Topic: Discuss the contribution of the Supreme Court of India on

`Quasi Contracts'.
Is the Indian Contract Act 1872, on the subject exhaustive?

Under the guidance of: Prof. Devesh Joshi.

Submitted by: -

Name: Priyanka Dilip Chavan

Class: F.Y.L.L.B

Semester: 1st Semester

Roll No: 213014

DOS: 28th March 2022

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 Index
Sr Page
Topic
No No
1 Introduction & Background 3
2 What is Contract? 4-5
3 Evolution of Quasi Contract 6
4 Meaning & Definition 6
5 The Principle of Unjust Enrichment 7
6 Features of a Quasi-Contract 8
7 Certain relations resembling those created by contract 9
Section 68: Claim for necessaries supplied to person incapable of contracting, or on his
8 10-11
account
Section 69: Reimbursement of person paying money due by another, in payment of which he
9 12-13
is interested
10 Section 70: Obligation of person enjoying benefit of non-gratuitous act 13-14
11 Section 71: Responsibility of finder of Lost Goods: 14-15
Section 72: Liability of person to whom money is paid or thing delivered by mistake or
12 15-16
under coercion
13 The contribution of the Supreme Court of India on `Quasi Contracts'. 17-18
14 Conclusion 19
15 Is the Indian Contract Act 1872, on the subject exhaustive? 20-21
16 Bibliography & Webliography 22

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Introduction

If, while riding on a train, a shoe shiner comes, and without us saying anything, starts to polish
our shoes and when they’re done, they ask for some money. Are we obliged to pay them that
amount? Or can we tell them “I did not ask you to polish my shoe anyway!”.

Imagine another situation, where someone else’s Amazon package, with its payment already
done, is left at your door. Do you become all excited and say “YAY! Free Gifts!” or do you
make an effort to find the owner or return the package?

There are certain obligations, specified in the Indian Contract Act, that are not actually
contracts because they miss one or the other elements of a contract, but are still enforceable in
a court of law. Such obligations are called Quasi-contractual obligations. Each of them has
been talked about separately in Sections 68 to 72 (Chapter V) of the Indian Contract Act, 1872.

Background

It is first important to note that a contract before it becomes so, is an agreement. Therefore,
where there is no agreement, there is no contract. Yet, there are some obligations that do not
have their origin in an agreement. The obligation not to harm another person or his property
(Torts), for instance, the judgments or orders of courts, quasi-contractual obligations, etc. These
obligations are not ‘contracts’ by definition, but they are enforceable in a court of law.

Now questions arises like Why you need a contract? You want to sign a contract?! Why on
earth do we need to sign a contract? Can’t we just do this on a handshake? Can’t I trust you?
Well before this question get answered we should know What is contract?

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What is Contract?

Contracts According to The Indian Contract Act, 1872 Sec 2(h) “an agreement enforceable by
law is a contract”. In other words, an agreement between two or more parties creating
obligations that is enforceable or otherwise recognizable at law. Contracts are promises that
the law will enforce. The law provides remedies if a promise is breached or recognizes the
performance of a promise as a duty. Contracts arise when a duty does or may come into
existence, because of a promise made by one of the parties. To be legally binding as a contract,
a promise must be exchanged for adequate consideration. Adequate consideration is a benefit
or detriment which a party receives which reasonably and fairly induces them to make the
promise/contract. For example, promises that are purely gifts are not considered enforceable
because the personal satisfaction the grantor of the promise may receive from the act of giving
is normally not considered adequate consideration. Certain promises that are not considered
contracts may, in limited circumstances, be enforced if one party has relied to his detriment on
the assurances of the other party. A contract means an agreement which is enforceable by law.
An agreement consists of reciprocal promises between the two parties. In case of contract, both
the parties are legally bound by the promise made by him. A contract to perform a promise
could arise in these ways: by agreement and contract, standard form contracts, and promissory
estoppel.

Following reasons why two parties in an agreement should be in contract:

1. Contracts provide a description of responsibilities: Rather than suffer through the

confusion of wondering what each party’s responsibilities are, you’re better to have
everything in writing. This will help avoid confusion or disagreement.
2. Contracts bind parties to their duties. It is incredibly disruptive if one party attempts
to back out of an agreement. A contract will bind the parties to the previously defined
description of duties eliminating this problem.
3. Contracts can establish a time frame for duties. If you need work performed and
performed within a certain time frame a contract binds the party to that time frame. As
a consultant, you might want to require the other party to provide adequate and timely
access to key personnel, for example.

