Quasi Contract

quasi-contract

Quasi-contract is declared by law as valid contracts on the basis of principles of equity i.e., no person shall be allowed to enrich himself at the expense of another the legal obligation of parties remains the same.

Nature of Quasi-contract:

  1. A quasi-contract does not arise from any formal agreement but is imposed by law.
  2. Every quasi-contract based upon the principle of equity and good conscience.
  3. A quasi-contract is always a right to the money and generally though not always to a liquidated sum of money.
  4. A suit for its breach may be filed in the same way as in case of a complete contract.
  5. The right grouted to a party under a quasi-contract is not available to him against the whole world but against a particular person(s) only.
  6. A suit for breach of a quasi-contract may be filed in the same way as in case of an ordinary contract.
  7. Although there is no contract between the parties under a quasi-contract, yet they are put in the same position as if he were a contract between them.





The provision relating to the various quasi-contract are contained in Section 68 to Section 72 of the contract act, 1872.

Types of quasi-contract:

  • Section 68: supply of necessaries
  • Section 69: Reimbursement of money due
  • Section 70: obligation to pay for benefit out of the non-gratuitous act
  • Section 71: Responsibility of finder of goods
  • Section 72: Person receiving goods is money by mistake

Claim for necessaries supplied to a person incompetent to contract (Section 68):

If a person, incapable of entering into a contract, or anyone whom he is legally bound to support, is supplied by another person, with necessaries suited to his condition in life, the person who has furnished such supplies is entitled to be reimbursed from the property of such incapable person.

Meaning of necessaries:

  1. Necessaries normally include articles required to maintain a particular person in the state, degree and station in life in which he is.
  2. They are essentials to run a life.
  3. An item will not be considered necessary if a person already has a sufficient supply of thing of such kind.
  4. Necessaries include services rendered to a person.
  5. What constitutes necessaries depends on the circumstances of each case.
  6. Only property is liable, a person is not liable.
  7. It is only the property (movable and immovable) of the incapable person they shall be liable.
  8. He cannot be held liable personally.
  9. Where he doesn’t own any property, nothing shall be payable.





Example:

  • A supplies B, a lunatic, with necessaries suitable to his condition in life. A is entitled to be reimbursed from B’s property.
  • A who supplies the wife and children of B, a lunatic, with necessaries suitable to their condition in life, is entitle to be reimbursed from B’s property

Payment By A person who Is Interested In A Transaction (Section 69)

Condition of Section 69 

Section 69: A person, who is interested in the payment of money and pays such money, which another is bound by law to pay, is entitled to be reimbursed by the other.

  • one party is legally bound to make a payment
  • Some other persons make such payment
  • The persons making such payment is not legally bound to make such payment
  • The person making such payment is interested in paying such amount.

Legal effect of Section 69: 

If all the conditions of Section 69 satisfy the person who is interested in paying such amount shall be entitled to recover the payment made by him.

Example: The goods belonging to A were wrongfully attached in order to realize the arrears of government revenue due by B. A paid the amount to save the goods from sale at was held that A was entitled to recover the amount from B.

The obligation of Person Enjoying Benefit of Non–Gratuitous Act (Section 70)

Conditions of Section 70

Section 70: 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 benefits thereof, then he is bound to make compensation to the other in respect of, or to restore the thing so done or delivered.

  • A person has lawfully done something for another person or delivered something to another person.
  • Such person must have acted voluntarily and non – gratuitously.
  • The other person has enjoyed the benefit of the act done for him or the thing delivered to him.

Legal effect of Section 70:

  • If the conditions of Section 70 are satisfied, there will be quasi-contract between the parties.
  • Consequently, the party who has done something or delivered a thing shall be entitled to recover its value from the person who obtained the benefit of the same.

Example: A a tradesman leaves goods at B’s house by mistake, B treats the goods as his own, He is bound to pay A for them.

  • A saves B’s property from fire. A is not entitled to compensation from B if the circumstances show that be intended to act gratuitously.

Finder of Goods (Section 71)

A person who finds goods belonging to another and takes them into custody is subject to the same responsibility as a Bailee.

A finder of goods has the same rights and duties as that of the bailee.

  • Duty to take reasonable care of the goods.
  • Duty not to use the goods for his own purpose.
  • Duty not to mix the goods with own goods.

Right to recover expenses, reward, sell the goods

Example: X a guest found a diamond ring at a birthday party of Y. X told Y and other guests about it. He has performed his duty to find his own. I f he is not able to find the owner he can retain the ring as bales.

Money Paid Under A Mistake or Conversion (Section 72)

Section 72: A person to whom money has been paid, or anything delivered by mistake or under coercion, must repay or return it.

Condition of Section 72

  • A person has:
    • Paid money to another person or
    • Delivered something to another person
  • Such person must have acted
  • Under a mistake or under coercion.

Legal effect: Quasi-contract, recover its value from the person who obtained the benefit of the same .

Example: A and B jointly owe Rs 1,000 to C, A alone pays the full amount to C and B not knowing this fact, pays Rs 1000 again to C. C is bound to repay the amount to B.

A railway company refuses to deliver certain goods to the consignee except upon payment of an illegal charge for carriage. The consignee pays the sum charged in order to take delivery of goods. He is entitled to recover so much of the charge as was illegally excessive.

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