The Indian Contract Act, 1872 not only governs formal contracts but also recognizes certain situations where the law creates obligations between parties even without a formal agreement. These are called Quasi Contracts.
This article explains the concept, features, types, and examples of quasi contracts in an easy-to-understand manner.
Meaning of Quasi Contract
A quasi contract is not a real contract formed by mutual agreement. Instead, it is an obligation imposed by law to prevent unjust enrichment of one party at the expense of another.
Key Idea: Even without a formal contract, one party is bound to compensate the other as if there was a contract.
Example:
A mistakenly delivers goods to B instead of C. B must either return the goods or pay for them.
Characteristics of Quasi Contracts
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Imposed by Law: Arises automatically by operation of law.
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No Agreement: There is no offer, acceptance, or consent.
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Prevention of Unjust Enrichment: Focus is on fairness and equity.
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Right to Recover: The affected party can claim reasonable compensation.
Legal Basis: Sections 68 to 72 of Indian Contract Act
Quasi contracts are specifically recognized under Sections 68 to 72 of the Act.
Let us discuss the important types under these sections.
Types of Quasi Contracts
1. Supply of Necessaries (Section 68)
If a person supplies necessaries to someone incapable of contracting (like a minor or lunatic), they can recover the cost from that person’s property.
Example:
A supplies food and medicine to B, a minor. A can claim reimbursement from B’s property.
Note: Only essentials suitable to the lifestyle and need are considered "necessaries."
2. Payment by an Interested Person (Section 69)
When a person pays money that another is legally bound to pay, the payer can recover it.
Conditions:
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Payment must be made to protect own interest,
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Other party must be legally bound to pay.
Example:
A, a tenant, pays property tax which the landlord, B, was supposed to pay. 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, and the benefit is enjoyed, compensation must be paid.
Conditions:
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Act must be lawful,
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Act must not be gratuitous (free),
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Benefit must be accepted.
Example:
A leaves his goods at B’s house by mistake. B uses them. B must compensate A.
4. Finder of Goods (Section 71)
A person who finds goods belonging to someone else has the same responsibility as a bailee (caretaker).
Duties of the finder:
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Take reasonable care,
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Try to find the true owner,
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Return the goods when claimed.
Right:
The finder can claim expenses incurred for preservation and may even retain the goods until paid (lien).
Example:
A finds B’s wallet and spends money to keep it safe. A can claim expenses when returning the wallet.
5. Money or Goods Delivered by Mistake or Under Coercion (Section 72)
A person who receives money or goods by mistake or under coercion must return it.
Example:
A mistakenly pays B ₹1,000 instead of ₹100. B must refund ₹900.
Quick Summary
| Section | Type | Example |
|---|---|---|
| 68 | Supply of necessaries | Food to a minor |
| 69 | Payment by interested person | Tenant pays landlord’s tax |
| 70 | Non-gratuitous acts | Delivering goods by mistake |
| 71 | Finder of goods | Finding and safeguarding lost wallet |
| 72 | Money paid by mistake/coercion | Overpayment recovery |
Conclusion
In conclusion, quasi contracts ensure justice where one party benefits unfairly at the expense of another. Although there is no formal agreement, the law creates obligations to prevent unjust enrichment. Understanding Sections 68 to 72 is crucial for mastering this concept under the Indian Contract Act, 1872, especially for exam preparation and practical application.