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4. Contracts can secure payment. No one likes to be stiffed for work performed and a
binding contract provides a written legal document establishing an agreement to be paid
for services rendered.
5. Contracts provide recourse when the relationship falters. If the relationship
between the contracted parties deteriorates, a contract outlines the previously agreed
upon steps required for dissolving the relationship without punitive measures.

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Evolution of Quasi Contract:

The history of quasi contract can be followed back to the Middle Ages, under a practice that
was referred to back then as indebitatus assumpsit.[5] In that period, the law dictated that a
plaintiff would receive a sum of money from the defendant, in an amount dictated by the courts,
as if the defendant had always agreed to pay the plaintiff for his goods or services.

Indebitatus assumpsit was a method used by the courts to make one party pay another as if a
contract had been created between the two parties. The defendant's agreement to be bound by
a contract that required compensation was implied by the law. The early days in the history of
quasi contract saw such contracts being used to enforce obligations related to restitution.1

Meaning & Definition:

The word „Quasi‟ means pseudo. Hence, a Quasi contract is a pseudo-contract. When we talk
about a valid contract, we expect it to have certain elements like offer and acceptance,
consideration, the capacity to contract, and free will. But there are other types of contracts as
well.

The Term “Quasi” is Latin Word, which means “as if” or “Similarly”. It means seemingly,
apparently, but not really. The expression ‘quasi contract’ is derived from the Roman Law “
Obligation quasi ex contractu”. Quasi contract is not a real contract, in which law imposes an
obligation on a person to perform an obligation on the ground of equity.2

Definition: Dr. Jenks defined “ Quasi Contract”, as a situation, in which law imposes on one
person on the ground of natural justice, an obligation similar to that, which arises from a true
contract although no contract, express or implies has in fact been entered into by them.

1. Referred from: https://www.legalserviceindia.com/legal/article-4072-

quasicontracts.html#:~:text=Quasi%20contract%20are%20based%20on,but%20the%20law%20impose%20cont
ract

2 Dr. Rega Surya Rao – Law of Contract, p.g. no 155

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Salmond defines Quasi Contract as “There are certain obligations which are not in truth
contractual in the sense of resting on agreement, but which the law treats as if they were.”

Lord Mansfield explained such obligations on the principle that law as well as justice should
try to prevent ‘Unjust Enrichment’, that is enrichment of one person at the cost of another.3

The Principle of Unjust Enrichment

Quasi-contracts are based on the principle of “Nemo debet locupletari ex aliena

jactura”, which means ‘No man should grow rich out of another person’s loss’. Therefore,
liability in the case of quasi-contractual obligations is based on the principle of ‘unjust
enrichment’. It essentially means that no man should get unjustly enriched at the cost of another
person’s loss. That means no person should gain anything unjustly, when his gaining such a
thing may mean a loss for another person.

Sometimes, Law, in the absence of a contract, but on the principle of equity, imposes on
obligation on a person. Such obligation is called “Quasi contractual obligation” it is similar to
a real contract entered into between the parties4.

3. Dr. Rega Surya Rao – Law of Contract, p.g. no 156

4. Referred from : https://blog.ipleaders.in/quasi-contractual-obligations/

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Features of a Quasi-Contract

 Their origin does not lie in the offer and its acceptance, that is, in an agreement
between the parties.

 They are rather based on justice, equity, and a good conscience and on the principles
of natural justice.

Distinctive Features:

Anson, in the Law of Contract (23rd Edn. P.11) stated that ‘quasi contract is not a happy term’
and pointed out the following distinctive features of the quasi contract:

i. Right to a sum money

ii. Imposed by Law and does not arise by agreement of parties
iii. Right available only against a particular person or persons.

i) Right to a sum of money: “such a right is always a right to money, and generally,
though not always to a liquidated sum of money.”
ii) Imposed by Law and does not arise by agreement of parties: “It does not arise
from any agreement of the parties connected, but is imposed by the law, so that in
this respect to a quasi -contract resembles a tort”.
iii) Right available only against a particular person or persons: “It is a right which
is available not, like the rights protected by the law of torts, against all the world,
but against a particular person, persons only, so that om this respect, it resembles a
5
contractual right.”

