Introduction

A Quasi contract is a contract that is created by court’s order in absence of any agreement
between the parties.A Quasi contract does not involve any essentials of a valid contract as
defined under Indian Contract  Act 1872.

Though Indian Contract Act 1872 has not defined Quasi contracts,Sec 68-72 deals with ‘certain
relations resembling those created by contracts’. Quasi contract can be defined  ‘as an obligation
enforced by the law on one party to avoid unjust enrichment of that party’. There is no prior
agreement,offer and acceptance in a Quasi contract. Quasi contract is enforced when any person
enjoys the benefit of something but does not pay for it or the other person might have to bear the
burden of it.

The features are as follows:

1. Usually, the quasi-contracts provide the right to the money.

2. There is an absence of the contract or the mutual consent among the parties, and thus it is
imposed by the law and is not the outcome of any agreement.
3. They are based on the concept of equity, good conscience, justice, and principles of
natural justice.

Types of Quasi Contract

The types are laid down under section 68 to 72, which are mentions as below:

#1 – Section 68

It states that in case there is a person who is not capable for entering into any contract, and the
supplies are provided to him or to anyone to whom the incapable person is bound legally to
support by the third party, then the supplier third party is entitled to recovering the price of such
supplier from the incapable person’s property.

#2 – Section 69

It states that in case there is a person who has an interest in payment of money and pays on
behalf of another person who is bound to pay by the law, then the person who made the payment
is entitled to get reimbursement by another party (on behalf of whom he has paid).

#3 – Section 70

It states that in case a person does anything for the other person lawfully or gives the delivery of
something without intending to do the same gratuitously where the receiving party has enjoyed
the benefits of the same. Then such a receiving party is bound to give compensation to the
former party.

#4 – Section 71

It states that in case there is a person who finds goods that belongs to another party and takes
such goods into his custody, then the former has responsibility the same as that of a bailee.

#5 – Section 72

It states that in case there is a person who has been paid or delivered mistakenly or under the
coercion, then he must repay or must return the same back.

Difference Between Quasi-Contract and Contract

The contracts are the expressed ones that are approved by the parties under consideration as the
matter of law where they share interests and consequences though specifically expressed
conditions. In contrast, under quasi-contracts, the obligations are enforced by the law enforces
based on the conduct of the parties under consideration to prevent the undue advantage of one
party over the cost of another party.

Case on Quasi Contract

Lothamasu Sambasiva Rao vs Thadwarthi Balakotiah on 14 November, 1972

Mr. M. Jagannadha Rao also placed reliance on a passage in Anson's Law of Contract ( Twenty-
third Edition ) at page 601 : " Where one person pays money to another in pursuance of an
agreement which is ineffective, or which subsequently becomes so, he may recover from that
other the money which he has paid ". Putting the case under the head of quasi-contractual
liability, the nature of a quasi-contract is stated in Chapter XXI of Anson's Law of Contract, at
page 589 in these words : " Circumstances must occur under any system of law in which it
becomes necessary to hold one person to be accountable to another, without any agreement on
the part of the former to be so accountable on the ground that otherwise he would be retaining
money or some other benefit which has come into his hands to which the law regards the other
person as better entitled, or on the ground that without such accountability the other would
unjustly suffer loss. The law of quasi-contract exists to prove remedies in circumstances of this
kind. " The three common law actions of a quasi-contractual nature as we get from page 590 of
the same Volume are : (1) for money paid by the plaintiff to the defendant's use ; (2) for money
had and received by the defendant to the plaintiff's use and (3) quantum meruit. It is under the
first two heads that Mr. Jagannadha Rao sought to put his case as, according to him. Section 70
incorporates what is a quasi-contract in the English Common Law.
Example of Quasi Contract

A contracts with B to deliver goods to A’s residence.B accidentally delivers it to C who

consumes these goods and refuses to pay for it.

Now in the above case C has enjoyed the benefit of goods but does not pay for it and B has to
bear all the burden of it.In such cases courts order C to pay back to B as he has enjoyed the
benefit of the goods.The intention of the courts on enforcing such obligations on the person who
enjoys the benefit of goods or any sum of amount is to hold the same person to also compensate
the other person who is the provider of goods.It is to be noted that The Indian Contract,1872 has
not used the words ‘Quasi Contracts’ rather used certain relations resembling as contracts’ as per
Sex 68 of the Act. This indicates that these are not contracts but are deemed to be contracts when
the law puts certain obligations.