This article has been Written by ELAVARASI. P from THE TAMIL NADU Dr. AMBEDKAR LAW UNIVERSITY

INTRODUCTION :

Indian contract act was enforced on 1^st September 1872 by the parliament of India. This Act contains all the provisions regarding what a contract is, what are the essentials of a contract, who are the parties to the contract, what are the essentials to form a contract and so on. A Contract is an agreement between the parties which is legally enforced by the law. So, what if there is no contract between the parties but one person is liable to another person as if they are in a contract and he have to do a specific performance? Here comes the term ‘Quasi contract’. In the Chapter V of the Indian Contract Act, from Section 68-72 states about quasi contract. In this article let’s briefly talk about what is a quasi contract and how are they enforced by the law with some relevant case laws.

MEANING :

• The term ‘Quasi’ literally means pseudo. It means Quasi contract is a pseudo contract.
• For a contract to be valid, the parties to the agreement must have agreed with each other and it must be enforced by law.
• The contract must have a legal object in it. The contract have certain elements like offer, acceptance, consideration and capacity to the contract.
• For a contract to be valid, the above mentioned things are necessary but there are certain contracts which differs from it like Quasi contract ( where there is no prior agreement between the parties), gift deed (where there is no consideration) and so on.
• There are also certain cases where the law itself imposes certain obligations on two persons as if they are in a contract. Such type of contracts shall be considered as a Quasi contract.
• Also the main principle for this quasi contract is justice, equity and good conscience.
• Quasi contract is also based on a maxim “no man shall grow rich out of another person’s loss”.
• This quasi contract mainly states about the non- gratuitous act done by a person which must be reimbursed by another person who have enjoyed benefits from that act.
• It also involves Doctrine of Unjust enrichment.

LEGAL FRAMEWORKS :

Section 68 :

• Necessaries supplied to the person incapable of contracting.
• It states that if a person who is incapable of contracting such as minor or a lunatic is taken care of by any person then that person who provides all the necessity of another shall get a reimbursement for the work that he have done.
• For example : Karan is a lunatic person and Mahesh is the one who supplies all the basic necessities like food and clothing and takes care of him. Here there is no contract enforced between them. But Mahesh can claim the reimbursement for the work that he have done so far from the property of Karan. Here, there is a Quasi contract between Karan and Mahesh.
• But to claim reimbursement the party claiming must prove two things. They are;
• Prove that other party is lunatic / minor / not capable of taking care himself.
• The goods and services delivered are necessary for the other person at the time of delivering it.

Section 69 :

• Reimbursement of a person paying money due for another person who he is interested in.
• It states that if a third party who is interested in other party pays the money for him which must be paid then he shall have reimbursement for the money he have paid.
• For example : Let us considered landlord and tenant. There is a situation where the landlord must pay water tax to the government and it’s in due time to pay it. When the officials asked him to pay the tax but landlord does not have enough money to pay. Here, the tenant voluntarily takes interest in the situation and pays the tax on behalf of the landlord. By doing so, the tenant is entitled to reimburse his money that he have paid for the landlord. Also the landlord is liable to repay the amount that the tenant has paid on his behalf.

Section 70 :

• Obligation of a person enjoying benefits from a non-gratuitous act.
• It states that when a person lawfully does an act or give something to a person which is non- gratuitous in nature and the person who derives the benefit from that non gratuitous act has the responsibility to compensate the other party for delivering that act.
• For example : Kavina was bedridden for nearly 5 years due to certain disorder in her body. Nandu took care of kavina who is not even a blood relation for nearly 5 years and did all kinds of Work for kavina who is bedridden. She also took care of her and provided all the necessities for free of cost. After 5 years kavina was cured. In this case, regardless of whether kavina is cured or not, nandu has all the right to claim reimbursement from Kavina because the work that Nandu did for Kavina is not a gratituous act. She is entitled to claim reimbursement from kavina who had enjoyed the benefits given by Nandu.

Section 71 :

• Responsibility of Finder of the goods.
• It states that when a person finds a good that belongs to some other person and takes them into his custody, then he shall have certain responsibilities that he must follow. They are ;
• The person who finds the goods must take care of the goods.
• He must not misappropriate the goods for his own use.
• He must restore the goods to the original owner if he finds that owner.
• For example : Mary went to a boutique shop to buy some dresses that she desires. She brought the dresses but forgot her purse and left it in the boutique shop. It is the responsibility of the person who noticed that purse and he is responsible to handover the purse to Mary when she returns and enquiries about her purse. If the person in charge of the boutique is the one who took the purse to return it have misappropriated the money in the purse or lost the purse then he is liable to restore the money.

