Bibliografía

CONTENTS 1.0 Introduction 2.0 Objectives 3.0 Main Content

3.1 Meaning of Quasi-Contract

3.2 Money Paid under a Mistake of Fact 3.3 Money Paid under the Ineffective Contract 3.4 Money from a Third Party

3.5 Claims Against Wrongdoer

3.6 Money Paid to the Defendants Use 3.7 Compromise

4.0 Conclusion 5.0 Summary

6.0 Tutor-Marked Assignment 7.0 Reference/Further Readings

1.0 INTRODUCTION

Situations in which individuals spend time and effort for which they are not necessarily rewarded, raise a complicated aspect of the law often referred to as 'unjust enrichment', where sometimes a person has unjustly benefited at the expense of another. This can arise, as when the courts take an 'all or nothing' approach as evidenced by the general presumption that a contract is to be treated in its entirety, and partial performance by a party does not entitle him to any remuneration (as in the Bolton case). As noted earlier, to rule otherwise would amount to re- writing the contract. This concept is allied to quasi-contract in which some person, as in quantum meruit, has performed an act or service and is not remunerated because of legal principles which operate against him.

In Craven-Ellis v Canons Limited, (1936), the principle is enlarged even more as there was never a binding contract to start with. By technicality, the directors who signed the Plaintiff's employment contract lacked legal capacity to the extent that they had not obtained the requisite qualification shares; hence the contract was invalid.

Meanwhile, the Plaintiff had performed services for which he had not been paid.

The court ordered payment to him on the basis of quantum meruit, or

quasi-contract, as indeed, at common law, there was no contract but he had performed services.

2.0 OBJECTIVES

At the end of this unit you should be able to understand:

 The Meaning of Quasi-Contract

 When money is paid under mistake of fact

 When money is paid under ineffective contract

 When money from a third party

 Claims against wrongdoer

 Money paid to the de fendants use

 Compromise

3.0 MAIN CONTENT

3.1 MEANING OF QUASI-CONTRACT

Quasi-contract has some of the elements of a contract but does not satisfy the criteria of consent or the requirement of consensus ad idem. The relationship is usually referred to as quasi or contractive contract.

Historically, it was based on an implied promise to pay and principally based on an unjust enrichment. It may originate from statutory provisions. In a certain circumstances, a minor, who has obtained benefits at the expense of an adult may be liable at common law in quasi-contract. It is expressly preserved also under section 3(2) of the English Minors Contract Act 1987. It is sufficient to mention transaction under quasi-contract.

3.2 MONEY PAID UNDER A MISTAKE OF FACT

It is the general rule that where money is paid to another person under a mistake, that is, there is specific facts which makes it look as if the receiver is lawfully justified to receive the money and the fact is not known to the payer. An action will lie to recover the money.

Thus, in Chief Osian v. Flour Mills of Nigeria (1968) NCLR 3 Kazeem J held that a person who pays money to another under a mistake of fact is entitled to recover it as money had and received if (a) the mistake is bona fide (b) it gives notice of the mistake to the payee and (c) he demands its repayment.

In Standard Bank of Nigeria Ltd. v. Attorney-General of the Federation (19710 1 NCLR 18, the court said that where money paid to a banker or to his customers account or paid to as agent for his principal, and under a mistake of fact, it can be recovered from the banker or other agent while it remains in this hands, but not when he has, before notice of the mistake, paid it over to his customer or principal or alternatively materially alter his position. The mistake must be of fact and not of law. It must not be occasioned by neglect or misconduct.

3.3 MONEY PAID UNDER THE INEFFECTIVE CONTRACT

Where there is a total failure of consideration, where a seller has no title, but sold goods to the buyer and he has enjoyed the use of goods, the buyer is entitled to recover from the seller money had and received as money paid on a consideration that has totally failed. In the instance, the seller must not be operating under an intention that he has an implied power to sell. Partial failure of consideration to analyse the nature of the contract to determine whether there is total failure of consideration. Total failure of consideration may occur where one party has received some benefit or incur some detriment. There is a failure of consideration where one of the parties fails to receive the benefit.

