Promise for compensation of voluntary services
(c) Promise to pay any time bared debt
(d) Contract of Agency
(e) Completed gifts
Exceptions to the rule of
NO CONSIDERATION, NO CONTRACT
Promises made on Contracts of
account of love and Completed gifts
affection
Promises for Contract of
Compensating Agency
voluntary services
Promises to pay
time-barred debts
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11. Indian Contract Act
Kinds of Consideration:
There are following five kinds of consideration:
1. Present or Executed Consideration.
2. Past Consideration.
3. Future or Executory Consideration.
4. Unlawful Consideration.
(i) When forbidden by law.
(ii) When defeat the provisions of law
(iii) When they are fraudulent
(iv) When cause injury to other persons or
their property.
(v) When opposed to public policy.
5. Illusory or Unreal Consideration.
Capacity of Parties
All agreements are contracts provided that:
(a) they are made by the free consent of parties
(b) these parties must be competent to contract
(c) the contract must be for a lawful consideration
and with a lawful object and
(d) they must not be expressly declared to be void.
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12. Indian Contract Act
Agreement with the minors:
(a) Agreement with or by a minor is absolutely void
(b) No Ratification of Minor’s contract
(c) A minor can be a promisee
(d) No restitution in agreements with a minor
(e) Minor’s Insolvency
(f) No estoppel in the case of a minor
(g) Minor as a partner
(h) A minor as an agent
(i) A person working as a surety for a minor
(j) Liability of a minor for necessities
(k) Responsibility of parents or guardians of a minor
(l) Liability of a minor for torts (civil wrong)
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13. Indian Contract Act
Types of Unsound Mind
(i) Permanent Unsoundness (ii) Temporary
(1)Illness
(2)Shock
(3)Accidental
(4)Intoxication
(a) Congenital (b) Non-Congenital
i.e. right from birth
(i) Accidental (ii) Disease
Persons disqualified from contracting by the law:
(a) Alien enemies,
(b) Foreign sovereigns, their diplomatic staff and
accredited representatives;
(c) Insolvents,
(d) Convicts,
(e) Corporations.
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14. Indian Contract Act
Consent is said to be free when it is not caused by :
(1) Coercion, as defined in Section 15, or
(2) Undue influence, as defined in Section 16, or
(3) Fraud, as defined in Section 17, or
(4) Misrepresentation, as defined in Section 18, or
(5) Mistake, subject to the provisions of Sections 20,
21 and 22.
Coercion:
“Coercion” is the committing, or threatening to
commit, any act forbidden by the Indian Penal Code or
the unlawful detaining, or threatening to detain, any
property, to the prejudice of any person whatever,
with the intention of causing any person to enter into
an agreement.
Characteristics of Coercion:
(a)Coercion implies committing or threatening to
commit any act forbidden by the Indian Penal
Code.
(b)Coercion also implies the unlawful detaining or
threatening to detain the property of another
person.
(c)The act of coercion must have been performed
with the intention of causing any person to enter
into an agreement.
(d)It is not necessary that the coercion must be
applied by a party to the contract. It also can be
applied by a stranger.
(e)It is not necessary that the Indian Penal Code
should be in force at the place where the
coercion is applied. Following famous
illustration will make this characteristic very
clear.
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15. Indian Contract Act
Undue Influence :
(1) A contact is said to be induced by ‘undue
influence’ where the relations subsisting between the
parties are such that one of the parties is in a position
to dominate the will of the other and uses that
position to obtain an unfair advantage over the other.
(2) In particular and without prejudice to the generality
of the ‘foregoing principle, a person is deemed to be
in a position to dominate the will of another:
(a)Where he holds a real or apparent authority
over the other or where he stands in a
fiduciary relation to the other; or
(b)Whether he makes a contract with a person
whose mental capacity is temporarily or
permanently affected by reason of age,
illness, or mental or bodily distress.
