legal maxim

The phrase quid pro quo is a Latin term which means something in return for something. Applied in the Law of Contracts, this phrase is used when there is an exchange of goods of equal value. Thus, we can say that a bartering agreement is an example of quid pro quo. In the Law of Contracts, we see the parties performing certain tasks or abstaining from doing other in return of something that the other party offers, this is Quid Pro Quo. The presence of Quid Pro Quo is a prerequisite for any agreement to be valid. In a very simple term, we can call the considerations in a Contract to be quid pro quo. Section 2(d) of the Indian Contract Act, 1872 defines consideration as something done, abstained from doing or promised, in return of a promise. This consideration is always at the desire of the person making the promise. This consideration describes the intention of the party towards making the contract.

Corporation of Calcutta & Anr. v. Liberty Cinema

In this case, the appellant had levied a huge charge on the respondent for the large seating capacity in the cinema house. The respondent argued that since the license fee was a “fee”, there has to be some services which he must be provided. The Court held that the license fee was, in fact, a tax, and thus the cinema owner should pay it.

Jalkal VIbhag Nigam & Ors. v. Pradeshiya Industrial and Investment Corporation & Anr.

While distinguishing between ‘fee’ and ‘tax’, the Supreme Court held that while a ‘fee’ is considered a quid pro quo for some services that has been provided, a tax is something which the public has to pay, not subjected to anything done in return or not.