What are Quasi-Contracts?

 · 5 mins read

The term 'quasi' means 'pseudo.' As a result, a Quasi-contract may also be a pseudo-contract. A substantial contract is often discussed to include elements such as offer and acceptance, the ability to contract, and free will. There are, however, other types of contracts. When the fundamental elements of a contract do not appear, the law infers a guarantee and forces commitments on one party while conferring rights on the other. These guarantees are not legal contracts, but the Court recognises them as contractual relationships and upholds them as such. These promises/relationships are referred to as quasi-contracts.

Features of a Quasi Contract

  • It is frequently than not a right to the money and is for the majority, not continuously, to a liquidated sum of money.

  • The right is not a consequence of an assertion but enforced by law.

  • The right is not available to everybody in the world but as it were in contradiction of a particular person(s).

  • Thus, it takes after a contractual right.

Nature of Quasi Contractual Relationships

The English law was the first to identify quasi-contractual obligations, which Indian law modified and included in the Indian Contract Act as "certain relations resembling those created by contracts." As a result, the elements found in English quasi-contracts and the Indian Contract Act are similar.

Payments for the use of the defendant

Payment should have been made under duress rather than voluntarily in such a case. The defendant was obligated to pay, and the plaintiff's payment relieved him of that obligation.

Payments made voluntarily.

Payments made when a person is mistaken about a fact can be recovered, but only if the person paying would have been obligated to pay if the mistake of fact had been true.

Meriut Quantum

There are certain circumstances in which a party performs his contractual duty, and the other party renders further performance null and void. In such cases, the party who fulfilled its contractual obligations may seek reasonable compensation from the other party.

Quasi Contracts under Indian law

Sections 68 to 72 of the Indian Contract Act, 1872 deal with the following five types of quasi-contracts: –

Claim for requirements given to a person inept to contract on his account (Section 68): –

  • If a person is unable to enter into a contract and is supplied with the necessities of life, the person who supplies has the right to be reimbursed from the incapable person's property.

  • Illustration: A provides all of the necessary items for his current situation, whereas B is a lunatic. In this case, A is entitled to reimbursement from B's property.

Reimbursement of a person who pays money owed by another in which he has an interest (Section 69): –

A person who is both interested in and pays money that another person is required by law to pay.

Illustration: 'B' has a lease on land in Bengal from zamindar 'A.' The government advertises for sale the revenue owed to the government by A, his land. According to the tax code, such a sale would result in the cancellation of B's lease. B stops the sale, and the subsequent declaration of his lease pays the government the amount owed to A. In this case, B can be reimbursed from A's property.

The obligation of a person who benefits from a non-gratuitous act (Section 70): –

When one person lawfully does something to another or gives something to him for free, the latter is obligated to compensate the former for the act done.

However, the plaintiff must demonstrate that what was done or given was legal. He did not suggest it gratefully. Someone else took advantage of the situation.

The responsibility of the finder of goods (Section 71) is as follows: –

If a person discovers the goods of another and takes them into his custody, he is subject to the responsibility of a bailee.

The following responsibilities must be met:

  • Take good care of your belongings as a prudent person would.

  • There is no right to appropriate the goods.

  • Return the items to their rightful owner (if found)

Liability of the individual to whom money is paid or goods are delivered mistakenly or coercion (Section 72): –

  • A person who has been paid money or given something by mistake or coercion must repay or return it.

  • Illustration: A and B owe C 100 rupees jointly; A pays C alone; and B, unaware of this fact, pays C 100 rupees again. C is obligated to repay B the amount.

Conclusion

The obligations imposed by quasi-contracts differ significantly from those imposed by real contracts. Section 73 of the Indian Contract Act provides remedies for breach of quasi-contracts in the same way that various sections of the act provide remedies for breach of express contracts. It states that the remedy for breach of express contracts is that any person who is injured is entitled to the compensation same as the compensation from the party in default as if such person had contracted to discharge it and had broken his contract.

The parties have not expressly agreed to any terms and conditions. Based on equity, natural justice, and good conscience, the law imposes such obligations on the parties who receive the undue benefit to compensate the other parties. The doctrine of quasi-contracts is a critical component of the Indian Contract Act of 1872, which provides relief to parties who have suffered losses while someone else has benefited.