CORPORATE & BUSINESS LAW

FINAL ASSIGNMENT

Rutba Rashed
20181-24696

Topics:
Contingent Contracts
Quasi Contracts
 Contingent Contracts

Definition:
A contingent contract is where the promisor is obligated to perform or refrain from performing a
certain act depending on the happening or non-happening of a certain event.
Example:
 A life insurance company promises the insurer to recover all his loss and harm in case he
gets into an accident or dies etc.
 Person A promises B to finance all his higher studies expense, if he manages to secure an
A+ grade in all his current classes.

Characteristics:
 Uncertain Event
The event in the contract should be uncertain and not something that is surely bound to happen
or not happen. For instance, if person A promises to gift his car to B if his fish does not survive
outside water, then this is not a contingent contract because it is certain that the fish cannot
survive outside water.

 Event must be collateral to the contract

The agreed upon event must not be a part or linked to the contract itself. For instance, paying
someone on the delivery of an item is not a contingent contract but if a person promises to pay
extra if he wins the lottery, then it is a contingent contract.

 Depends on the happening or non-happening of an event

The contract should depend on the happening or non-happening of a certain decided event.
Rules of Contingent Contracts:

Rule#1: Contract contingent on the happening of an event

A contingent contract between two or more parties, to do or not to do a certain thing, based on
the happening of a future uncertain event.
For instance, person A promises B to buy him a car if he redesigns his house. The house gets
burned down. The contract is no longer valid.

Rule#2: Contract contingent on the non-happening of an event

A contingent contract between two or more parties, to do or not to do a certain act, based on the
non-happening of a future uncertain event.
For example, person A promises B to give him his clothes, if a power breakdown does not
happen in the city this week.

Rule#3: Contract contingent upon the future conduct of a living person

A contract being contingent on the act of a person in the future, but if the person does something
that makes the happening or non-happening of the event impossible, then it is not a contingent
contract.
For example, person A promises to marry C, if B returns from war. B dies and cannot return
from war. Thus, makes the event of returning from war impossible.

Rule#4: Contract contingent on the happening of an event on a specific time

The contract can be contingent on the happening of an uncertain event, in a specified time period
and would be void after the time has lapsed.
For instance, person A promises to pay B Rs.1 million if his food delivers within 30 minutes.
The contract is only enforceable within the 30 minutes.

Rule#5: Contract contingent on the non-happening of an event in a specific time

Contract can be contingent on the non-happening of an uncertain future event in a specified time
period. If the event does happen in the specific time period then the contract is not valid.
For instance, person A promises to pay B Rs.1 million, if C does not return home in 2 days, C
does return home in 1 day, this makes the contract invalid and unenforceable.

Rule#6: Contract contingent on an impossible event

A contract contingent on the happening or non-happening of a future uncertain event that is clear
impossible, is in fact a void contract.
For example, person A promises to buy him a bungalow, if the ocean stops creating waves.
Knowing that it is impossible for the ocean to stop creating waves, hence the contract is void.

Difference between Wagering and Contingent contracts:

 Validity: Wagering agreements are invalid agreements, while contingent contracts are
valid.

 Interest: In wagering agreements, parties have no interest in the actual happening or non-
happening of the uncertain event but, in contingent contract, parties are interested.

 Uncertain event: In wagering agreements, the uncertain event is directly determining the
doing or not doing of the act, while in contingent contracts the uncertain event is
collateral.

 Reciprocal promises: Wagering agreements might consist of reciprocal promises, while

contingent contracts must consist of reciprocal promises.
 QUASI CONTRACTS

Definition:
A Quasi Contract is a contract created by court in the absence of any official contract between
two or more parties. These are understood and recognized contracts that are implemented by law
and must be strictly followed. These laws are enforceable if first part of the contract has already
taken place. Quasi contracts are to void someone or something from being unjustly utilized or
taken benefit of.

Example:
If you are dinning at a restaurant and you have paid for your food, but the waiter by mistake
takes it to the wrong table and the person the table eats your food. The restaurant through quasi
contract is now obligates to bring you food again or return your money.

Types of Quasi Contracts:

 Supply of necessaries:
If a person A is supplying a disabled person B with necessities of life, then A can
lawfully reimburse from the property of B.

 Payment by interested person:

If a person A is interested in buying a car from B, and the car happens to undergo an
accident and A pays for the damages because he is interested in buying the car, the
amount payed for damages can be reimbursed by B. Given that the payment is not
voluntarily, is real and should be in stance that the party was legally bound to pay.

 Person enjoying benefit of non-gratuitous act/goods:

If a person B gives his fruit garden to A, and A sells and profits from the fruit grown in
the garden the, B can reimburse from A the price of the fruits sold.
  Finder of goods:
If person A finds a valuable item that belongs to some one else, and A goes to all limits to
look for A to return the item but fails to find him, then A can keep the item as a bailee.

 Payment by mistake or coercion:

If a person B receives the payment twice by mistake, of goods he delivered
upon order. Then B is obligated to return the excess amount payed by
mistake.

 Quantum meruit:
If a person A provides B with some services, and even though there was no agreement or
contract between the two parties on payment of the service. B is now obliged to pay A the
reasonable amount for the service.

Application of Quantum Meruit:

 Void Agreements:
In case that an agreement is or later becomes void, under any circumstances, the person
who has received benefit or advantage from the agreement, must return it. For instance, if
A buys a horse from B and make the payment in advance, the horse dies before delivery,
then B is liable to return the amount back to A.

 Person enjoying benefit of non-gratuitous act / goods

Where an act is done without the intention of being gratuitous, compensation must be
mad for it. Like, if a salesman accidently gives the customer three instead of two
shampoo bottles, then the customer must pay for the extra bottle that he received.

 Act preventing completion of performance

In case of a contract or agreement, if a party prevents or tries to prevent the contract from
reaching completion then the party that has rendered its part can claim its compensation.
If A buys dozens of plates from B and they are to be delivered in half, after the first half
is delivered, A cancels the order. Then A is liable to pay B for the first six plates.

 Divisible Contract
In case there is a divisible contract and person A will be paying B for doing complete
house chores for a month, in the middle of the month abandons the contract. Here B
cannot claim any compensation for his services.
 Indivisible contract performed completely but badly
In case of a divisible contract, if person A is paying B for completing all house chores for
a day, but B does a really poor job and A has to get the chores done all over again. Then
B won’t be compensated for his services.

 Express or implied contract to render services but no remuneration is pre-

settled
In case there is no expressed contract as such, and there is payment or compensation
settlement either. Then the person enjoying the services must pay the reasonable sum to
the person rendering them. For instance, person A asks his co-worker B an engineer, to
fix some hard drive issue in his laptop. When fixed, A must pay the reasonable amount to
B for the rendered service.