Meaning
A quasi-contract is a legal obligation created by courts under certain circumstances, even though no actual contract exists between the parties. It is called “quasi” (meaning as if or resembling) because it resembles a contract in terms of enforceability but lacks the fundamental element of mutual agreement.
- Core Idea: The law imposes these obligations to prevent unjust enrichment, which means one party should not be allowed to unfairly benefit at the expense of another.
- Judicial Principle: Rooted in equity, justice, and good conscience.
Illustration: Suppose A mistakenly pays ₹10,000 to B thinking B is his creditor. If B knowingly keeps the money, the law will compel B to return it, even though no contract existed between A and B.
Legal Basis
Quasi-contracts are not based on the will of the parties but on statutory provisions.
- In Indian law, they are codified in the Indian Contract Act, 1872, under Sections 68–72.
- These provisions reflect the English law doctrine of “unjust enrichment” and “restitution.”
Thus, quasi-contracts are legal fictions: the law assumes a contract-like relationship where none actually exists to protect fairness.
Essential Features
- No prior agreement
- Unlike a valid contract, there is no proposal, acceptance, or consideration.
- Obligation arises independently of parties’ consent.
Example: A finds B’s watch on the street and keeps it safely. There was no agreement, but A has a duty (like a bailee) to return it.
- Obligation imposed by law
- It is the law that enforces duties, not the will of the individuals.
- Such obligations are enforceable in courts, just like contracts.
- Prevention of unjust enrichment
- The core objective is to stop one person from retaining a benefit unfairly.
- This principle comes from Roman law maxim: “Nemo debet locupletari ex aliena jactura” – No man should be enriched at another’s loss.
- Right to compensation
- The aggrieved party is entitled to reimbursement, compensation, or return of goods.
- Enforceable in court
- Even though there is no “contract,” the injured party can sue under these sections for recovery.
Types of Quasi-Contracts (Under Indian Law)
1. Supply of Necessaries (Section 68)
- If a person supplies necessaries (food, shelter, clothing, education, medical care, etc.) to someone incapable of contracting (minor, lunatic, etc.), he is entitled to be reimbursed from the property of such person.
- The liability is not personal but limited to the minor’s or incapable person’s property.
Example: A provides food and lodging to a minor. A can claim reimbursement from the minor’s estate, but not personally from the minor.
2. Payment by Interested Person (Section 69)
- If a person, who has an interest in making a payment that another is legally bound to pay, does so, he can recover the amount from that person.
- The principle ensures that someone who discharges another’s liability to protect his own interest is compensated.
Example: A and B jointly own a piece of land. B fails to pay land revenue. A pays it to save the property from auction. A can recover the amount from B.
3. Liability to Pay for Non-Gratuitous Acts (Section 70)
- If a person lawfully does something for another, or delivers goods to another, not intending it as a gift, and the other enjoys the benefit, he is bound to pay for it.
- Three conditions:
- The act is done lawfully.
- It is not intended to be gratuitous.
- The other person enjoys the benefit.
Example: A mistakenly leaves goods at B’s house. B uses them. B must pay A for their value.
4. Responsibility of Finder of Goods (Section 71)
- A person who finds goods belonging to another is treated as a bailee.
- Duties of finder:
- Take reasonable care of goods.
- Not use them for personal benefit.
- Return them to the true owner.
- Rights:
- Right to recover expenses incurred for preserving the goods.
- Right to lien until paid for expenses.
Example: X finds Y’s diamond ring in a park. X must care for it as a bailee and return it when Y is found.
5. Money Paid or Goods Delivered by Mistake or Under Coercion (Section 72)
- If money is paid or goods are delivered by mistake (of fact, not law) or under coercion, it must be repaid or returned.
Example 1: A bank mistakenly credits ₹50,000 to C’s account. C cannot keep it; he must return it.
Example 2: A railway company charges freight in excess under coercion. It must refund the excess amount.
Difference Between Contract and Quasi-Contract
| Aspect | Contract | Quasi-Contract |
| Formation | By mutual agreement (offer + acceptance + consideration) | Imposed by law without agreement |
| Consent | Free consent is essential | Consent is irrelevant |
| Intention | Based on intention to create legal obligation | Independent of intention |
| Scope | Wide (various kinds of contracts: sale, lease, agency, etc.) | Narrow (only situations defined in Sections 68–72) |
| Example | Sale of goods | Recovery of money paid by mistake |