5. Dr. Rega Surya Rao – Law of Contract, p.g. no 156

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The Indian Contract Act, 1872: According to Chap.V(Sec.68-72) of the Indian Contract
1872 deals with “certain relations resembling those created by contract”. It incorporates
those obligations which are known as “Quasi Contract” under English law. In various situations
mentioned in the chap., a person is obliged to compensate another although the basis of this
obligation is neither a contract between the parties, nor any tort on the part of person who is
bound to compensate. The basis of the obligation is that no one should have unjust benefit at
the cost of the other

Requirements:

Certain aspects must be in place for a judge to issue a quasi-contract. One party – the plaintiff
– must have given a tangible item or a service to another party – the defendant – with an
expectation/implication that payment would be given. The defendant must have accepted or
acknowledged receipt of the valuable thing but did not make any effort or offer to pay. Then,
the plaintiff must express why it would be unjust for the defendant to receive the thing of value
without paying for it, so the defendant received unjust enrichment.

A quasi contract, also known as an implied contract, would be handed down, requiring
the defendant to pay restitution to the plaintiff. The restitution – known as quantum meruit – is
calculated by the amount or the extent to which the defendant was unjustly enriched.

An action for quasi-contract resembles a contractual action in so far as such an action

is against a certain person or certain persons, who have got the unjust benefit. Such an action,
it may be further noted, is for a liquidated sum of money.

The Indian Contract Act deals with the following quasi-contractual obligations:
1. Claim for necessaries supplied to a person incompetent to contract (Sec.68).
2. Reimbursement of money paid, due by another (Sec.69).
3. Obligations of person enjoying benefit of non-gratuitous act(Sec.70).
4. Responsibility of finder of goods (Sec.71)
5. Liability of a person getting benefit under mistake or coercion (Sec72)

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Section 68: Claim for necessaries supplied to person incapable of contracting, or on his
account. -

If a person, incapable of entering into a contract, or any one whom he is legally bound to
support, is supplied by another person with necessaries suited to his condition in life, the
person who has furnished such supplies is entitled to be reimbursed from the property of such
incapable person.

Illustrations

(a) A supplies B, a lunatic, with necessaries suitable to his condition in life. A is entitled to be
reimbursed from B’s property.

(b) A supplies the wife and children of B, a lunatic, with necessaries suitable to their condition
in life. A is entitled to be reimbursed from B’s property.

Generally, a minor is not liable under the contract on the ground that he can be promise but not
a promiser. However, a minor is held liable for necessaries supplied to him or to his dependants,
on the principle of natural justice. In such a case, minor’s obligation to pay for necessaries is
is quasi contractual obligation.

Thus, a minor is liable for the price of necessaries supplied to him and his dependants viz.
father, mother, brother, sister etc. However, the liability is restricted only to his property and
he has no personal liability. In other words, a minor is not liable even for necessaries supplied
to him, if has no property at all. But in English Law, he is personally liable for necessaries
supplied, if he has no property. Now, the question is what is necessaries?

Necessaries: There is no definition for the term ‘necessaries.’ “Things necessary are those
without which an individual cannot reasonably exist”. The word ‘Necessaries’ has been used
here in technical sense. Generally, it means “goods and services, which are most, essential for
the survival of human life”. It includes food, clothing, shelter, education, medical and legal aid,
etc. expenses for minor’s education, his sister’s marriage, expenses incurred in funeral of
minor’s parents, expenses incurred for necessary litigation, etc. have generally been held as
necessaries. Expenses for minor’s marriage have also been held as necessaries. Expenses for
minor’s marriage have also been held to be ‘necessaries’. It also varies from person to person
subject to his social status and family background. What is luxury to one person, may be a
necessity to another.

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 Essential Elements:

To constitute sec 68. the following essential elements are to be satisfied:

i. If a person supplied necessaries to person who is incapale of contracting or to any one

whom he is legally bound to support.
ii. The necessaries must be suited to his condition in life;
iii. The person supplying the necessaries is entitled to be reimbursed; but
iv. The liability of such person incapable of contracting is limited to his property or in other
words he incurs no personal liability for the obvious reason that he is incompetent to
contract.

