UNIVERSITY SCHOOL OF LAW AND

LEGAL STUDIES, GGSIPU

LAW OF CONTRACTS

ASSIGNMENT-1

QUASI CONTRACTS

Submitted by: SIMRAN

Enrolment number: 06316503820
Submitted to: DR RAKESH K. HANDA
QUASI CONTRACTS
In many situations, one of the parties is obliged to compensate the other party even though
there was no contract between both the parties nor any tort on the party who’s bound for
compensation. This shows that the basis of the obligation is that no one should have an unjust
benefit at someone else’s cost. A Quasi contract is an obligation imposed by law to prevent
unjust enrichment. It is based on the principle of equity, justice. The word Quasi means
“pseudo” hence known as quasi contract. Quasi Contract enforces indirect contract rather than
direct contract. For example: if Aryan orders food from an online food delivery app. Aryan went to
the washroom and at that very time the order arrives and Nitiesh receives the order and
enjoys the meal. In this case, Nitiesh is obliged to pay to The following essentials are to be
proved to call an action unjust enrichment:

1. The defendant has been ‘enriched’ by the receipt of a benefit’.

2. The enrichment is ‘at the expense of the plaintiff’.
3. The retention of the enrichment is ‘unjust’.

In the Indian Contracts Act, 1872, Quasi contracts have not been mentioned anywhere but
they do come under sections 68-72 which deals with ‘certain relations resembling those
created by contracts’. It incorporates those obligations which are known as ‘Quasi Contracts’.
It is also known as constructive contracts.

Section 68 to 72 from the Indian contracts act provide for five kinds of quasi contractual
obligations:

1. Claim for necessaries supplied to a person incompetent to contract (section 68).

2. Reimbursement of money paid, due by another (section 69).
3. Obligation of person enjoying benefit of non-gratuitous act (section 70).
4. Responsibility of finder of goods (section 71).
5. liability of a person getting benefit under mistake or coercion (Section 72)

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. Even if there’s no
involvement of any agreement between the parties, the contract is created by the court’s
order. A Quasi contract does not involve any essentials of a valid contract as defined under
Indian Contract Act 1872.
ESSENTIALS FOR A VALID CONTRACT: A valid contract should have all essential
elements including offer, its communication, meeting of minds, acceptance, communication
of acceptance, consideration, capacity, legality. The two main essential elements of
a contract are:

1. An Agreement 
2. Enforceability of this agreement by law.

QUASI CONTRACTUAL HISTORY

Under common-law jurisdictions, quasi contracts originated in the Middle Ages under a form
of action known in Latin as indebitatus assumpsit, which translates to being indebted or to
have undertaken a debt. This legal principle was the courts' way of making one party pay the
other as if a contract or agreement already existed between them. So the defendant’s
obligation to be bound by the contract is seen as implied by law. From its earliest uses, the
quasi contract was typically imposed to enforce restitution obligations.

A BRIEF DESRIPTION OF THE QUASI CONTRACTUAL OBLIGATIONS

1. Claim for necessities supplied to a person incompetent to contract

Where necessaries are supplied to a person who in incompetent to contract like a
lunatic or a minor or to someone whom he is legally bound to support, then, the
supplier get reimbursement from the property of the incompetent person.
Section 68 states that: Claim for necessaries supplied to person incapable of
contracting, or on his account— 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.
Illustrations:
 Arjan supplies Adwik, a lunatic, with necessaries suitable to his condition in life.
Arjan is entitled to be reimbursed from Adwik’s property.
 Esha supplies the wife and children of Aman, a lunatic, with necessaries suitable
to their condition life. Esha is entitled to be reimbursed from Aman’s property.

The main reason behind its formation was for helping unsound and minor
population. Due to the benefit given to the supplier, then tend to lend a helping
hand towards these people and he/she can claim over the property of that very
person afterwards.
 2. Reimbursement of money paid, due by another
A person who paid a sum of money which another is obliged to pay, is entitiled to be
reimbursed by that other person provided the payment has been made by him to
protect his own interest.
Section 69 states that:  Reimbursement of person paying money due by another, in
payment of which he is interested. —A person who is interested in the payment of
money which another is bound by law to pay, and who therefore pays it, is entitled to
be reimbursed by the other.
Illustrations: Arkita holds land in Bengal, on a lease granted by Aryaa, the
zamindaar. The revenue payable by Arkita to the government being in arrears his land
is advertised for sale by the government. Under the revenue law the consequences of
such sale will be annulment of Arkita’s lease. Arkita to prevent the sale and the
consequent annulment of her own lease, pays to the government the sum due from
Aryaa. Arkita is bound to make good to Aryaa the amount so paid.

