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Core Concept — Three Special Relationships
🧭🎲 Contingent contract
Performance depends on a future uncertain event collateral to the contract.🏛 Quasi contract
Obligation imposed by law without any agreement — rests on equity: no one should be unjustly enriched at another's expense.🤝 Agency
Agent acts for a principal in dealings with third persons; contract is between principal and third party.2
Contingent Contracts S. 31
🎲A contract to do or not to do something, if some event, collateral to such contract, does or does not happen. Examples: contracts of indemnity (insurance) and guarantee.
Essential 1
Performance depends on the happening or non-happening of a future event.Essential 2
The event must be uncertain.Essential 3
The event must be collateral (incidental) — not the very thing contracted for.✔ Contingent: Rs. 50m payable for a building provided an architect approves — approval is collateral.
✖ Not contingent: No payment till building completed — completion is the very thing contracted for.
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Rules of Enforcement S. 32, 33, 35, 36
📋| Contingent on | Time fixed? | Enforceable when | Void when |
|---|---|---|---|
| Happening of uncertain future event | No | Event happens | Event becomes impossible (fiancé dies) |
| Yes | Event happens within time (ship returns within a year) | Time expires, or event impossible before expiry (ship sinks) | |
| Non-happening of uncertain future event | No | Event becomes impossible (ship sinks) | Event happens (ship returns) |
| Yes | Time expires, or event impossible before expiry | Event happens within time | |
| Impossible event | — | Agreement void — whether or not the impossibility is known to the parties (run at 500 km/h; marry a daughter already dead) | |
Future conduct of a living person S. 34
If the event depends on how a third person will act, and he does something making it impossible, the event is deemed impossible → contract void.Pay Sarmad if he marries Shazia; Shazia marries Dawood → deemed impossible. Later marriage as a widow does not revive the obligation.| Basis | Contingent Contract | Wagering Agreement |
|---|---|---|
| Validity | Valid | Void and illegal |
| Interest | Real interest in event (e.g. insurable interest) | Only in winning or losing |
| Event | Merely collateral | Sole determining factor |
| Reciprocal promises | Consists of reciprocal promises | May or may not |
| Breach | Suit & damages possible | No suit, no damages |
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Quasi Contracts (Constructive Contracts)
🏛The law imposes obligations resembling those created by contract although no agreement exists — a contract that should have been formed though in fact it was not.
1. Supply of necessaries S. 68
Necessaries suited to the condition in life supplied to a person incapable of contracting (minor, unsound mind) or his dependants → supplier reimbursed from the incapable person's property — no personal liability.Diamond-button coat ✖ not necessary. Jacket priced Rs. 2,000 (market Rs. 1,500) → recover only reasonable value.2. Payment by interested person S. 69
Conditions: payer is interested in the payment and the other was bound by law to pay.Lessee pays landlord's land revenue to stop sale ✔. Neighbour pays rent out of goodwill ✖ (no interest).3. Benefit of non-gratuitous act
Lawfully does/delivers something not intending it gratuitously, and the other enjoys the benefit → must compensate or restore.Coolie carries goods; buyer doesn't object ✔. Saving property from fire with gratuitous intent ✖.4. Finder of goods S. 71
Same responsibility as a bailee: care of an ordinary prudent man; take reasonable steps to trace owner (else wrongful conversion); may retain till owner found S. 151. May sell if goods perishable or finding charges ≥ ⅔ of value S. 169.5. Payment / delivery by mistake or under coercion S. 72
Must be repaid or returned.Joint debt paid twice by mistake → refund to second payer. Undue carriage charge paid to get goods → excess recoverable.5
Appointment of Agents
🤝Agent S. 182 = a person employed to do any act for another or to represent another in dealings with third persons. The person represented = Principal. The relationship = Agency.
PRINCIPAL⟵ AGENCY ⟶AGENT⟵ NEGOTIATES ⟶THIRD PARTY
Contract is made between Principal ⇄ Third Party — enforceable by and against the principal. Normally no contract between agent and third party.
Who may employ S. 183
Any person of the age of majority and of sound mind.Who may be agent S. 184
As between principal and third persons, any person — even a minor/unsound person; but such an agent is not responsible to the principal.Consideration S. 185
Not necessary to create an agency.6
Authority of Agents
🔑The principal is liable to a third party when the agent has authority — whether express or implied, actual or apparent.
Express S. 186–187
Given by words spoken or written.Power of attorney to sell house; verbal appointment to sell goods.Implied S. 186–188
Inferred from circumstances, things said/written, or ordinary course of dealing.Shop manager habitually orders goods with owner's knowledge.Apparent (ostensible)
Third party reasonably believes agent has authority; may assume usual powers of the position unless he knows otherwise.Agent dismissed without notice still binds principal; secret instruction not to sell doesn't bind buyer.Emergency S. 189
All acts to protect principal from loss that a person of ordinary prudence would do in his own case.Butter sold to prevent spoiling ✔; furniture sold for a better price ✖ (no real emergency).Authority to do an act → every lawful thing necessary to do it (debt-recovery agent may sue and give discharge).
Authority to carry on a business → every lawful thing necessary or usually done in that business (shipbuilding agent buys timber, hires workmen).
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Application & Exam Traps
⚠️Licence ban before issue → boats-purchase contingent contract not enforceable; effort/fee spent is irrelevant.
Necessaries: liability from property of incapable person — personal liability ✖; amount = reasonable price.
Regulatory ban before approval → contract void; buyer recovers advance, not liable for seller's approval costs.
Finder of a non-perishable dog may sell only if finding charges ≥ two-thirds of value.
Contingent contract is always void → valid (if object lawful); wager is void.
A minor can be an agent (binds principal) but is not liable to the principal; a minor cannot employ an agent.
Insurance / guarantee = contingent contracts.
Agency needs consideration → no consideration necessary.
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Quick Revision Box
⚡3Essentials: future · uncertain · collateral event
5Quasi contracts: necessaries · interested payer · non-gratuitous · finder · mistake/coercion
⅔Finder may sell if charges ≥ ⅔ of value (or perishable)
4Authority: express · implied · apparent · emergency
- S. 31 Contingent contract · S. 32–36 Enforcement rules · S. 2(f) Reciprocal promises
- S. 68 Necessaries · S. 69 Interested payer · S. 71 Finder · S. 72 Mistake/coercion
- S. 151 / 169 Finder's care / sale
- S. 182–185 Agent, principal, capacity, consideration · S. 186–189 Authority
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