Relevant case law:

 Kunwarlal v. Suraj mal, AIR 1963, MP 58 :
In this case, the house given to a minor or rent for living and studies was held to be the supply
of necessaries and was recoverable.

 Nash v. Imman, (1908) 2 K.B.I

In this case, the defendant was a minor. He was already having sufficient supply of clothing
suitable to his position. He was supplied further clothing by the plaintiff, a tailor. In an action
by the plaintiff for the price, it was held that the price of the clothes so supplied could not be
recovered.

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

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 by the other. —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 by the other."

Illustration
B holds land in Bengal, on a lease granted by A, the zamindar. The revenue payable by A to
the Government being in arrear, his land is advertised for sale by the Government. Under the
revenue law, the consequence of such sale will be the annulment of B’s lease. B to prevent
the sale and the consequent annulment of his own lease, pays the Government the sum due
from A. A is bound to make good to B the amount so paid. B holds land in Bengal, on a lease
granted by A, the zamindar. The revenue payable by A to the Government being in arrear, his
land is advertised for sale by the Government. Under the revenue law, the consequence of
such sale will be the annulment of B’s lease. B to prevent the sale and the consequent
annulment of his own lease, pays the Government the sum due from A. A is bound to make
good to B the amount so paid."

For the application of this Sec., the following two essentials are to be there:

i. One person is interested in the payment of money, and therefore, he pays it, while
(refer Brook’s Wharf v. Goodman Brothers)
ii. Another person is bound by law to pay the same, but he fails to pay.(refer Port Trust,
Madras v. Bombay Company, AIR 1967) The person so making the payment is
entitled to be reimbursed by the person, who was bound to pay.

Relevant case law:

Brook’s Wharf v. Godman Brothers, (1937) 1 K.B.534 :
The plaintiffs in the instants case were warehousemen. The defendants warehoused their goods
imported from Russia with the plaintiffs. Under the law, customs duty on the goods was to be
paid by the owners of the goods or or by the warehousemen. The plaintiff paid the customs
duty, which the defendants are bound to pay. In an action against the defendants, it was held
that the plaintiffs were entitled to recover the amount.

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Govindram v. State of Gondal, 1950(77) IA 156 AIR 1950 PC 99

In this case the defendant agreed to sell a Mill to A who agreed to sell the Mill to plaintiff. The
defendant as owner was bound to pay the Municipal taxes due on the mill and so the second
plaintiff paid to avoid litigation with the Municipality. Plaintiff 2 sued the defendant for
recovery of this amount under sec 69.

Section 70: Obligation of person enjoying benefit of non-gratuitous act. —

Where a person lawfully does anything for another person, or delivers anything to him, not
intending to do so gratuitously, and such other person enjoys the benefit thereof, the latter is
bound to make compensation to the former in respect of, or to restore, the thing so done or
delivered.1 —Where a person lawfully does anything for another person, or delivers anything
to him, not intending to do so gratuitously, and such other person enjoys the benefit thereof,
the later is bound to make compensation to the former in respect of, or to restore, the thing so
done or delivered.

Illustration:

a) A, a tradesman leaves goods at B’s house by mistake. B treats the goods as his own.
He is bound to pay A for them.
b) A saves B’s property from fire. A is not entitled to compensation from B, if the
circumstances show that he intended to act gratuitously.

Section 70 corresponds to what in England are called actions for Quantum Meruit (as much
as he deserves). Though there is no contract as such or the contract is invalid, when a person
has enjoyed a benefit as a result of what another has done, he should compensate for such
benefit. If that other had intended to act gratuitously i.e acted without any intention to create
an obligation he cannot claim compensation.

Relevant Case Law:

Damodara Mudaliar V. Secretary of State for IndiaL ILR (1895) 18 Mad.88:

The plaintiff in the instant case was the Government and the Zamindars were the
defendants. The plaintiffs(Govt) had undertaken the repair of a tank, which irrigated the
lands belonging to the plaintiff and also the defendants. The plaintiffs did not carry out the
repairs gratuitously. The defendants had the knowledge of the repairs and the consequential

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benefit enjoyed by them. In an action against the defendants, it was held that the
plaintiffs(Govt) were entitled to recover the proportionate cost of the parties.

