Law of Contracts and Mercantile Law | Topic 5 | UPSC Law Optional

WHAT IS QUASI-CONTRACT [QC] ? • No agreement. No actual offer or acceptance. • But a contract of fictitious nature will be created by law so as to conform what is just, prevent unjust.

RATIONALE : 2 THEORIES :

#1THEORY OF UNJUST ENRICHMENT:[ TOFUE] • Founded by LORD MANSFIELD in MOSES V. MACFERLAN • Unjust enrichment has been defined as: "A benefit obtained from another, not intended as a gift and not legally justifiable, for which the beneficiary must make restitution or recompense." Black's Law Dictionary, Eighth Edition (Bryan A. Garner) at page 1573. • Sahakari Khand Udyog Mandal Ltd vs Commissioner of Central Excise & Customs ((2005) 3 SCC 738). "`Unjust enrichment' means retention of a benefit by a person that is unjust or inequitable. `Unjust enrichment' occurs when a person retains money or benefits which in justice, equity and good conscience, belong to someone else." • When claim arises ? A claim for unjust enrichment arises where there has been an "unjust retention of a benefit to the loss of another, or the retention of money or property of another against the fundamental principles of justice or equity and good conscience.

#2- THEORY OF "IMPLIED-IN-FACT"CONTRACT [TOIFC] • Replaced TOFUE. • Founded by LORD HALDANE in SINCLAIR V. BROUGHAM : Common law has only actions : contractual or torts. No place of QC. • LORD PARKER - Reasoning - If you compel TO PAY an ultra vires loan to ; then would it not mean that you are enforcing a contract which is against public policy. i.e., why are enforcing a notional/fictional contract ; when express contract itself is void. • HOLT V. MARKHAM ; SCURRTON LJ : Lord mansfield doctrine is "now discarded" HOW SAD ! BUT DONT WORRY. COZ. BACK TO TOFUE!( RESTORATION OF THEORY OF UNJUST ENRICHMENT): • WHY ? Implied contract theory cannot restrict the scope of TOFUE, which is based on Natural Justice & equity. • WHO Restored it back ? Thanks to Lord Wright ; His reasoning in Fibrosa Spolka Akcynja v Fairbairn Lawson Combe Barbour (1943) as follows: "It is clear that any civilised system of law is bound to provide remedies for what has been called unjust enrichment or unjust benefit, that is, to prevent a man from retaining the money of, or some benefit derived from, another, which it is against his conscience to keep" • Also said that; third category of common law remedies = QUASI-CONTRACT. OR RESTITUTION. ............................................

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