Obligations Arising Out of Contract and Quasi-Contract
Introduction
Obligations are legal duties imposed on parties to act or refrain from acting in a particular manner
These obligations can arise from contracts quasicontracts or other legal relationships In contract law
obligations are created by agreements between parties whereas quasicontractual obligations arise
independently of agreements based on principles of justice and equity
Obligations Arising Out of Contract
1. Essentials of a Valid Contract
A contract is a legally binding agreement that creates enforceable obligations As per the
Indian Contract Act 1872 a valid contract must have the following essentials
Offer and Acceptance One party must make an offer and the other must accept it
Lawful Consideration Something of value must be exchanged between the parties
Capacity of Parties Parties must be competent to contract ie of legal age sound mind and not disqualified by
law
Free Consent Agreement must not be obtained by coercion fraud misrepresentation undue influence or
mistake
Lawful Object The purpose of the contract must not be illegal immoral or against public policy
2. Performance of Contractual Obligations
Once a contract is formed the parties are legally bound to perform their respective obligations
Performance can be
Actual Performance When both parties fulfill their promises as per the terms of the contract
Attempted Performance When one party is ready to perform but the other refuses to accept
3. Breach and Remedies
A breach of contract occurs when a party fails to fulfill its contractual obligations Remedies include
Damages Compensation for financial losses caused by the breach
Specific Performance Court orders the defaulting party to perform its contractual obligations
Injunction Court restrains a party from doing something that violates the contract
Rescission The contract is canceled and the parties are restored to their original positions
Obligations Arising Out of Quasi-Contract
1. Meaning and Nature of Quasi-Contracts
Quasicontracts are obligations imposed by law to prevent unjust enrichment even though there
is no formal agreement between the parties These are based on the principle that no one should unfairly
benefit at another expense
2. Types of Quasi-Contractual Obligations
The Indian Contract Act 1872 recognizes the following quasicontractual obligations
1 Supply of Necessities A person incapable of contracting eg a minor is supplied
necessities and the supplier can claim reimbursement from the person estate
2 Payment by an Interested Person If a person pays another legal obligation
they can seek reimbursement
3 Obligation to Pay for NonGratuitous Acts If a person lawfully performs a service
without the other partys request but with an expectation of payment the recipient must compensate them
4 Finder of Goods A person who finds and takes care of another lost goods has a
right to compensation and must return the goods to the owner
5 Money Paid by Mistake or Under Coercion A person who receives money or benefits
by mistake or coercion must return it
Conclusion
Obligations arising out of contracts and quasicontracts play a crucial role in legal relationships
While contractual obligations are enforceable based on mutual agreement quasicontractual obligations are
imposed
by law to prevent unjust enrichment Understanding these obligations helps in enforcing legal rights and
maintaining
fairness in commercial and personal transactions