(3) Where a person who is in a position to dominate
the will of another, enters into a contract with him, and
the transaction appears, on the face of it or on the
evidence adduced, to be unconscionable, the burden
of proving that such contract was not induced by
undue influence shall lie upon the person in a position
to dominate the will of the other.
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16. Indian Contract Act
Important elements of undue influence:
(a)The relations subsisting between the parties to
a contract are such that one of them is in a
position to dominate the will of the other;
(b)The dominant party uses his position to obtain
an unfair advantage over the party;
(c)The dominant party may hold a real or an
apparent authority over the other party, and
contract is entered into by using an undue
influence.
Important points of Distinction between Coercion and
Undue Influence:
(a)In coercion, some criminal act is involved while
in undue influence, criminal act is not
involved.
(b)Coercion is mainly of a physical character
whereas undue influence is of a moral
character. Therefore, sometimes, undue
influence is called as moral coercion.
(c)In coercion, the consent of an aggrieved party
is obtained by committing or threatening to
commit an act forbidden by the Indian Penal
Code or detaining or threatening to detain
properly unlawfully. In undue influence, the
consent of an aggrieved party is obtained
under moral influence. Person obtaining the
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17. Indian Contract Act
consent takes the undue advantage of his
position.
(d)In coercion, intention is always there to induce
someone to enter into an agreement.
In undue influence, the party which uses his
influence uses his position to obtain certain
advantage at the cost of other party.
(e)In coercion, it is not necessary that there should
be some relationship between the promisor
and the promisee. But in undue influence, there
always exists some sort of relationship between
the parties to the agreement. Such relationship
can be fiduciary or paternal.
Essential elements of Fraud:
(a) There must be a false representation.
(b) It must be done by the party or his agent.
(c) The representation must relate to a fact.
(d) The other party must have been attracted to act
upon the representation leading to a fraud.
(e) The representation intentionally done to commit a
fraud must have been done before the conclusion
of the contract.
(f) The other party must have relied upon the
representation intentionally done to commit a
fraud and thereby must have been deceived.
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18. Indian Contract Act
Effects of fraud and remedies
The party defrauded can exercise any of the following
rights:
(a)As a contract induced by fraud is viodable at
the option of the party defrauded, he can
avoid or rescind the contract but he must do
so within a reasonable time.
(b)The party defraud can sue for the damages
suffered or ask for the restitution.
(c)The party can insist for the performance of
the contract on the condition that the other
party shall take necessary steps to put the
defrauded party in a position in which it
would have been if the representation made
had been true.
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19. Indian Contract Act
Mistake
Mistake of Law Mistake of fact
(Section 21) (Section 20)
Mistake of Law Of the country Unilateral Bilateral
mistake mistake
Mistake of Law of the of the foreign country
Mistake as to possibility of
performing the Contract Mistake as to the subject
matter regarding
(1)Existence
(5) Subject matter
(2) Identity
(3) Quantity (6) Title
(4) Quality (7) Price
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20. Indian Contract Act
FLAWS IN CONSENT
Flaws in (A) Coercion [Section 15]
Consent (B) Undue Influence [Section16]
(C) Fraud [Section 17]
(D) Misrepresentation [Section 18]
(1) By positive statement
or assertion
(2) By breach of duty
(3) By causing a
mistake by innocent
misrepresentation
(E) Mistake of Law and Fact
[Sections 20 and 21]
Legality of Object and Consideration
(i) It is forbidden by law; or
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21. Indian Contract Act
(ii) It is of such nature that, if permitted, it would
defeat the provisions of any law; or
(iii) It is fraudulent; or
(iv) It involves or implies injury to the person or
property of another; or
(v) The court regards it as immoral; or
(vi) The court regards it as opposed to public policy.
(VI) When the court regards a consideration or an
object of an agreement as opposed to public
policy, such agreement is unlawful:
(1)Agreements to commit crimes are void. If
the consideration is an agreement is to
commit any crime, such agreement is
opposed to the public policy.
