In English law, a ‘quasi-contract’ is called ‘certain relations resembling those created by contract’ in the Indian Contract Act. Thus, the concept of “Quasi-Contract” is enshrined in the Contract Act as “certain relations resembling those created by contract.”

‘Quasi’ means “as if” or “like” a contract but not contract as such. Each contract requires a formative and consequential part. The formative part contains proposal, acceptance, competency of parties, consideration, free consent and a lawful object. The consequential part contains the actual discharge of the contract, i.e., the ultimate consequence by way of performance, frustration or breach of contract. In the ‘quasi-contract’, the first part, i.e., the formative part, is absent, but still, the law imposes some obligation on the other party. The parties create these obligations through contract; therefore, they are called in the Indian Contract Act, “obligations or the relations resembling those created by contract”. They are not the outcome of the party’s agreement, but in certain cases, the law presumes such relations like those created in the contract.

II] Evolution of the concept of ‘Quasi Contract’:-

Lord Mansfield is considered to be a founder of a ‘quasi-contract’ obligation. He explained the quasi-contract principle in Moses V/s Macferlan in 1760 as “law, as well as justice, should try to prevent unjust enrichment[2] , i.e. enrichment of one person at the cost of another.”[3]. The quasi-contract is based on the principle of natural justice and equity.

III. Provisions of ‘Quasi Contract’ under ‘Indian Contract Act’:-

Ss. 68 to 72 of the Indian Contract Act incorporates the principle of quasi-contract under the heading of ‘certain relations resembling those created by contract’ as follows:-

1) Necessaries supplied to an incompetent person[4] (S. 68):-

Minor’s agreement is void ab initio. However, necessaries supplied to minors are exceptions to this rule. In other words, the minor has to be reimbursed for the necessities supplied to him by the other person. The obligation of a minor /lunatic to pay for necessaries supplied is not based on liability under contract but on quasi-contract. S. 68 of the Act[5] provides that if a person is incapable of entering into a contract, or anyone whom he (Minor) 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.

Illustration

(a) A supplies B, a lunatic, with necessaries suitable to his life. A is entitled to be

reimbursed from B’s property.

(b) A supplies the wife and children of B, a lunatic, with necessaries suitable to

their condition in life. A is entitled to be reimbursed from B’s property.

Meaning of “Necessaries”-

“Things necessary are those without which an individual cannot reasonably exist. In the first place, there is no doubt about food, raiment, lodging and the like. Again, by properly cultivating the mind, we may say that the support of the body, instruction in art or trade, and intellectual, moral, and religious education may also be necessary.[6]”. What is necessary is the question of fact, which is to be decided in each case.

In Bechu Singh V/s Baldeo Prasad[7]

The debt incurred for performing the funeral obsequies of the father of a minor is a necessity and is recoverable.

2) Reimbursement of expenses incurred by the person who is interested in payment[8] (S. 69):-

A person interested in the payment of money that another is bound by law to pay and who, therefore, pays it is entitled to be reimbursed by the other.

Illustration

B holds land in Bengal on a lease granted by A, the Zamindar. The revenue payable by A to the Government is in arrears, so his land is advertised for sale by the Government. Under the revenue law, the consequence of such a sale will be the annulment of B’s lease. B, to prevent the sale and 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.

3) Obligation of a person enjoying benefits of the non-gratuitous act[9] (S.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 benefit thereof, the latter is bound to compensate the former in respect thereof or restore the thing so done or delivered.

Illustrations

(a) 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.

(b) 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.’

In Damodar Mudaliar V/s Secretary of State for India[10]

Facts: An already existing tank was providing water to eleven villages for irrigation. Some of the villages were Zamindari villages, and the others were under Government control. The government made certain repairs and improvements to preserve the tank and improve its capacity. The Government did not intend to do it gratuitously, and the Zamindars enjoyed the benefits thereof.

The Court held:- Zamindars were held liable to pay proportionate expenses to spend by the Government.

