Contingent Contract - Business Law (BBS 2nd Year)

Contingent Contract

Define contingent contract and describes the rules regarding contingent contract.

A contingent contract can be defined as conditional contract. Such a contract depends on  a future uncertain event. A contingent contract is a contract to do or not to do something, if some event, collateral to such contract, does or does not happen. The example of contingent contract is Insurance contract. A contract to pay Rs. 1000000 if X’s death. But expiry of a fixed time, can not be contingent contract, because these events are of certain nature.

Rules Regarding Contingent Contract.

i) On the happening of a future un-certain event:  A contract to do or not to do something, if an uncertain future event happen, can not be enforced by law unless until the event has happened. If the ground event becomes impossible that contracts becomes void.

ii) On the non happening of future uncertain event: The contingent contract is to be performed if a particular event does not happens, it’s performance can be enforced when the happening of that event becomes impossible. For ex: A agree to pay certain sum of money if a ship does not return to port. The ship return back. The contract becomes void. Rather the ship sinks in the sea, now the ship could not return forever, the contract is enforceable.

iii) On the event linked with human conduct, or demand .......

impossible:  a contract contingent on the act or conduct of specified man if that things becomes impossible by his denial or inability, can no create any liability. For ex: A agree to pay B a certain sum of money. If B construct the house and is certified by Y an engineer, here certification of the house by Y is contingent event. The liability is not created because the house is not certified by Y.

iv) On the event’s happening within a fixed time:  A contract contingent upon the happening of an event within a fixed time becomes void. If the event becomes impossible. For ex: A agree to purchase certain amount of goods if A’s ship comes within one month. Now the ship has not returned within that time. The contract becomes void.

v) if the contract depends upon the future uncertain event if that does not  happen within the fixed time, the contract may be enforced.

vi) If the future event is illegal or certain the contract becomes void.

Remedies for Breach of Contract

 What does mean by breach of contract define various remedies for Breach of contract.

A breach of contract means failing to do something which is in the contract. A ‘breach’ means to an act of breaking a rule or an agreement. The parties to a contract must fulfill their respective obligation because they are agreed upon at the time of creation of the contract. If any party does not fulfill his liability, another party becomes victimize. The nature of breach of contract may be actual or anticipatory. The contract can be terminated by the breach of terms and condition of the contract agreed, and the breach of the law of contract made by the legislature or the statutory law of contract.

Remedies for the breach of contract: When any party to contract breaches a contract the victimized party should take the legal remedies. An important characteristics of a contract is the availability of remedies to the aggrieved party. The remedies, which are enforced by the law are as follow:

i) Rescission or cancellation of the contract: When one party breaches the contract, the other party can revocate or cancel the further performance that are agreed to do in the contract. The victim party can cancel the contract after giving a reasonable notice to the breacher party. The victim party has a right of demanding compensesation for their loss that are being through the breach of contract.

ii) Restitution: Restitution means ‘ returning every thing to the state as it was before. The parties to a contract have to return the binifit to each other which was received under the contract. The injure party have the remedies to restitute the changes, activities, losses as it was before.

iii) Damages: If any party breaches the contract, the victimized party should be paid the financial compensation, awarded by the court for his/her loss through the breacher. To pay for the damage is just to pay some money for the purpose of his recovery. The losses can be recorved from breacher as per law or terms and condition that was implied during the time of making the contract.

iv) Specific performance:  When any party breaches a contract, the injured party may demand a specific performance by suit. The court may order the breacher party for a specific performance, such order is made by the court when other types of compensation do not seem to be adequate.

v) Injuction: Injuction is a court order that restraints the breacher party from doing wrong or continuing the wrongful act, complained. Such remedy is appropriate where there is a kind of preventive relief to the aggrieved party.

For ex: A promise to sell his car to X for 5 lakh, rather that giving it to A, X intends to sell the car for 6 lakh to Y. In such condition the court can order restraining X to sell his car to C when it is claimed by A.

vi) Suit upon Quantum Meruit:  ‘Quantum meruit’ means ‘payment in proportion to the amount of work done.’ A injured party has the right to sue an quantum meruit arises where a contract, partly performed by one party, has become discharged by the breach of another party. Such type of remedy is based on the implied agreement to payment for what has been done or competed.

Quasi Contract

Define Quasi contract.

Generally the agreement, which fulfills certain essential elements is called contract . But certain cases create a contract without any essential elements of a valid contract, it is called “ quasi contract’. In such contract there is no meeting of mind, no offer and acceptance, no free consent, no intention to create legal relation and even parties have no intention to enter into a contract. It comes into existence when one of the parties act activates the law. The parties of a quasi contract, sometimes are unknown to each other however they have some right and liabilities under some circumstance. Duty is more important and promise is less important in such contract. NCA termed it as ‘ indirect contract. The basis of quasi contract is the doctrine of injust enrichment that is, a person shall not allowed to enrich himself unjustly at the expense of another.