(2)Agreements with enemies are void. If
someone enters into an agreement with
enemies to trade in goods without prior
permission and without obtaining license
from the proper authority of Indian
Government, such agreement is void.
(3)An agreement barring a right of legal
proceedings of any person is void [Sec. 28].
(4)An agreement is restraint of trade is void.
Every person has a right to carry on lawful
trade or business or to do any lawful
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22. Indian Contract Act
occupation and therefore agreements
entered into a restraint of trade are void
[Section 27].
(5)Wagering agreements are not only void but
illegal. This means the agreements to pay
money or money’s worth as happening or
non-happening, of particular event or events
are void. No suit can be filed to recover
anything alleged to be won on the wager.
(6)Agreements interfering an administration of
justice are void. Such agreement may take
any of the following forms:
(a)Stifling prosecution: Any agreement not to
prosecute an offender or criminal is an
agreement for stifling prosecution and
therefore unlawful and void.
(b)Interference with the course of justice:
An agreement obstructing or interfering
the ordinary process and procedure of
justice is unlawful and void e.g.
agreements of giving bribes,
threatening the witnesses, pleaders etc.
(2)Agreements by way of champerty and
maintenance are not absolutely void. If the
object of entering into such agreements is
not immoral, they are valid. An agreement
whereby one person agrees to assist
another in the process of recovering money
or any other property and to share the
proceeds thus acquired is called champerty.
When a person has no legal interest in the
subject matter but still he agrees to give
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23. Indian Contract Act
some sort of assistance to help the other
person to bring a legal action, this is known
as maintenance.
(3)Agreements tending to create interest
opposed to duty are unlawful. If any person
enters into an agreement whereby he is
supposed to do something which is opposed
to his duty, such agreement is void.
(4)The agreements not to plead to bar of
limitation to claims are void as they defeat
the provisions of the law of limitation.
(5)Agreements interfering with marital duties
are unlawful and therefore void. These
agreements include promises by married
person to marry during the lifetime or after
the death of their wives, agreements to lend
money to women in consideration of their
getting divorces and marrying the lenders etc.
(6)An agreement which a person promises in
return to procure the marriage of another
person for some monetary consideration is
void as it is opposed to public policy.
(7)According to Section 26 of the Act, every
agreement in restraint of the marriage of any
person, other than a minor, is void as the law
considers marriage as the right of every
person.
Void Agreements
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24. Indian Contract Act
All agreements entered into are not enforceable by
law. The agreements which are not enforceable by
law are said to be void [Section 2(g)] such
agreements do not give rise to any legal
consequences. All agreements that are opposed to
public policy are void.
Following agreements have been expressly
declared to be void by the Contract Act:
(1)Agreements by incompetent parties [Sec. 11]
(2)Agreements made under mutual mistake of
facts [Section 20].
(3)Agreements the consideration or object of
which is unlawful [Section 23].
(4)Agreements the consideration or object is
partly unlawful [Section 24].
(5)Agreements entered into without any
consideration [Section 25].
(6)Agreements made in restraint of marriages
[Section 26].
(7)Agreements made in restraint of trade,
business, occupation [Section 27].
(8)Agreements in restraint of legal proceedings
[Section 28].
(9)All agreements the, meaning of which is not
certain [Section 29].
(10)Wagering agreements [Section 30].
(11)Agreements contingent on impossible events
[Section 36].
(12)Agreements to do an act impossible in itself
[Section 56].
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25. Indian Contract Act
Distinction between a-wagering agreement and a
contingent contract:-
A Wagering Agreement Contingent Contract
A wagering agreement is an It is a contract to do or not to
agreement between two parties do something, if some event,
wherein one party promises to collateral to such contract,
pay money or money’s worth does or does not happen.
on happening of some [Section 31].
uncertain event in
consideration of other party’s
promise to pay if that event
does not take place [Section
30].