4) Responsibility of Finder of Goods[11] (S.71):-

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

A finder of goods is a bailee thereof and, as such, bound by the duty of reasonable care. He is bound to return the goods to the owner when found.

Rights of Finder of Goods: –

(1) Right to Lien[12] (S.168):-

A finder of goods has a right to retain the goods against the owner until he receives compensation for trouble and expenses voluntarily incurred by him:-

i) to preserve the goods, and
ii) to find out the owner.

But he cannot sue in court for such trouble and expenses.

(2) Sue for Reward[13] (S. 168):-

Where the owner has offered a specific reward for the return of goods lost, the finder may sue for such reward and may retain the goods until he receives it.

(3) Right to Sell (S.169):-

Where the thing found is commonly the subject of sale, and if the owner cannot be found with reasonable diligence, or if he refuses to pay the lawful charges of the finder, the finder may sell the goods: –

i) When the thing is in danger of perishing or of losing the greater part of its value or
ii) When the lawful charges of the finder, in respect of the thing found, amounts to two third of its value.

5) Obligation arising out of money paid under Coercion, Mistake or Voidable contract (S. 72):-

A person to whom money is paid (or anything delivered) by mistake or under coercion should repay or return the same.

Illustrations

(a) A and B jointly owe 100 rupees to C. A alone pays the amount to C, and B, not

knowing this fact, pays 100 rupees over again to C. C is bound to repay the amount to B

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

Mistake under S. 72 covers both mistakes of fact as well as mistakes of law.

In Saseendrakumari V/s State Bank of India[14]

Fact: – Amount credited twice in the account of the defendant by mistake.

Held: – Defendant cannot enrich at the cost of the Bank. Defendant has to remit extra Credited amount.

*****

[1] करारा सारखी जबाबदारी – अशी जबाबदारी जी कराराने निर्माण केल्या प्रमाणे अंमलबजावणी केली जाते परुंतु ती कराराने आलेली नसते [करार जैसे ज़िम्मेदारी बनानेवाले संबंध, जो करार नाही है।]

[2] कानून और न्याय को अन्यायपूर्ण संवर्धन को रोकने का प्रयास करना चाहिए [अयोग्य / अनुचित लाभ]

[3] दुसऱ्या व्यक्तीस हानी दुसऱ्या व्यक्तीस हानी करून एखाद्या व्यक्तीस लाभ करणे यास अयोग्य / अनुचित लाभ म्हणतात [एक व्यक्ति को दूसरे की कीमत पर समृद्ध करना]

[4]अज्ञान व्यक्तीस पुरवलेल्या आवश्यक सुविधा साठीचा खर्च.[अक्षम व्यक्ति को आपूर्ति की जाने वाली आवश्यकताएं]

[5] Indian Contract Act

[6] Alderson B (J) in Chappel v Cooper (1844).

[7] AIR 1933 Oudh 132.

[8] देय्य रक्कम देण्यात ज्याचे हित आहे अश्या विअक्तीस त्या रक्कमेची परत फेड करणे [भुगतान में रुचि रखने वाले व्यक्ति द्वारा किए गए खर्चों की प्रतिपूर्ति]

[9] फुक्कट म्हणून न केलेल्या क्रत्याबद्दल फायदा घेणाऱ्या व्यक्तीची जबाबदारी [गैर-अनर्जक कार्य के लाभों का आनंद लेने वाले व्यक्ति का दायित्व]

[10] (1894) 18 Mad. 88.

[11] ज्या व्यक्तीस वस्तू सापडली त्या व्यक्तीची जबाबदारी [माल के खोजक की जिम्मेदारी]

[12] स्वतः कडे ठेवण्याचा अधिकार [माल रखने का अधिकार]

[13] बक्षीस मिळविण्याठी दावा करण्याच अधिकार [इनाम के लिए मुकदमा]

[14] (AIR 2011 Ker 58)