Doctrine of Promissory Restitution

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Introduction

In India, contract law is widely used in the legal system by various entities like companies, people, organizations, etc. Since contract means when there is a relation of give and take from one party to another party. The most important and core part of the contract is the consent, or can be broadly said as consideration; without it, the contract can be called void. If there is a case or scenario where one party gains or benefits from the other party without any contract between them. In this case doctrine of promissory restitution plays an important role in giving compensation for the cost of the services provided to the party. In today’s world of the internet and interconnected, there are many things or work which are get done before forming a contract.

If one of the party ask for compensation for the services and the other party refuses to do the same, then this doctrine of promissory restitution can come into play, which is indirectly referred to be derived from section 65 of the Indian Contract Law,1872. By this doctrine, it can provide relief or help to the people who work or provide services without any formal or legal contract.

What is the doctrine of Promissory Restitution?

The doctrine of promissory restitution basically talks about when one of the parties who received the services promised to compensate for the service received, even without a contract or but later refused or backs from the promises, then this doctrine will come into play when the petitioner party can sue to other party. For example, if a person named A provides a service which was needed by party name B at the time, without any contract. Later, the person named B promised the person named A to compensate him. But person B fails or refuses to make the payment. Then this doctrine can be used to solve this problem.

The main core principle of this doctrine is to ensure that no one gets unreasonable benefits without paying for them. It is more based on morality or social rules that if one helps you, you should also ensure that the person who helped you gets something in return. The name of the doctrine itself suggests that to restore the benefit you got from another person at the time.

Evolution of the Doctrine

The roots of the doctrine of promissory restitution come from the English law or common law, where the rule was that without consideration, no agreement can be called a contract and no benefitted of it can be received. So when a person provides a service or benefit without consideration, then the person can not ask to be compensated. Then the court found some lag or gaps in the people getting remedies. As more cases came into this regard then the court observed and solved, establishing a doctrine of promissory restitution, where people who benefited from the service provided by a person at that time.

The United States of America introduced the concept of this doctrine through the Restatement (Second) of Contracts. Through this act, the government explicitly mentioned the doctrine of primordial restitution that a promise made to a party who benefited has to ensure that he/she should compensate the person who did the same. Earlier, this concept was introduced to certain limits like that as gifts or when the value of the benefit is more than the value of the promise made to the party.

In the Indian view, there is no direct mention of the doctrine of promissory restitution in any act or legislation because it is evolving during the course of time, and courts are also recognizing it as an important and core part of the services. Through this doctrine, it may have provided benefit to the people who inherently helped or provided someone needed service and the other party fails to fulfill the promise made by them.

Features of the Doctrine

To prevent or limit the unjust benefit: This doctrine allows one to sue the party when it promises to compensate for the services or gifts rendered but fails in it.
Getting compensation: After providing the services to one of the parties, if the other party promised to compensate them, then the doctrine ensures that this can be done at the time. For example, if person X received a gift from person Z and person X promised the other party that he will pay him Rs 1500 within 7 days of time. If person X fails to compensate him, then person Z can sue him under the doctrine of promissory restitution.
Absence of consideration:- In India, under the contract law of 1872, it is necessary to get consideration to get a contract legally followed, but in this situation, it can be considered through this doctrine.
Can be considered under moral duty:- As earlier, this should be ensured that if a person helps someone, then they should also return to him/her as a reward or compensation.
Court:- Now court or judicial system is also giving recognition to this type of case where one person receives a benefit and then promises to compensate the other.

Landmark Judgements

State of West Bengal v. B.K. Mondal & Sons (1962)

-In this case, B.K. Mondal, a contractor based in West Bengal, created the infrastructure for the government of West Bengal without having any lawful contract with the government. When the work was completed and the contractor asked for their payment, the state refused to make it and said that there was no formal contract for making the buildings.

– the case went to the Supreme Court of India, where the petitioner mentioned and stated the fact, and later the court decided that if there was no contract but it can ensured under the section 70 of the contract act, 1872 where it is mentioned that when a person does something lawfully and the other person enjoys its benefits, than compensation must be made. Through this case, it was proved that the use of the doctrine of promissory restitution.

Mulamchand v. State of Madhya Pradesh (1968)

-This case deals with the facts that Mulamchand, a supplier of the goods, agrees to provide goods to the government of Madhya Pradesh under an agreement, but that was not valid under Article 299, which mentions that all government contracts should be made under the president or the governor.

The state revived the benefits that were goods, but when it the time to make the payment, they refused to do it, stating that the contract was not valid. The case went to the Supreme Court of India, where the court mentioned that though this contract was not legally valid, the claim and action for providing goods can be considered under the doctrine of promissory restitution with having valid reason and analysis.

Limitations of the doctrine

Uncertain:- There is some uncertainty now also in the application of the doctrine of primary restitution. This has not been directly mentioned in the law; therefore, it does not have a scope, which it can be applied.
Misuse:- This doctrine can be misused by the aggrieved party in a wrongful way. Parties can also misuse to claim the promises that had not happened.

Related Sections & Articles

In India, the doctrine of promissory restitution is not directly mentioned in the Contract Law of 1872, but it can be inferred from it. Here are some details or related articles:-

Section 2(d): Defines consideration and emphasizes that an act done at the desire of the promisor can be valid consideration. However, there are acts done voluntarily that are excluded, which highlights the area of promissory restitution.

Section 68-72:- This section deals with situations of unjust enrichment which not only affects the victim but also affects the process of benefit in the doctrine of promissory restitution

This doctrine has its roots in the English law also and is also being developed from the Indian perspective also and it is continuously involved in the cases.

Conclusion

The doctrine of the promissory restitution reflects the pace of the ongoing evolution in the process of contract in India. This doctrine provides that when someone provides services to another without any formal contract with him/her and later the person promises that they will compensate for the benefit within a time, but if the person fails to do so, then the action can be taken. There are some core features of this doctrine that can be used to get compensation for the work. In India, it is said that if someone helps you, he/she should be rewarded. This doctrine also has some limitations or can be said as challenges, like that it is not codified or does not have a clear or concise relationship to it and government should make a law or legislation to regulate this doctrine or judiciary should laid down some guidelines for it . It should be used in a correct way to get the compensation for the benefit provided. There are some landmark cases that we discussed. This doctrine should be used as a mechanism to evolve from an unlawful contract.

References

Written by Aryan Raj an Intern under Legal Vidhiya.

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