Municipal Committee, Pundri V Bajrang Rao Nagrath, AIR 2006 P & H 142:

In this case, a contractor not intending to act gratuitously carried out work on the work on
the oral request of the Municipal Councilor under the administrative approval of the Deputy
Commissioner, the Municipal Committee being the beneficiary of the work, cannot disown
payment and the plaintiff is entitled to recover his dues for the work done by him.

Section 71: Responsibility of finder of Lost Goods:

When a person finds some goods belonging to another, he is called ‘finder of lost goods. He
has a quasi-contractual obligation to return them to the true owner. He is subject to the same
responsibility as bailee.
Section 71 deals with responsibility of finder of goods. A person who finds goods belonging
to another, and takes them into his custody, is subject to the same responsibility as a bailee.
The responsibility or duties of bailee (Finder of Lost goods) as provided under the different
sections of the Contract Act, are as follows:
i. Duty to take reasonable care of goods (sec 151)
ii. Duty to return goods (Sec160)
iii. To make proper use of the goods bailed (Sec 153 & 154)
iv. Duty not to mix his own goods with the good of the bailor (Sec 155, 156 & 157)
v. Duty not to question the title of bailor and
vi. Duty of bailee to pay increase or profit from goods bailed (Sec 163)
Finders Right to Sell: Under section 169, the finder of the goods has the power to sell
them when-
The owner of the goods cannot with reasonable diligence be found, or if he refuses,
upon demand, to pay the lawful charges of the finder, &
Either the thing found is in danger of perishing or of losing the greater part of its value,
in case the goods are not of perishable nature, but the lawful charges of the finder, in
respect of the thing found, amount to two -thirds of its value.

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 Finder’s Right of Lien and Compensation:
The finder of the goods has no right to sue the owner for compensation for the trouble
and expense voluntarily incurred by him to preserve the goods and to find out the
owner; but he may retain the goods against the owner until he receives such
compensation; and where the owner has offered a specific award for the return of goods
lost, the finder may sue for such reward, and may retain the goods until he receives it.

Finder is Bailee only against the True Owner:

It may be noted that the position of the finder of goods is that of a bailee only against
the true owner of the goods, and he is bound to return the goods to the owner as owner’s
title is better than his.
The finder of lost goods has to make necessary efforts to find out the real owner. He
can dispose of the goods under the following cases:
i. If the goods are of perishable nature.
ii. He can sell them and pay the amount to the real owner after deducting the lawful
charges.
iii. If the real owner refused to pay the lawful charges and expense incurred for the
storage etc. the finder can detain them, since he exercise particular lien over
them.

Finally, its to be noted that section 71 of the Indian Contract Act 1872 imposes civil
liability on the finder of goods. Similarly, section 403 of the Indian Penal Code, 1860
imposes criminal liability for dishonest misappropriation of property.

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

As the heading suggests, if something is delivered to a person by ‘mistake’ or under ‘coercion’,

he is liable to pay it back. For instance, Aristotle and Dante share a flat and contribute in half
for the rent to be paid. Aristotle, without knowing that Dante has already paid the due rent to
the landlord in whole, pays again to the landlord. The landlord, in this case, is liable to give
back the money delivered to him by mistake. The term mistake here can mean both mistake of
fact or mistake of law.

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The section also uses the term ‘coercion’. Here is an example of something delivered under
coercion- A railway company refuses to deliver goods to a certain consignee except upon the
payment of a certain illegal sum of money. The consignee pays the sum to obtain his goods.
The company is liable to return the sum of money illegally charged.

Relevant Case Law:

Kanhaiya Lal V. Sales Tax Officer, Banaras; : -

In this case, the plaintiff paid Sales Tax to the Government for forwarding the transaction.
Later, the High Court declared such tax as invalid. In an action by the plaintiff, the Court held
that the plaintiff was entitled to get back the amount.

Indian Bank V. Mocro Electronics AIR 2005 AP 328.

In this case the staff of plaintiff bank wrongfully credited the money into the account of the
defendant and the defendant withdrawn that money on different dates without informing the
bank, the defendant is under liability to refund the money together with interest at the rate of
6% from the date of instituting the suit.