Section 72 :

• Money paid or thing delivered by mistake or under coercion.
• This section states that if a person acquires money or goods by mistake or under coercion then he shall be liable to repay those goods or return them.
• For example : Karina went to supermarket and buys tomato. Karina doesn’t know that her sister has already paid for the tomato. Not knowing the fact, Karina also pays the amount for the tomato. Here it is the responsibility of the owner of the supermarket to return the money that was given by mistake. Similarly if a money paid by coercion that is, by using force, oppression or extortion then the money paid by such means should also be recovered as per the law.

FEATURES OF QUASI CONTRACT:

• Quasi contract is not a actual contract. It is a contract that is enforced upon the parties by the court. It is not based on the mutual agreement.
• The offer and acceptance rule is not used here.
• There is no pre-agreement between the parties but the parties have to do certain obligation because they are imposed by the law.
• It is not a right against whole world but against a specific person.
• Quasi contract shall be considered as an idea based on justice, equity and good conscience.
• The concept of restitution also involved in it because the party who gained benefit from the other party must restore that benefit to him.

CASE LAWS :

N. P. C. Wadhwa v State of Punjab

In this case, the applicant had undergone training for IFS but he was selected upon IPS and the court held that he have enjoyed the benefit of training which was non gratituous and the court held that under section 70 of Indian contract act he is liable to pay the compensation to the state.

Indu Mehta v State of Uttar Pradesh

In this case Indu Mehta was an advocate and he was appointed as a assistant director, government counsel where she rendered her services. After a while, it is found that the appointment was void. The court held that the state has enjoyed the benefits from the services rendered by Indu Mehta. Thus, the government shall not recover back the fees that was already paid to her for the services she rendered.

Damodara Mudaliar v Secretary of State for India

In this case, the village people draws irrigation water from a tank. Some of the villages were under the direct state tenancy, and the others are under the zamindars. The government carried out a repair work on the tank. The zamindars also enjoyed the benefits of those repairs for that tank. Thus the zamindars were held liable to make a contribution towards the repair work for the tank. This case showed that if a party makes a payment or renders services to a person who is interested in the matter then he can recover the proportional contribution from those who have enjoyed the benefits from the services.

United Bank of India v A. T. A. K. Hussaini

In this case it is said that if the person received the money by mistake which has already been paid is required to repay the amount that he received from other person.

OTHER COUNTRIES :

United States :

United States has laws on the quasi contract. One of the important case is Bailey v West. In this case, the court recognised the doctrine of Quasi Contract and it also held certain essential elements of a quasi Contract like benefit conferred upon defendant by the plaintiff, appreciation by defendant of such benefit and acceptance and retention by defendant of such benefit under such circumstances that it would be inequitable to retain the benefit without the payment of the value thereof. It is to be noted that United States has the laws relating to the Quasi contracts just similar to Indian contract act. They depend on concept of unjust enrichment and it’s laws are governed under common law.

United Kingdom

Similarly United Kingdom also deals with the concept of unjust enrichment which is governed by the common law. The landmark case of Quasi contract in United Kingdom is Lipin Gorman v Karpnale Ltd. This case is the most famous case which noted the issues of unjust enrichment that is getting rich on other person loss and also talks about restitution ( restoration of benefits that is delivered).

SUGGESTIONS :

• Before understanding what is a quasi contract, it is necessary to know what a contract is and what are the essential features that are required to form a contract.
• It shall be very useful to compare contract and a quasi contract to identify the similarities and dis similarities between them.
• It is very much important to prove that there is a quasi contractual binding between the parties.
• To get compensation by the aggrieved party he must prove certain conditions stated in the above mentioned provisions.
• It is also important to know the judgements relating to the specified concepts.

CONCLUSION :

The concept of quasi contract is based on the doctrine of unjust enrichment which means no one shall get a benefit at the loss of another person. By this doctrine, we can understand that a person who does certain act to another person which is non gratuitous while the other person gets all the benefits that were obtained by the act done by other person then he shall be deemed to provide compensation. Under Section 68 to 72 of Indian Contract Act, the concept of quasi contract has been stated clearly. India has build its constitution by borrowing certain laws from other countries. Thus, it is not new to know certain laws and provisions similar to other countries. Hence by this article, we got a clear understanding of what is a Quasi Contract and the provisions involved in the Indian contract act 1872.

REFERENCE :

Quasi contract, available at unacademy.com/content/upsc/

Quasi contract, available at https://www.toppr.com/guides

Quasi contract, available at https://www.law.cornell.edu/wex

Avtar Singh, Contract and Specific Relief, ( Eastern book company, 13^th ed.2022)