QUASI-CONTRACT

BY- PAWEL GAUTAM

INDIAN CONTRACT ACT, 1872

Quasi contact is a binding obligation that is imposed by the courts to avoid injustice or unjust enrichment

Introduction

An implied-in-law contract imposed by the courts to prevent injustice

A special form of contract that lacks mutual assent of the parties but which imposed on the parties by the courts to avoid injustice

A situation in which there is an obligation as if there was a contract although the technical requirements of a contract have not been fulfilled. It is also called as implied-in-law contract

Alternative ways of describing a quasi contract are

A party has been enriched by some benefit

The enrichment is at the expense of other.

The retention of the enrichment is unjust.

The principle of unjust enrichment requires

1. Supply of necessaries to person Incapable of contracting. (sec. 68) 2. Payment by interested person.(sec. 69) 3. Obligation to pay for non-gratuitous acts (sec. 70) 4. Responsibility of finder of goods (sec. 71) 5. When money is paid or things delivered by mistake or under coercion (sec. 72)

Kinds of Quasi- Contract

Any person supplying necessaries of life to person who are incompetent to enter into contract is entitled to claim the price from the other person’s property.

Similarly where money is paid to such person for the purchase of necessaries , reimbursement can be claimed

SECTION- 68 Supply of necessaries to person incapable of contracting .

The following points must be considered-(i) The things supplied must come within the

category of necessaries. (ii) Necessaries should be supplied only to such

person to whom he is legally bound to support e.g. wife, children

(iii) He is liable to pay only a reasonable price, not the price which he has agreed to pay

In the case of Jai Indra Bahadur Singh v. Dilraj Kaur, a minor being bound to support his sister, money advanced to a minor for marriage of his sister has been held to be necessaries under this section and also recoverable from the property.

“A person who is interested in the payment of money which another is bound by law to pay, is entitled to be reimbursed by the other.”

Section-69 Right to recover money paid for another person

In this case B purchases A`s agricultural land. On that land cess is in arrears for a longer period which are actually to be cleared by A, But B pays that amount. Here Court creates a quasi contract between them under.

Section 69 and thus capacitates B to recover that amount from A.

A case on this point is Hazarilal Vs Navaranglal

The conditions of liability under this section are:Plaintiff should be interested in

making payment to protect his interest. The interest should be legally recognizable.

It is necessary that the plaintiff himself should not be bound to pay.

The defendant should have been ‘bound by law’ to pay the money.

The plaintiff should have made the payment to another person.

When one party Conducts an activity and its benefit is attained by another party, then also Court can create a quasi Contract.

Section – 70 Obligation to pay for non-gratuitous acts

In this case A is resident of a Village. The local government conducts repairs to the tank situated at A`s village. As a result A gets benefited because the surrounding lands belong to A. Here Court creates a Quasi Contract and decides that A has to bear cost of repairs

A Case on this point is DamodarModaliar Vs Secretary of State for India

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

Thus in respect of duties and liabilities, a finder is treated at par with bailee. The finder’s position is therefore considered along with bailment.

Section – 71 In case of finder of lost goods

In this case B finds a diamond at A`s shop and hands it over to A, requesting A to send the diamond to true owner. True owner is not found. When true owner is not found. Finder gets the title. No one can claim share in it. Here court creates a bailment contract between B and A and thus capacitates B to get diamond back.

Related case is Hallius Vs Fowler

He can sue the owner for the specific reward announced for the return of goods and recover the reward.

He is entitled to recover his lawful charges incurred in preserving the goods and in order to find the true owner.

He can sell the goods ifThe goods are perishable in nature His lawful charges exceed two third of the

value of goods.When after due search, the true owner can

not be found.

 The rights of a finder of goods include the following:

A person to whom money has been paid or anything delivered by mistake or under coercion must repay or return it.

Section – 72 When money is paid or things delivered by mistake or under coercion

In this case Mr. A pays Sales tax by mistake though he is need to pay. Here Court creates a quasi Contract and capacitates A to recover that amount

Khaniyalal Vs Sales Tax Officer of the Banaras