Every wagering agreement is of Every contingent contract
a contingent nature. may not be of a wagering
nature.
A wagering agreement is A contingent contract is valid.
absolutely void and illegal.
Wagering agreements always Contingent contract may not
consist of reciprocal promises. contain reciprocal promises.
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26. Indian Contract Act
The future event is the sole In a contingent contract, the
determining factor in a future event is collateral.
wagering agreement.
Except for winning or losing of Parties to a contingent
money or money’s worth, the contract have some interest in
parties to a wagering the subject matter. In the
agreement have no other absence of such interest in
interest in the subject matter. the subject matter, a
contingent contract may turn
to be of a wagering nature.
In a wagering contract, none of In a contingent contract,
the parties intends to perform parties intend to perform the
the contract itself. They are contract itself.
only interested to pay or
receive money or money’s
worth and therefore a wagering
agreement is considered as a
game of change.
Contracts which need not be performed.
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27. Indian Contract Act
1. When performance of a contract becomes
impossible, such contract need not be performed,
[Section 56].
2. When there is an agreement between the parties to
a contract to substitute a new contract for it or to
rescind the old contract or after it, there is no need
to perform the original contract [Section 62].
3. When 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 except instead of it any
satisfaction which he thinks fit, such contract need
not be performed [Section 63].
4. When a person, at whose option a contract is
voidable, rescinds it, the other party thereto need
not perform any promise contained therein in which
he is promisor. Such contract need not be
performed [Section 64].
5. If any promisee neglects or refuses to afford the
promisor reasonable facilities for performance of
his promise, the promisor is excused by such
neglect or refusal as to non-performance caused
thereby.
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28. Indian Contract Act
Who may perform the contract ?
(a) Promisor [Section 40].
(b) Agent [Section 40].
(c) Legal representative [Section 37(2)].
(d) Third person [Section 41].
(e) Joint promisor [Section 42 to 44].
Time and place of performance of a contract:
(a) Performance of promise within a reasonable
time.
(b) Performance of promise where time and place
is specified.
(c) Application of performance at proper time and
place i.e. on a certain day and at a certain
place.
(d) Promisor to apply to the promisee to appoint a
place for performance of promise.
(e) Manner or time by promisee to perform a
promise.
Time of performance of contract:
(a) Where time is the essence of the contract.
(b) When time is not the essence of the contract.
Discharge of Contract
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29. Indian Contract Act
A contract is said to be discharged, terminated or
dissolved when the rights and obligations created by
that contract come to an end. Discharge of contract
means termination of the relationship between the
parties to a contract.
A contract may be discharged or dissolved in any one
of the following:
(a)By performance of the contract
(b)By agreement.
(c)By lapse of time.
(d)By operation of law.
(e)By breach made by any party to contract.
(f) By assignment.
(g)By impossibility of performance.
(h)By material alternation without the consent of
the concerned party.
Discharge of a contract by agreement or consent:
(1)By novation [Section 62].
(2)By recission [Section 62].
(3)By alteration [Section 62].
(4)By remission [Section 63].
(5)By waiver.
(6)By merger.
(7)By owing to the occurrence of an event.
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30. Indian Contract Act
Discharge of contract by operation of law:
(a)Death: In contracts where personal skill or taste or
ability is required, the death of the promisor results
in termination of contracts. In other contracts
where the personal skill or ability is not required,
the rights and the liabilities of the deceased person
pass on to the legal representative(s) as the case
may be.
(b)Insolvency: When a person is declared insolvent,
he is released from performing his part of the
contract by law. Thus, an insolvent is discharged
from all liabilities incurred prior to his adjudication.
(c)Merger: It implies that an inferior right accruing to
the party to a contract merges into a superior right
accruing to the same party under the same or other
contract.
(d)Complete loss of evidence: If the evidence proving
the existence of a contract is lost, it stands
terminated.
(e)When the rights and liabilities vest in one and the
same person, a contract stands terminated e.g., If a
bill of exchange is received by its acceptor, other
parties are discharged.
