Law Final Pres

8/8/2019 Law Final Pres

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Law Presentation-Quasi contract and Ultra Vires

Poorna.SSandhya.H

Preetha.CVijayamanickam.RArun Kenneth

Ravee Kumar.M.S


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Quasi contract


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Quasi-contract

No contract = no obligation??Certain obligations imposed by law in the

absence of any contract-> Quasi-contractSimilar to those created by contractsFictitious agreement

Seemingly contractsExists by order of court and not by agreementof parties


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Need for Quasi-contracts

To avoid unjust enrich enrichment of a party in adispute over payment for good or serviceU njust enrichment-> When a person retainsmoney or benefits that in all fairness belongs toanotherBased on the Maxim- N o man must grow rich outof another person s cost .Equitable principleImplied-in-law contracts


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K inds of Quasi-contracts

1 . Right to recover the price of necessariessupplied(section 68)

2. Right to recover money paid for another

person(section 69)3. Right to recover for non-gratuitous act(section70)

4. Responsibility of finder of goods(section 7 1)

5. Right to recover from a person to whom moneyis paid or thing is delivered by mistake or undercoercion(section 72)


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Right to recover the price of

necessaries supplied(section 68)a) Minors .b)Persons of unsound mind .

c)Persons disqualified by law to which theyare subject .

Example:

A supplies B, a lunatic


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A person who is interested in the payment of money which another is bound by law to payand who therefore pays it is entitled to bereimbursed by the other

The interest should be legally recognizable.bound by law to pay the money.

made the payment to another person

Right to recover money paid foranother person(section 69)


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CASE LAW

Exall v. Partridge , where , P left his carriage onD s premises. D s landlord seized the carriageas distress for rent. P paid the rent to obtainthe release of his carriage. Held , P couldrecover the amount from D.


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Where a person does something for anotherperson not intending to do so gratuitously andsuch person is entitled to enjoy benefits fromit.Conditions as follows

services rendered without any request.

Should be lawful .should not have intended to actgratuitously.

Liability for non-gratuitous act(section70)


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It lays down the responsibility of a finder of goods. The duties and liability of a finder istreated at par with the bailee.

EXAMPLE

Lost Diamond necklace

Finder of goods [S.7 1]


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Any payments or delivery made under mistake orcoercion must be made good or be returned.

Example

A pays some money to B by mistake .It is reallydue to C

Mistake or coercion [S. 72 ]


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Kelly v. Solary , where the money was paid under a life insurance policywhich to the knowledge of the company had lapsed. But , the fact of lapsehaving been forgotten at the moment , the company was held entitled torecover back the money. One of the essential conditions of this action is

that the mistake must be of fact and must make the person liable to paythe money.

W ood V. Boynton , P owned a rough and uncut stone she did not knowthe identity of; although she thought it might be a topaz. P sold the stone

to D,

who also did not recognize the identity or value of the stone,

for$1 .Upon finding out that the stone was actually a very valuable diamond ,P tendered the D $ 1 .10, and demanded return of the stone. D refused ,and So P brought suit.

Case Laws


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Quantum meruit

Quasi-contracts made possible by QuantumMeruit

As much as is meritedNo remuneration is fixedLaw will infer a promise to pay as much as theparty doing the service has deserved

Object->Recompensate the party for value of work doneRestitutory(making good) in nature


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Cases under which claim arises1 . When the agreement is discovered to be void , or when the

contract becomes void.2. When something is done without any intention to do so

gratuitously.3. When there is an express or implied contract to render services

but there is no agreement as to remuneration.4. When one party abandons or prevents or even refuses to perform

the contract.5. When a contract is divisible and the party not in default has

enjoyed the benefit of the part performance.

6. When an indivisible contract for a lump sum is completelyperformed , but badly , the person who has performed the contractcan claim the lump sum; but the other party can make adeduction for bad work.


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Case lawP linche v. Colburn , the plaintiff was the author of several dramatic entertainments. He was engaged bythe defendants , who were the publishers of a workcalled The Juvenile Library that used to illustrate thehistory of armour and costumes from the earlier times.For this he was to be paid 100 guineas. The plaintiff made several drawings and completed a considerablepart of the manuscript when the defendantsdiscontinued his services. The plaintiff claimed an

amount of 50 guineas for his work. Due to the principleof quantum meruit the plaintiff was held to be entitledto the claim.


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Ultra-Vires and Case Facts


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ULTRA-VIRES

Ultra means beyond and Vires means powers.

Thus the expression ultra vires means an actbeyond the powers

ULTRA-VIRES THE DIRECTORS

ULTRA-VIRES THE ARTICLES ULTRA-VIRES THE MEMORANDUM(COMPANY) ULTRA-VIRES THE COMPANIES ACT


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EFFECT OF ULTRA-VIRES ACT

I. ULTRA VIRES CONTRACTSvoid-ab-initio

ultra-vires contract cannot become intra-viresby reason of lapse of time or ratification

II. ULTRA VIRESBORROW INGS1 . Injunction- if the money lent to the company

has not been spent


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2. Tracing the lender can recover his money if its in its original formProperty- the actual possession of th e c omp a ny Mixed up with the company s money- p ar i-pa ss u

(3) Subrogation-Lawful debts of the companyThe lender can claim a right of subrogation


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III LIABILITY OF DIRECTOR

Money is unlawfully disbursedThird party transaction


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A shbury Railway Carriage and IronCo. Ltd v. Riche (1875)

The company was registered with thefollowing objects:

1 . to make and sell , or lend on hire , railwaycarriages and wagons2. to carry on the business of mechanical

engineers and general contractors3. to purchase , lease , work and sell mines ,

minerals , land and buildings


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Issue: whether the contract was valid and if not , whether it could be ratified by themembers of the company?

The House of Lords held unanimously that:

void-ab-initioassent of whole body of the shareholderscannot ratify the contract


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G erman Date Coffee Co v/s Brougham,1918

Issue: Whether the doctrine of ultra vi r es ca n be a pp l ied? just and equitable" ground for winding up of

the company


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Ev a ns v. Bru nne r Mond & Comp a ny, (1921

A company was incorporated for carrying onbusiness of manufacturing chemicals

directors were authorized to distribute 100 ,000 out of surplus reserve account to UKuniversitiesSelection for the furtherance of scientificresearch and education.


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Resolution was challenged on the ground that it wasbeyond the objects clause of the memorandumDecision :The court held that the expenditure authorized by theresolution was necessary for the continued progress of the companyThe resolution was incidental or conductive to theattainment of the main object of the company

Consequently it was not ultra vi r es .


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Thank you

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