Conditions: The followings are the conditions mentioned in section 69.

 The payment made should be bona fide for the protection of one’s interest.
The person who’s paying at the place of someone who’s bound to pay by law and
asks for reimbursement must have an interest in making the payment. In England,
if someone except the person who was liable by law pays for a party, the other
person bounded by law can ask for reimbursement from the one who made the
payment whereas in India, having an interest to make payments is enough. This
example will explain the English law completely. For example: ‘if A is
compellable to pay B damages which C is also compellable to pay B, then A,
having been compelled to pay B, can maintain an action against C for money so
paid, for the circumstances raise an implied request by C to make such payment in
his case. In other words, A can call upon C to indemnify him.’

CASE LAWS:

a. In brook’s wharf v. Goodman brothers, the defendants warehoused certain goods

which they had imported from Russia, with the plaintiffs. The goods were stolen. Under
the law the customs duty on the goods could be recovered either from the owners of the
 goods, or from the warehouseman. The warehouseman, i.e., the plaintiffs were called
upon to pay the customs duty which the owners of the goods, i.e., the defendants were
bound by law to pay. The plaintiffs claimed the amount of the duty paid by them from
the defendants. It was held that they were entitled to recover the same.
b. In Exall v. Partridge, the plaintiff placed his carriage in the defendant’s premises. Since
it was lying in the defendant’s premises, his landlord seized it as distress because the
defendant was in arrears of rent. The plaintiff had to clear the arrears of rent, which were
otherwise to be paid by the defendant, and got his carriage back. It was held that the
plaintiff was entitled to recover from the defendant the rent so paid by him.

Section 69 has been explained by an illustration, according to which if a landlord is in arrears

of some land revenue to the Government, and the tenant, in order to avoid the sale of that
land by the Government and consequential cancellation of the lease in favour of the tenant,
makes the payment of the land revenue, he is entitled to recover the money so paid, from the
landlord. The landlord was bound to pay the land revenue, and the tenant has an interest in
making the payment, because otherwise there is a fear of his lease being cancelled, and
therefore, the tenant can make a claim under section 69.

Therefore, the plaintiffs interest in making the contract is necessary. One person making
voluntary payment of another person’s debt, without having an interest in the payment, cant
seek reimbursement from the other.

 When the other person fails to do so even though he was bounded by law.

The supplier or the person who’s paying is authorized to get reimbursement from the
person who was bound to pay if these conditions are met.

The provision is based on the principle that the plaintiff, having discharged the
defendant’s debt, is entitled to be reimbursed by him. If the plaintiff is not merely
interested but he himself is bound to pay and also pays, he cnnot have an action
against the defendant

CASE LAWS:

a. In port trust, madras v. Bombay company, an employee of the port trust was when
injured on duty, and the plaintiffs an
 3. Liability to pay for Non-Gratuitous Act

Section 70 of the Contract Act states : 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 make compensation to the former in respect
of, or to restore, the thing so done or delivered.

Following three conditions must be satisfied before Section 70 can be applied:

1. A person should lawfully do something for another person or deliver

something to him

When a person does something for another person or delivers anything to him not
intending to do so gratuitously, he is entitled to claim compensation for the same
from such other person.

The point may be explained by referring to the decision of the Allahabad High
Court in Indu Mehta v. state of UP. In this case, Miss indu Mehta she rendered
her service to the state but it was void under the section 24 (2), criminal procedure
code, 1973. It was held that even though the said appointment was void, the state
had enjoyed the services of indu Mehta. So, the government couldn’t get back the
fees which was already paid to her.

In damodar mudaliar v. secretary of state for india, the government repaired a

certain tank, which would irrigate the lands of the government as well as the
zamindaars. But the cost of repairing was bared only by the plaintiff’s side. Even
though, the zamindaar knew about all this happening, they still enjoyed the
benefits of repairs being done by the government. It was held that the plaintiff was
entitled to recover from the defendants the part of the cost of repairs in proportion
to the lands belonging to the defendants

2. In doing the said thing or delivering the said thing he must not intend to act
gratuitously
3. The other person for whom something is done or to whom something is delivered
must enjoy the benefit thereof.
In cases falling under Section 70 the person doing something for another cannot sue for
specific performance nor ask for damages for breach as there is no contract between the
parties. All that Section 70 provides for is that if the services or goods are accepted a liability
to pay arises.

The person for whom the act is done is not bound to pay unless he had the choice to reject the
services. Also it is necessary that services should have been rendered without any request and
lawfully. The defendant must have derived a direct benefit from the payment or services.