In contract law, obligations usually arise from agreements entered into by parties. However, there are some special situations where the law itself creates obligations between parties even when there is no formal contract. These are called quasi-contracts. The concept is based on fairness, equity, and preventing one party from unjustly benefiting at the expense of another.
Understanding Quasi-Contract
A quasi-contract is not a real contract because it is not formed by mutual consent. Instead, the court imposes it to prevent unfair gain or loss. The obligation is imposed by law, not by agreement, and usually involves a right to receive money. It ensures justice is served when one person receives a benefit from another in situations where it would be unfair to keep it without paying.
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Key Features of Quasi-Contracts
Quasi-contracts have some important characteristics:
- The right that arises is always a right to money, usually a specific amount.
- There is no agreement between the parties; the obligation is imposed by law.
- The obligation is not towards everyone (unlike rights in rem), but only towards a specific person (like rights in personam), which makes it similar to actual contracts.
How Quasi-Contracts Differ from Contracts
The main difference between a contract and a quasi-contract is that a contract is based on consent, whereas a quasi-contract does not involve any consent. In a regular contract, both parties agree to certain terms. In quasi-contracts, the law imposes obligations even without any agreement, simply because one party would otherwise be unfairly enriched.
Nature of Quasi-Contractual Obligations
The idea of quasi-contracts first developed in English law, and the Indian Contract Act later included these under “certain relations resembling those created by contract.” These obligations are based on equity and good conscience, meaning the law wants to do what’s fair. A party can also file a suit for breach of a quasi-contract just like in regular contracts.
Types of Quasi-Contracts under Indian Contract Act 1872
The Indian Contract Act, 1872, recognizes five types of quasi-contractual situations:
1. Supply of Necessaries to Incapacitated Persons
If a person provides necessaries (essential goods/services) to someone who can’t legally enter into a contract (like a minor or a person of unsound mind), they can recover the cost from that person’s property. For example, if A provides food to B (a lunatic), A can claim reimbursement from B’s property—but only if the items were truly necessary.
2. Payment Made on Behalf of Another
If a person pays money which someone else was legally bound to pay, they can claim reimbursement. For example, if A pays a tax bill that B was supposed to pay in order to protect A’s own interest, A can recover the amount from B.
3. Benefit of Non-Gratuitous Act
Under Section 70, if one person lawfully does something for another, or delivers something without intending it as a gift, and the other person accepts and benefits from it, then they must either pay compensation or return the goods.
4. Finder of Goods
According to Section 71, a person who finds lost goods and takes them into custody is like a bailee. They must take care of the goods and return them to the true owner if found. They cannot keep or misuse the goods.
5. Money or Goods Received by Mistake or Under Coercion
As per Section 72, if someone receives money or goods by mistake or force, they must return it. The law allows recovery for any kind of mistake, whether legal or factual. In Shivprasad vs Sirish Chandra, the court confirmed that money paid under mistake must be returned.
Conclusion
Quasi-contracts play a crucial role in ensuring justice and fairness in situations where there’s no formal agreement but one party benefits at the expense of another. These obligations, though not traditional contracts, are enforceable by law. They help fill the gaps where normal contract law cannot reach, acting as a safeguard against unjust enrichment. For students of law, understanding quasi-contracts is important because they show how law can step in to protect fairness even without a written agreement.