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The contribution of the Supreme Court of India on `Quasi Contracts'.
For understanding the contribution of Supreme Court of India on Quasi Contracts, we will refer
below mentioned case laws on the same:

Lothamasu Sambasiva Rao vs Thadwarthi Balakotiah on 14 November, 1972:

Mr. M. Jagannadha Rao also placed reliance on a passage in Anson's Law of Contract (
Twenty-third Edition ) at page 601 : " Where one person pays money to another in pursuance
of an agreement which is ineffective, or which subsequently becomes so, he may recover from
that other the money which he has paid ". Putting the case under the head of quasi-contractual
liability, the nature of a quasi-contract is stated in Chapter XXI of Anson's Law of Contract, at
page 589 in these words : " Circumstances must occur under any system of law in which
it becomes necessary to hold one person to be accountable to another, without any
agreement on the part of the former to be so accountable on the ground that otherwise
he would be retaining money or some other benefit which has come into his hands to
which the law regards the other person as better entitled, or on the ground that without
such accountability the other would unjustly suffer loss. The law of quasi-contract exists
to prove remedies in circumstances of this kind. " The three common law actions of a quasi-
contractual nature as we get from page 590 of the same Volume are: (1) for money paid by the
plaintiff to the defendant's use ; (2) for money had and received by the defendant to the
plaintiff's use and (3) quantum meruit. It is under the first two heads that Mr. Jagannadha Rao
sought to put his case as, according to him. Section 70 incorporates what is a quasi-contract in
the English Common Law. 6

Mulamchand vs State Of Madhya Pradesh on 20 February, 1968:

A person for whom something is done or to whom something is delivered must enjoy the
benefit thereof. If these conditions are satisfied, s. 70 imposes upon the latter person the
liability to make con sensation to the former in respect of, or to restore, the thing done or
delivered. The important point to notice is that in a case falling under s. 70 the person doing
something for another delivering something to another cannot sue for the specific performance
of the contract, nor ask for damages for the breach the contract, for the simple reason that there
is no contract between him and the other person for whom he does something to whom he

6. Referred from : https://indiankanoon.org/doc/374625/

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delivers something. So where a claim for compensation is made by one person against another
under s. 70, it is not on the basis of any subsisting contract between the parties but a different
kind of obligation. The juristic basis of the obligation in such a case is not founded upon
any contract or tort but upon a third category of law, namely, quasi contract or restitution. 1'
Fibrosa v. Fairbairn(1) Lord Wright has stated the legal position as follows "............ any
civilised system of law is bound to provide remedies for cases of that has been called
unjust enrichment or unjust benefit, that is, to prevent a man from retaining the money
of, or some benefit derived from, another which it is against conscience that he should
keep. Such remedies in English Law are generally different from remedies in contract or
in tort, and are now recognised to fall within a third category of the common law which
has been called quasi- contract or restitution."7

Mafatlal Industries Ltd., ... vs Union Of India Etc. Etc on 19 December, 1996:

"The juristic basis of the obligation in such a case is not founded upon any contract or tort but
upon a third category of law, namely, quasi-contract or restitution. In Fibrosa v. Fairbairn, 1943
AC 32 Lord Wright has stated the legal position as follows:

"..........any civilised system of law is bound to provide remedies for cases of what has been
called unjust enrichment or unjust benefit, that is, to prevent a man from retaining the
money of, or some benefit derived from, another which it is against conscience that he
should keep. Such remedies in English Law are generically different from remedies
in contract or in tort and are now recognised to fall within a third category of the common
law which has been called quasi-contract or restitution." 8

7. Referred from : https://indiankanoon.org/doc/948679/

8. Referred from : https://indiankanoon.org/doc/1198027/

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Conclusion:

A court will create a quasi-contract when an official agreement is lacking between certain
parties. Usually, disputes will arise over payments for services rendered or goods. The court
will be seeking to prevent unfair enrichment to any party involved in the dispute.

This makes a quasi-contract a substitute for a contract, designed to promote fair treatment, or
equity, between the parties involved. It's safe to say that quasi contracts are formed where legal
agreements were not established but should have been.

