Quasi-contracts are legal constructs that impose obligations on parties without a formal agreement, aiming to prevent unjust enrichment and ensure fairness. In Indian law, Sections 68 to 72 of the Indian Contract Act, 1872, codify these obligations.

MEANING AND DEFINITION

The term “quasi” means “as if” or “almost,” indicating that quasi-contracts resemble contracts but lack mutual consent. They are not actual contracts but are treated as such by courts to prevent one party from benefiting at the expense of another. According to the Indian Contract Act, 1872, a contract is defined as “an agreement enforceable by law.” However, quasi-contracts are not explicitly defined in the Act; instead, Sections 68 to 72 outline situations where such obligations arise.

HISTORICAL BACKGROUND

The concept of quasi-contracts originates from Roman law’s “obligationes quasi ex contractu,” which addressed obligations resembling those arising from contracts. In English common law, the case of Moses v. MacFarlane (1760) established that obligations could arise to prevent unjust enrichment, even without a formal agreement. Lord Mansfield stated that the defendant is obliged by “ties of natural justice and equity to refund the money.”

ESSENTIALS OF QUASI-CONTRACTS

For a quasi-contractual obligation to arise, the following elements are essential:

• Absence of Formal Contract: There is no formal agreement between the parties.
• Unjust Enrichment: One party is enriched at the expense of another.
• Legal Obligation: The law imposes an obligation on the enriched party to compensate the other.

These elements ensure that no individual benefits unfairly at another’s expense.

LEGAL PROVISIONS UNDER THE INDIAN CONTRACT ACT, 1872

Sections 68 to 72 of the Act detail specific situations where quasi-contractual obligations arise:

1. SECTION 68: SUPPLY OF NECESSARIES TO INCAPABLE PERSONS
   If a person incapable of contracting (e.g., a minor or someone of unsound mind) is supplied with necessaries suited to their condition in life, the supplier is entitled to reimbursement from the property of the incapable person.

   Illustration: A supplies B, a minor, with essential goods. A can claim reimbursement from B’s estate.

2. SECTION 69: PAYMENT BY INTERESTED PERSON
   A person who pays money on behalf of another, which the latter is legally bound to pay, is entitled to be reimbursed by the other.

   Illustration: A, a tenant, pays property tax on behalf of B, the landlord, to prevent property seizure. A is entitled to reimbursement from B.

3. SECTION 70: OBLIGATION OF PERSON ENJOYING BENEFIT OF NON-GRATUITOUS ACT
   When a person lawfully does something for another or delivers something without intending to do so gratuitously, and the other person enjoys the benefit, the latter is bound to compensate or restore the thing done or delivered.

   Illustration: A, a tradesman, leaves goods at B’s house by mistake. B uses the goods. B is liable to pay A for them.

4. SECTION 71: RESPONSIBILITY OF FINDER OF GOODS
   A person who finds goods belonging to another and takes them into their custody is subject to the same responsibility as a bailee.

   Illustration: A finds B’s lost watch and takes it. A must take care of the watch and, if B is found, return it.

5. SECTION 72: LIABILITY OF PERSON TO WHOM MONEY IS PAID OR THING DELIVERED BY MISTAKE OR UNDER COERCION
   A person to whom money has been paid or anything delivered by mistake or under coercion must repay or return it.

   Illustration: A pays B ₹1,000 by mistake. B is obliged to return the money to A.

PRINCIPLES AND DOCTRINES

The primary principle underlying quasi-contracts is the doctrine of unjust enrichment, encapsulated in the maxim “Nemo debet locupletari ex aliena jactura,” meaning “No one ought to be enriched at another’s expense.” This ensures that individuals do not unfairly benefit from others without compensation.

CASE LAWS

1. Moses v. MacFarlane (1760)

   • Facts: The plaintiff paid money to the defendant under a mistaken belief that he was legally obliged to do so.
   • Issue: Whether the plaintiff could recover the money paid by mistake.
   • Held: The court held that the defendant was obliged to return the money, establishing the principle that no one should unjustly benefit at another’s expense.

2. Mohd. Ishaq vs. State of Jammu and Kashmir (2014)

   • Facts: The plaintiff supplied goods to a government department without a formal contract.
   • Issue: Whether the plaintiff could claim payment for the goods supplied.
   • Held: The Supreme Court held that even in the absence of a formal contract, the plaintiff was entitled to payment under quasi-contractual obligations, emphasizing the principle of preventing unjust enrichment.

3. Kailash Nath Associates vs. DDA (2015)

   • Facts: The plaintiff performed work for the defendant without a formal agreement.
   • Issue: Whether the plaintiff could claim compensation for the work done.
   • Held: The Delhi High Court ruled that the plaintiff was entitled to fair and reasonable compensation under quasi-contractual principles, as the defendant had benefited from the plaintiff’s work.

COMPARISON WITH CONTRACTS

While traditional contracts are formed through mutual consent, offer, and acceptance, quasi-contracts are imposed by law to ensure justice and prevent unfair advantage.