Quasi Contract

A quasi contract is a legal concept in which a court may impose a contractual obligation on a party, even in the absence of an actual contract, to prevent unjust enrichment or to prevent a party from taking advantage of another’s loss or expense. It is sometimes referred to as an implied-in-law contract or a constructive contract.

Unlike a typical contract, a quasi contract is not formed by the mutual agreement of the parties involved. Rather, it is a legal fiction that is imposed by the court to ensure fairness and equity in certain situations where there is no explicit contract.

For example, if a person provides goods or services to another person, believing that they are entering into a contract, but no actual contract exists, a court may still impose a quasi contract to ensure that the provider of the goods or services is compensated for their efforts.

Similarly, if a person mistakenly pays someone else’s debt, a court may impose a quasi contract to require the debtor to repay the person who made the payment.

Quasi Contract features

• No actual contract: A quasi-contract is not an actual contract between the parties, and therefore there is no mutual agreement between them.
• Imposed by law: A quasi-contract is imposed by law, either to prevent unjust enrichment or to prevent a party from taking advantage of another’s loss or expense.
• Based on principles of equity: A quasi-contract is based on principles of equity, and it is meant to ensure fairness and justice in certain situations where there is no actual contract.
• Unilateral: A quasi-contract is unilateral in nature, and it is imposed by the court on one party for the benefit of another party.
• Restitutionary: A quasi-contract is restitutionary in nature, and it requires the party benefiting from the quasi-contract to make restitution to the other party.
• Specific circumstances: A quasi-contract arises in specific circumstances, such as where one party mistakenly provides goods or services to another party, or where one party mistakenly pays another party’s debt.
• No intention to create legal relations: A quasi-contract is different from a regular contract in that there is no intention to create legal relations between the parties.

Legal Provisions

The Indian Contract Act, 1872 does not explicitly mention the term “quasi-contract.” However, Section 68 to 72 of the Act provides the legal provisions that deal with the concept of a quasi-contract. These provisions deal with the obligation to repay the money that has been received by mistake or under coercion or fraud. The following are the legal provisions related to quasi-contracts under the Indian Contract Act, 1872:

Section 68: Claim for necessaries supplied to a person incapable of contracting, or to whom such goods are necessary:

This section allows a person who has supplied necessaries (essential goods or services) to someone who is incapable of contracting, such as a minor, to recover the reasonable cost of such goods or services from the property of the minor or the person who is responsible for the minor.

Section 69: Reimbursement of a person paying money due by another, in payment of which he is interested:

This section states that if a person pays another person’s debt or obligation, which the former is interested in, the former can recover the amount from the latter.

Section 70: Obligation to repay money received under a mistaken contract:

This section deals with the repayment of money that has been paid under a mistake of fact or law. It provides that a person who has received money by mistake or under coercion or fraud is bound to repay it.

Section 71: Responsibility of a person receiving the benefit of a non-gratuitous act:

This section deals with the responsibility of a person who receives the benefit of a non-gratuitous act (i.e., an act that is not done as a gift or charity). It provides that a person who receives such a benefit is bound to compensate the person who has performed the act.

Section 72: Liability of a person to whom money is paid, or thing delivered, by mistake or under coercion:

This section provides that a person who has received money or any other thing by mistake or under coercion is bound to repay it to the person who made the payment or delivered the thing.