Typically, an actual contract is necessary to hold a defendant liable for goods or services. When
this is not the case, many jurisdictions in the United States will find that restitution may be
achieved through a quasi-contract.

As stated above, a quasi-contract isn’t a contract within the pure sense. It can be considered as
an invented contract.

This moreover may be the reason why the statute does not say the term “quasi-contract”
expressively, but indirectly covers the concept to prevent out of line improvement.

Hence, the basis of a quasi-contract is very basic that a contract cannot supersede the
requirement and sense of justice. When something is done for a person or a thing is delivered
to him without a needless deliberate, he is bound to form a compensation or restore the
aggrieved party to his past position.

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Is the Indian Contract Act 1872, on the subject exhaustive?.
The “quasi-contract” is covered in Chapter V of the Indian Contract Act, 1872, under the
heading of ‘of certain relations and resembling those created by contract’. I feel that the Indian
contract act, 1872 favours the term ‘quasi-contract’ but partially as it is not a real contract
because if they would have been in support of this term, then they would have included this
term in Chapter V of the act rather than giving the heading ‘Certain Relations resembling those
created by Contract’ but they mean by this title that they are referring to quasi-contracts [vii].

The term ‘quasi-contract’ is avoided in the chapter but this chapter is about the doctrine of
quasi-contracts. Nothing is precisely clear about the quasi-contracts. The founder of quasi-
contract based on the theory of unjust enrichment was Lord MANSFIELD who explained such
obligations based upon the law as well as justice to prevent undue advantage to one person at
the cost of another.

The concept was first taken up in the case Moses v. Macferlan. The facts of the case are as
such: Jacob issued four promissory notes to Moses and Moses indorsed them to Macferlan,
excluding by a written agreement, his personal liability on the endorsement. Even so,
Macferlan sued Moses on the endorsement and he was held liable despite which he had
excluded and, therefore, sued to recover back his money from Macferlan.

He was allowed to do so. After stating that such money cannot be recovered where the person
to whom it is given can “retain it with a safe conscience”, LORD MANSFIELD continued:

“Liability of this kind is hard to classify. Since it partly resembles liabilities under the law of
tort and partly it resembles contract since it owed to only a party and not a person or individual
generally. Therefore, it comes within the ambit of an implied contract or even natural justice
and equity for the prevention of unjust enrichment.”

Then came the theory of implied contracts which became very popular amongst the courts and
the theory of Lord MANSFIELD were discarded quite often. In the case of Sinclair v.
Brougham liabilities under the name of quasi-contract were taken which were against the law
and not within its ambit.

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So later on, it was decided that the doctrine was going against the law and hence the doctrine
of unjust enrichment prevailed over this theory after the case of Fibrosa Spolka Akeyjna v.
Fairbairn Lawson combe Barbour Ltd. In this case remedies arising from such obligations
neither constitute contract nor torts. They fall into category different form these two and that
is ‘quasi contract or restitution’. It was also observed that the precious theory was against public
policy and ultra vires to the law.

The principle of unjust enrichment requires: first, that the defendant has been ‘enriched’ by the
receipt of a “benefit”; secondly, that this enrichment is “at the expense of the plaintiff”; and
thirdly, that the retention of the enrichment be unjust.

The conclusion of quasi contract is that the principle of quasi-contract is often ignored but still
it holds a very important place, since the principle is grounded on the principles of justice and
equity. Despite the fact that quasi contract is moulded in the Indian Contract Act under a new
name. However, the basic nature and essence of the principle remains same without any drastic
change. When dealing with quasi contract, you may hear the term quantum merit.

This measures the severity of the plaintiff's suffering. If someone has wilfully breached a
contract, quasi contract recovery is less likely. Yet, you'll find this sort of restitution is often
less severe in instances when an employee wilfully breaches a contract. Thus, quasi-contracts
form an integral part of the contracts act and it definitely comes to an aid of the victim when a
person is enriched unjustly over the former.

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Bibliography & Webliography:

Books:

 Dr. Rega Surya Rao: Law of Contract

 A.K.Jain : Law of Contract

Webliography

 https://www.legalserviceindia.com

 https://blog.ipleaders.in

 https://www.lawctopus.com

 https://indiankanoon.org/

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