Theoretical overview
Meaning of quasi contract: – The word ‘Quasi’ means pseudo. Therefore, a quasi contract is a pseudo contract. The quasi contract is based on the principle of equity that “a person is not permitted to enrich himself unjustly at the expense of another. This means that no one should accept or receive any benefit unjustly”.
Chapter (V) Section 68-Section 72 of the Indian Contract Act, 1872 talks about “Quasi-Contract“.
In the absence of a contract, but on the principle of equity, the obligation is imposed on the party/individual; such obligation is called quasi contracts/quasi contractual obligation. This is similar to an actual contract between the parties.
The term quasi contract is derived from the Roman law “obligioti quasi ex contractu”. A quasi-contract is not an actual contract. It resembles a contract in which the law imposes an obligation on a person to perform an obligation on the land of equity.
When we talk about a valid contact we expect it to have certain elements such as offer and acceptance, consideration, ability to contract, and free will. But there are other types of contracts.
For example: XYZ accidentally leaves his wristwatch at ABC’s house. ABC has a quasi-contractual obligation to return it to XYZ.
Note: – Generally, in a contract, the parties are excluded from an agreement, but in this type of contracts (quasi-contract), obligations are made on the parties without agreement.
The essentials of quasi contract are as follows: –
- It is usually a right to the money and generally (not always) to a corrupted amount of money.
- The right is not a result of an agreement but it is imposed by the law.
- The right does not apply to all in the world but only to a single person. Therefore, it looks like a contractual right.
Kinds of quasi contracts
- claim for requirements supplied to a person unable to contract on his account (Section 68): –
- If a person, unable to enter into a contract, and if he is supplied with the necessary things important for his life, the person who is supplying is entitled to be reimbursed from the property of such incapable person.
- Illustrations: A supplies with all the necessary things suitable to his condition in life, and B is a lunatic. Here, A is entitled to be reimbursed from B’s property.
- Reimbursement of a person paying money due by another in which he is interested (Section 69): –
- A person who is interested in the payment of money and also pays it, which another person is bound by the law to pay.
- Illustration: ‘B’ holds land in Bengal on a lease provided by zamindar ‘A’. The revenue owed to the government by A, his land is advertised for sale by the government. Under the revenue law, such a sale would result in the deletion of B’s lease. B to stop the sale and the resulting declaration of his lease pays the government the amount due from A. Here, B can get reimbursed from the property of A.
- The obligation of a person enjoying the benefit of the non- gratuitous act (Section 70): –
- Where a person lawfully does something to another, or deliver something to him gratuitously, here latter is bound to compensate to the former for the act done.
- However, the plaintiff must prove that:
- What was done or given was legally valid.
- He did not do so gratefully.
- Another person took advantage
- Responsibility of finder of goods (Section 71): –
- A person who finds the goods belonging to another and takes them in his custody, then he is subject to the responsibility as a bailee.
- Finder has to adhere to the following responsibilities:
- Take care of the goods as a person of a prudent man.
- No right to appropriate the goods.
- Return the goods to the owner (if found)
- Liability of the person to whom the money is paid, or the goods delivered by mistake or under coercion (Section 72): –
- A person who has been paid money, or given anything accidentally or under coercion, must repay or return it.
- A and B jointly owe C 100 rupees, A alone pays C the amount, and B, not knowing this fact, again pays C 100 rupees. C is obliged to repay the amount to B.
Relevant sections
- Section 68-Section 72 of the Indian Contract Act, 1872 talks about “Quasi-Contract“.
- Section 68 : claim for requirements supplied to a person unable to contract on his account
- Section 69: Reimbursement of a person paying money due by another in which he is interested
- Section 70The obligation of a person enjoying the benefit of the non- gratuitous act
- Responsibility of finder of goods Section 71
- Section 72:Liability of the person to whom the money is paid, or the goods delivered by mistake or under coercion
Important case laws
Lord Mansfield in Moses vs. Macferlan (1760) 2 Burr 1005
The quasi-contractual obligation is based on the principle that law, as well as justice, should try to prevent unjust enrichment, i.e., enrichment of one person at the expense of another or prevent a person from retaining his wealth, or some benefit derived from it, which he is against conscience he should keep.
State of West Bengal vs. B.K. Mondal & Sons (AIR 1962 SC 779)
Facts of the case: – The plaintiff did some construction at the request of a state official. The state accepted the work but refused to accept that there was no valid contract.
The Judgment of the case: – Court held in favor of plaintiff. Similarly, in another case, the corporation tried to avoid liability because the contract was not done as per the Bombay Municipal Corporation Act. The corporation was held liable under section 70.
Points to remember
- .The word ‘Quasi’ means pseudo. Therefore, a quasi contract is a pseudo contract. The quasi contract is based on the principle of equity that “a person is not permitted to enrich himself unjustly at the expense of another. This means that no one should accept or receive any benefit unjustly”.
- The term quasi contract is derived from the Roman law “obligioti quasi x contractu”. A quasi-contract is not an actual contract. It resembles a contract in which the law imposes an obligation on a person to perform an obligation on the land of equity.
- A person who has been paid money, or given anything accidentally or under coercion, must repay or return it.
- If a person, unable to enter into a contract, and if he is supplied with the necessary things important for his life, the person who is supplying is entitled to be reimbursed from the property of such incapable person
- A person who is interested in the payment of money and also pays it, which another person is bound by the law to pay.
