CERTAIN RELATIONS RESEMBLING THOSE CREATED BY CONTRACT

by | Nov 10, 2023

CERTAIN RELATIONS RESEMBLING THOSE CREATED BY CONTRACT

Contracts play a vital role in our daily lives, governing various agreements and transactions. Under the Indian Contract Act, certain relations that resemble contracts are recognized and regulated. 

  • Quasi Contracts: Quasi contracts are legal obligations that arise in the absence of a formal contract. These obligations are imposed by law to prevent unjust enrichment. For instance, if someone provides goods or services to another person on the assumption that payment will be made, even if no formal agreement exists, the Indian Contract Act enables the provider to seek compensation. 
  • Quasi Partnership: A quasi partnership refers to a business relationship where two or more individuals operate a business without entering into a formal partnership agreement. Though not recognized as a legal partnership, the Indian Contract Act extends certain rights and obligations to the parties involved, providing a framework for regulating such relationships. 
  • Bailment: Bailment is a relationship where one person (the bailor) delivers goods to another person (the bailee) for a specific purpose and duration. The bailee is expected to take care of the goods while they are in their possession and return them as agreed upon. The Indian Contract Act establishes the rights and responsibilities of both the bailor and bailee in such arrangements.

RELEVANT PROVISIONS – 

  1. SECTION 68 (Claim for necessaries supplied to a person incapable of contracting, or on his account) : This refers to situations where goods or services deemed necessary for an individual are provided to them, even if they are incapable of entering into a contract. The person who supplied these necessaries can make a claim against the individual or their legal representative to recover the costs incurred.
  2. SECTION 69 (Reimbursement of a person paying money due by another, in payment of which he is interested) : If someone pays money on behalf of another person, where the payment relates to a debt or obligation that the payer has an interest in, they are entitled to seek reimbursement from the person who actually owes the money. Essentially, the payer can recover the amount paid on behalf of the debtor. 
  3. SECTION 70 (Obligation of a person enjoying the benefit of a non-gratuitous act) : This refers to a situation where someone benefits from an act or service performed by another person, which is not done out of kindness or generosity (i.e., non-gratuitous). In such cases, the person benefiting from the act is under an obligation to compensate or repay the person who performed the act. 
  4. SECTION 71 (Responsibility of a finder of goods) : If someone finds lost goods belonging to another person and takes possession of them, they have certain responsibilities. They must make reasonable efforts to locate the true owner and return the goods. If they fail to do so, they may be held liable for any loss or damage that occurs as a result of their negligence or failure to take proper care of the goods.
  5. SECTION 72 (Liability of a person to whom money is paid, or anything delivered, by mistake or under coercion) : If someone receives money or a thing by mistake (e.g., incorrect payment) or under coercion (e.g., force or threat), they are liable to return it. Essentially, they cannot retain the benefit obtained through mistake or coercion and are legally obligated to return what they received to the rightful owner.

 

The Indian Contract Act provides a comprehensive framework to govern various relationships that resemble contracts. Whether it’s quasi contracts, quasi partnerships, or bailment, these unique relationships are recognized and regulated to ensure fairness and uphold legal obligations.

REFERENCES :

https://main.sci.gov.in/supremecourt/2018/39310/39310_2018_Judgement_27-Feb-2019.pdf – SUPREME COURT OF INDIA

https://main.sci.gov.in/jonew/judis/4050.pdf – SUPREME COURT OF INDIA

Written By Nancy Sharma

I am Nancy Mahavir Sharma, a passionate legal writer and , a judicial service aspirant who is interested in legal researching and writing. I have completed Latin Legum Magister degree. I have been writing from past few years and I am excited to share my legal thoughts and opinions here. I believe that everyone has the potential to make a difference.

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