CONTRACT ACT 1872

QUASI CONTRACT
Aarti dadhich
LLM - CORPORATE LAW
 TOPIC:
QUASI CONTRACT

1.INTRODUCTION
2.DEFINITION
3.BASIS OF QUASI CONTRACT
4.KIND OF QUASI CONTRACT
INTRODUCTION
vcontract=agreement+ enforceable by court of law
vA Contract can only be enforced only when it has the essential elements of a valid

contract , namely, offer and acceptance, free consent, lawful object and
consideration, the capacity of the parties to contract.
vBut legal rights and obligations can be enforced in the courts of law even if there is no

essential of a valid contract.

Quasi=almost or apparently
contract=an agreement enforceable by law.
vA quasi contract is not a real contract at all, because the essential elements for the

formation of a contract are absent.

It is based on principle of equity.


 Definition
v Obligation between parties is not contractual but one which is treated as
contractual by law.
v Courts create quasi contracts to protect the unjust enrichment of the parties
in dispute over payment of good or services.
v Indian contract act does not use the term quasi contract it describes the quasi
contracts: as certain relations resembling those create by contract.”
v It is a right which is available not against the entire world, but against
particular persons only.
v Example: A person in whose home certain goods have been left by mistake
is bound to restore them. Such obligations are generally described, for want
of a better or more appropriate name, as quasi-contractual obligations.
v


Basis of quasi contract
 Quasi contract are based on the maxim of “Nemo debet Locuplatari ex
Liena justua’’ means No man must grow rich out of another person’s
cost.
 This is based on equitable principle.
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 Case: Mahabir kishore v. state of MP AIR 1990
 Unjust enrichment requires:
The defendant has been enriched by the receipt of a benefit
The enrichment is at the expenses of the plaintiff
The retention of the enrichment is unjust.
 Features of quasi contractual rights:-
 A quasi contract is not a real contract.
 It is not based upon the offer and acceptance rule.
 It dose not arise from any formal agreement but it is
imposed by law.
 It is a right which is available not against the entire world,
but against particular person’s only.
 Right to get sum of money.
 Parties who get benefit may particular persons.
Kinds of quasi contract
chapter V of The Indian contract act :- deals with such
situation under the heading Of certain relations resembling
those created by contract.
Indian contract Act sec 68 to 72:
A. Section 68: Supply of necessaries to person who is incompetent
to contract.
B. Section 69: payment by an interested person.
C. Section 70: Non-gratuitous act.
D. Section 71: Responsibility of finder of goods.
E. Section 72: payment of money or delivery of goods by mistake
or under coercion.
 Section 68

“ Supply of necessaries to person who is incompetent to contract’’

Necessaries:

§ Things suited to the conditions of incompetent parties.

§ Includes articles required to maintain a particular person in the state and degree in the life in

which he is.

§ Article without which an individual cannot reasonable exist.

§ ILLUSTRATION:

• A supplies B lunatic with necessaries suitable to his conditions of life, is entitled to be reimbursed from

B’s property.

• A minor studying in cambridge was supplied with clothing including eleven waist -wats. He already had

sufficient clothing with him. It was held that the waist -wats were not necessary articles and so he was

not liable to pay for them.

•
Section 69:
“payment by an interested person.”
§ A person who is interested in payment of money. Which another is
bound by law to pay and who therefore pays it is entitled to be
reimbursed by the other.
§ A person must by law be bound to pay some money.
§ Another person must be interested in the payment of that money.
§ The other person must have paid the money because of such
innterest.

Example: A holds land in Bengal on a lease. B is the owner of the

land. The land revenue payable by B to the government is in
arrears and therefore the government advertised the land for
sale to recover the dues. To prevent the sale of land A pays the
arrears of land revenue. In this case B is bound to reimburse the
amount to A.
Case: Hazari Lal vs. Naurang Lal ( lease case )
§
Section 70:
Payment for non- gratuitous act
Where a person lawfully does anything for another person or
delivers anything to him not intending to do so gratuitously
and such other person enjoys the benefit thereof, the later is
bound to make compensation to the former in respect of or to
restore the thing so done or delivered.
Example: A, a tradesman, leaves his goods at B’s house by
mistake. B treats the goods as his own and uses them. B is
bound to pay for the goods.
Case : Damodar Mudaliar vs. Secretary of state for India 1894
(Irrigation tank)
§ Section 71:
Responsibility of finder of goods:
§ A person who finds goods belonging to another, and takes them
into his custody, is subject to the same responsibility as a bailee.
§ Such goods does not become the property of the finder.
Duty of finder of goods:
§ Adequate care
§ Try to trace
§ Return the goods
§ Reimbursed expense
§ Cannot sue the owner
The finder can retain the goods in the following cases:
§ Reasonable diligence
§ Owner refuses to pay lawful charges
§ Expense of the finder
Case : Hollins vs. Fowler ( Diamond )
Section 72:
Money paid by mistake or under coercion:
A person to whom money has been paid or anything
delivered by mistake or under coercion, must repay or
return it.
Example: A and B jointly owe Rs 10000 to C. A alone pays
the amount to C without the knowledge of B. later, B
also pays Rs. 10000 to C to clear the loan. Here C is
lawfully bound to return the amount paid by B.
Conclusion:
A quasi-contract exists in the absence of a
written contract and may be court ordered to avoid
one party gaining at the expense of another party’s
actions.
It can be said that Quasi contracts are not
contracts as per Indian Contract 1872 but
obligations imposed by law and only in certain
situations.Quasi contracts only creates obligation so
that there is no unjust enrichment on one party.
Thank You