Discharge of contract by breach:
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31. Indian Contract Act
(1)Actual breach: It means breach committed by either
at the time when the performance of the contract is
due or during its performance. Actual breach is
also known as present breach.
(2)Anticipatory breach: It implies repudiation of an
integral part of the contract by the promisor before
the actual date of performing the contract [Section
39].
Discharge of contract by assignment:
Discharge of contract by impossibility of
performance:
i. Destruction of subject matter.
ii. Death or incapacity of personal service.
iii.Non-existence of a particular state of things.
iv.Non-occurrence of a particular state of
things.
v. Out-break of war.
vi.Change of law.
Discharge of contract by material alteration:
Remedies for Breach of a Contract:
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32. Indian Contract Act
(a)Recession of the contract.
(b)Suit for damages.
i. Ordinary damages
ii. Special damages.
iii. Nominal damages.
iv. Vindictive damages.
v. Damages agreed in advance.
vi. Damages of loss of reputation.
(c)Quantum meruit.
(d)Suit for specific performance.
(e)Suit for injunction
Specific performance is not granted in the following
cases:
(1)Where damages are an adequate remedy for
breach.
(2)Where the contract is in its nature revocable.
(3)Where the contract is uncertain.
(4)When the contract is entered into by trustees in
breach of their trust.
(5)Where the contract is inequitable to either
party.
(6)Where it is not possible for the Court to
supervise the contract.
(7)When a company makes any contract using
the powers not conferred on it by its
Memorandum of Association.
Kinds of Quasi-contracts:
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33. Indian Contract Act
There are five kinds of quasi-contractual obligations:
(a)Supply of necessaries [Section 68].
(b)Reimbursement of payment by an interested
person [Section 69].
(c)Liability of payment for non-gratuitous acts
[Section 70].
(d)Responsibility of a finder of goods [Sec. 71].
(e)Payment of money by mistake or coercion
[Section 72].
Distinction between a contract and a quasi-contract:
Contract Quasi-Contract
1. An agreement 1. Quasi-Contract is
enforceable by law is a nothing but certain
contract [Section 2(h)]. relations resembling
those created by a
contract and it is not
actually a contract.
2. A contract basically 2. There is no agreement
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34. Indian Contract Act
requires an at all in the quasi-
agreement. contract
3. A contract results from 3. Quasi-Contract is itself
the will of parties an obligation
expressed with a view resembling that created
to create certain by a contract.
obligation.
4. There are various 4. There are no such
essential elements essential elements
required for a valid required for formation
contract. of a quasi contract.
5. A contract is always 5. A Quasi-Contract is not
full-fledged and is full-fledged but it is an
binding on those who implied contract.
enter into the contract. Strictly speaking, a
Quasi-Contract is not a
contract not in fact but
in law.
Distinction between a Contract and a Quasi Contract:
Contingent Contract Quasi-Contract
34 Dr Subhash Gupta

35. Indian Contract Act
A contingent contract is a Under certain conditions, the
contract to do or not to do law creates and enforces legal
something, if some event, rights and obligations when no
collateral to such contract, real contract exists. Such
does or does not happen. obligations are known as quasi
[Section 31]. contract. The contract Act
describes Quasi-Contracts as
certain relations resembling
those contracts.
In a contingent contract, In a Quasi-Contract, benefit of
performance of a contract an act done by one person is
depends upon happening or taken by some other person.
not happening of some event in That person acts on his own
the future. but expects certain return.
A contingent contract is a A Quasi-Contract is a contract is
contract in fact. law.
In a contingent contract, there In a Quasi-Contract, there is
is the responsibility to perform always equitable obligation
legal obligation. alongwith legal obligation as it
rests on the ground of equity.
A contingent contract is a valid A Quasi-Contract in the strict
contract. sense is not a contract at all.
35 Dr Subhash Gupta