Quasi contracts are not real contracts formed by mutual consent, but obligations imposed by law to prevent unjust enrichment of one party at the expense of another. These are based on the principles of equity, justice, and good conscience.
Under the Indian Contract Act, Sections 68 to 72 deal with such obligations.
Features of Quasi Contracts
- No offer and acceptance involved
- Imposed by law, not formed by agreement
- One party is bound to compensate the other
- Aim: To prevent unjust enrichment
Types of Quasi Contracts under the Indian Contract Act
Section 68 – Necessaries Supplied to Incompetent Persons
If a person supplies necessaries suited to the condition in life of a person incapable of contracting (e.g. minor, lunatic), they are entitled to be reimbursed from the property of such person.
Example: A supplies food and medicine to a minor. A can recover the cost from the minor’s property.
Section 69 – Payment by Interested Person
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.
Example: A pays B’s property tax to prevent its auction. A can recover it from B.
Section 70 – Obligation of Person Enjoying Benefit of Non-Gratuitous Act
When a person lawfully does something for another, not intending it as a gift, and the other person enjoys the benefit, the latter is bound to compensate.
Example: A mistakenly delivers goods to B. B uses the goods. B must pay for them.
Section 71 – Responsibility of Finder of Goods
A person who finds goods belonging to another must take care of them and return them. They have the same responsibility as a bailee.
Example: A finds B’s wallet and keeps it safe with the intent to return it. A must take reasonable care of it.
Section 72 – Money Paid or Goods Delivered by Mistake or Under Coercion
A person to whom money has been paid or goods delivered by mistake or coercion must repay or return them.
Example: A bank credits B’s account by mistake. B must return the excess amount.
Distinction between Quasi Contracts and Regular Contracts
| Aspect | Regular Contract | Quasi Contract |
|---|---|---|
| Formation | By mutual consent | By law |
| Essentials like offer | Required | Not required |
| Legal obligation | Based on agreement | Based on prevention of unjust enrichment |
| Example | Sale of goods | Goods mistakenly delivered used by other |
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Important Case Law
State of West Bengal v. B.K. Mondal & Sons (1962)
The Supreme Court held that a person who enjoys the benefit of a non-gratuitous act must pay for it. The government was held liable to pay for construction work it allowed to be done and later used.