Thus, in Mobil Oil (Nigeria) Ltd. v. Coker (1877) 1 NCL 108. The court held that there is a failure of consideration where the plaintiff pays money under a lease which the defendant is unable to grant.

Failure of consideration involves in money paid in an illegal contract or contract that cannot be enforced under the Statute of Frauds. So also, where a vendor refuses to perform his part under a contract for the sale of land there is total failure of consideration, the purchaser can recover as money had and received any money he has paid under the contract.

3.4 MONEY FROM A THIRD PARTY

This is where the defendant received money from a third party on behalf of the plaintiff.

Where a person holds funds for a third party, he may be asked to pay it to the plaintiff.

He will be liable if he fails to do so. An agent who receives money on behalf of the principal, he is liable for the amount so received.

In principle, where a person receives money which belongs to another person, he is regarded in law as having received it to the use of the other person. The imposes on him an obligation to make payment to the person entitled for money had and received to his use.

3.5 CLAIMS AGAINST WRONGDOER

Where money is obtained through fraud, the defendant is liable to an action for money had and received. The money may be recovered with interest. Where a person has a right to bring an action for money had and received, he may elect between a claim for money had and received or alternatively, or a claim in conversion. The two actions are independent from and in many cases lies where one action would fail. Thus, where a person is given a negotiable instrument with instruction to obtain cash, and he misapplies the proceeds, the plaintiff may bring an action for money had and received or alternative a claim for conversion. In Olaore v. Vaswani (1968) NCLR 269, the court laid down the rules of election and circumstance in which plaintiff may elect. If it is against a bank, the proper form of action is for money had and received and not conversion.

3.6 MONEY PAID TO THE DEFENDANT USE

Where a plaintiff has been compelled by law to pay money which the defendant was liable to pay, the defendant is indebted to the plaintiff in the amount of payment.

The law requires that the action for money paid is maintainable only cases in which there has been a payment of money by the plaintiff to third party at the request of the defendant and with an undertaking express or implied to repay it. The action is founded on common law, statute, agreement or estoppels. Payment is at the request of the defendant, and not voluntary.

3.7 COMPROMISE

In a pre-existing contract, an agreement may be made between parties as a way of setting a dispute; This may be done in a matter, whether the dispute is already in court or out court. This, in essence is a compromise. A compromise is an agreement arrived at either in court or out of court for settling a dispute upon what appears to the parties to be equitable terms having regard to the uncertainly they are in regarding the facts or law the law and the facts together.

The essence of compromise based on mutual concession which will normally terminate the controversy. The real essence is to avoid the necessity of determining liability. Where there is an effective compromise, the claimant would forgo part of his claim while the person against whom claim has been made would have been prepared to meet part of the claim. Where there is a breach and both parties are sticking to their guns and none accept liability. The dispute can be settled without admission of liability, thus, in Central Bank of Nigeria v. Beckiti Construction Ltd. (198) 6 NWLR (pt. 553) 238, in April 1992, a contract for the construction of prefabricated office block at Abuja was awarded for DFL 12, 638, 905 the respondent claimed he had incurred considerable expenses in the performance of the contract. In June 1992, the appellant alleged that the respondent unilaterally arbitrarily and legally terminated the contract and he claimed N28, 009, 647, 81 being expenses incurred and anticipated profit lost. The respondent accepted payment of N1, 373, 752.01 as total payment. The appellant did not accept the offer and commenced action.

A compromise derives its force from the arrangement of the parties. The respondent applied to trial court for leave to enter final judgment against the appellant for the sum of N1,373,752.01 being the amount owed to the respondent for expenses incurred in the performance of the contract. The High Court gave final judgment against the appellant foe the sum. The appellant was dissatisfied and appellant to the Court of Appeal. The court held that where the issue of liability has not been admitted and is still to be determined at the trial, it is erroneous for the court to proceed to award part of the damages claimed. “The court frowns at giving judgment in piece-meal. It is better to give one judgment to cover all the issues in controversy. Where there is a valid compromise arrangement, the rights and obligations of the parties are shifted from the original rights and obligations sought to be enforced to the new contractual relationship created by the R

4.0 CONCLUSION