Quasi Contract

Section 68-73
Deals with FIVE different kinds of cases of
“Relations resembling those created by contract”
• Quasi means ‘almost’ or ‘apparently but not really’ or ‘as if it were’
• Obligation between parties is not contractual but one which is treated as contractual by law
• Courts create quasi contracts to protect the unjust enrichment of the parties in dispute over payment
of goods or services
• 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.
• For eg-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 Section 68 of the Act.
• The Indian Contract Act 1872 has mentioned 5 situations which are deemed to be Quasi contracts
or quasi contracts are imposed.

1. Supply of necessaries to incapable person (S-68)

2. Payment by Interest Persons (S-69)
3. Payment for Non Gratuitous Act (S- 70)
4. Rights and liabilities of a finder of the goods (S-71)
5. Payment or Delivery by mistake or under Coercion (S- 72)
 Section 68
“Claim for supply of necessaries to person incapable of contracting” Necessaries :
Illustration
# A supplies B, lunatic with necessaries suitable to his condition of life. is entitled to be reimbursed
from B’s property
# A minor studying at Cambridge was supplied with clothing, including eleven waist coats. He already
had sufficient clothing with him. It was held that the waist- coats were not necessary articles and
so he was not liable to pay for them.
When any necessary goods which are important for one’s survival are supplied to a person who is not
capable of contract, then the person who is supplying such goods has the right to recover the
amount from such person’s property.
For example Jay sends goods to Ajay who is a lunatic and for the welfare of Ajay’s young son and
daughter.Jay is entitled to receive the money from Ajay’s property.
•
Section 69
“Reimbursement of money paid, in which he is interested”
Illustration
A is bound to make good to B the amount so paid. B holds land in Bengal, on a lease granted by A, the zamindar. The
revenue payable by A to the Government being in arrear, his land is advertised for sale by the Government.
Under the revenue law, the consequence of such sale will be the annulment of B’s lease. B to prevent the sale
and the consequent annulment of his own lease, pays the Government the sum due from A. A is bound to make
good to B the amount so paid

"When one person who is interested in certain property/goods pays the amount on the behalf of the owner of the
person who is liable in the first place,then the one paying shall claim.it later from the one who is liable to pay in
the first place,i.e.the owner of the goods
• Essentials:
# There must be a person who is bound to make a payment by law. The person paying must himself not be bound to
pay. When he is jointly liable to pay, payment by him would not give him the right to recover under this section
# There must be another person interested, not bound by law, in such payment being made and interest should exist
at the time of payment.
# The payment must be made bona fide for the protection of one’s own interest
 Section 70
“Obligation of a person enjoying benefits of non-gratuitous act” (A gratuitous act is one that is performed by someone without
the anticipation of a return)
• Person lawfully does anything for another person
• Delivers anything to him non-gratuitously
• Latter is bound to make compensation or restore the thing so done or delivered
• The thing must be done lawfully
• The person for whom the act is done must enjoy the benefit of it.
# A, a tradesman, leaves goods at B’s house by mistake. B treats the goods his own. He is bound to pay for them
# A saves B’s property from fire. A is not entitled to compensation from B, if the circumstances show that he
intended to act gratuitously
 Section 71
“ Responsibility Of Finder Of Goods” His rights:
• Entitled to retain the goods until he receives the lawful charges or compensation for retaining the goods and taking
care of them.
•However, he cannot sue for such compensation unless a specified reward has been advertised by the owner.
• Entitled to possess the goods until the true owner is found.
When any person who finds the goods and knows that such goods belong to another person then he is responsible
for the safety of the goods and to return it back to the owner of such goods.
•Can sell the goods when
:# Commodity is perishable
# Owner cannot be found
# Owner refuses to pay compensation
# Compensation amounts to 2/3rd of the value of the commodity
His liabilities:
• Responsible to take care of the goods as if they were his own
• Must with reasonable diligence trace the true owner
For eg A came to A shop owned by B and while purchasing forgot his Mobile in the shop.B came to know that A has
forgotten his mobile. B is now responsible to keep the mobile safely with him and return it to A.
 Section 72
• “Liabilities of a person to whom money is paid or thing delivered 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.
Illustration:
•A and B jointly owe Rs.100 to C. A alone pays the amount. B not knowing it also pays to C. C is bound to repay the
amount to B.
•A railway co. refuses to deliver certain goods to the consignee, except upon the payment of illegal charge for
carriage. The consignee pays the sum charged in order to obtain the goods. He is entitled to receive the excessive
amount as paid by him.
Where any person receives payment under some misunderstanding or coercion then he is
liable to return such payment made to him by the other person.For eg Z and Y owe
money to D ,jointly and Z pays the money to D owed by both of them.Y unaware of the
transaction pays the amount to D again.Now D is liable to return the money to Y.
 Contract
Results from the will of the
parties expressed with a view to
create an obligation
Is an agreement
Has certain essential elements
Is a full fledged contract and is
binding
Quasi Contract
Is an obligation resembling that
created by a contract
There is no agreement at all
Essentials for formation of a
contract are absent
Resembles a contract. not a full
fledged contract. is an implied
contract