• QUASI-CONTRACTS

◦ Introduction
‣ Section 68-72
‣ Applications similar to that which arise from a true contract, although no contract, express or
implied has in fact been entered into by parties.
‣ On grounds of NATURAL JUSTICE.
‣ These are quasi contracts because
• Enforceable like contracts
• The transactions could not be referred to as tortious or contractual
‣ parties involved do not intend to create a contract
‣ There is no actual offer or acceptance or agreement
◦ Quasi Contracts under ICA, 1872
‣ Section 68 – claim for necessaries supplied to person in capable of contracting, or on his
account
‣ Section 69 – reimbursement of person paying money due by another, in payment of which
he is interested
‣ Section 70 – obligation of person enjoying benefit of non-gratuitous act
‣ Section 71 – responsibility of finder of goods
‣ Section 72- liability of a person to whom money is paid or thing delivered by mistake or
under coercion
◦ Nature of Quasi-contracts
‣ Doesn’t arise from any formal agreement – but is imposed by law
‣ Based on principle of equity and good conscience
‣ Always a right to money - though not always a liquidated sum of money
‣ A suit for its breach may be filed like ordinary contract
S 73
‣
‣ Right of a party under quasi contract is available against particular person only not whole
world
‣ Although there is no contract - they are put in the same position as if they were a contract
between them
◦ Difference between Contract and Quasi-Contracts

No offer
no acceptance
willingness signify

Voluntary
obligation

force

◦ Theory of unjust enrichment

‣ Mahabir Kishore v. St of MP
• Principle of unjust enrichment requires:
◦ Defendant has been “enriched” by the receipt of a “benefit”
◦ This enrichment is “at the expense of the plaintive”
◦ Retention of the enrichment is unjust Justifies restitution

◦ Origin and Relevance

‣ Moses v. Macferlan
• Law as well as justice should try to prevent unjust enrichment, that is enrichment of one
person at the cost of another.
• Defendant is obliged by ties of natural justice and equity to refund the money.
 ‣ Fibrosa v. Fairborn
• Remedy different from one in contract or in tort. Third category of common law remedy
– quasi contract or restitution

◦ Section 68 - Supply of Necessaries

‣ Principle
• Person, incapable to enter into contractual obligations
• Supplied by another person
• Necessary suited to his condition in life
• Person who furnished is entitled to be reimbursed from the property of such
incapable person
‣ Necessaries - Meaning
• Includes Articles required to maintain a particular person in the state, degree and
station in life in which he is.
• Essentials to run a life
• An item will not be considered necessary, if a person already has sufficient
supply of the thing
• Necessaries include services
• Depends on facts and circumstances of each case
‣ Necessaries of life – wide scope
• Includes food, clothes, everything with circumstances permit.
• Elkington & Co v. Amery
◦ Engagement ring for one’s fiance – necessity. Vanity bag not included.
• Expenses incurred for minors education, marriage of his sister, funeral of minor’s
parents, expenses for necessary litigation, expenses for minor’s marriage.
‣ India
• Watkins v. Dhunoo
◦ Necessaries is include cost of defending a suit on behalf of minor.
‣ Liability of Minor?
• Only his estate is liable. Minor personally is not liable.
• Estate includes movable and immovable property.
• Where he doesn’t own property nothing shall be liable.
‣ Nature of remedy
• Remedy lies Against the property of the person and not the person himself.
◦ Section 69 - Payment by Interested Persons
‣ 2 conditions:
• One person is bound by law to pay BUT fails to pay.
• Another person who is interested in the property, payment of money- pays it
‣ The payment by the interested person must actually be made to another person and not to
himself.
‣ Person making the payment should not himself be bound to pay. Only interested in making
the payment in order to protect his own interest.
‣ Essentials
• Payer must be interested in making payment
◦ Establish his interest in making payment – it should be legally recognisable
• Plaintiff should not be bound to pay
◦ As legal or contractual liability. Pays to protect his own interest.
• Defendant should be under a legal compulsion to pay
◦ Legal liability
◦ Raghavan v. Alameru Ammal
‣ Where a person is morally bound and not legally compellable to pay- he will
not be bound to pay the party discharging his moral obligation.
• Payment should be made by one party to some other person
◦ Secretary of State for India v. Fernandez
‣ Certain government was tenant of a land-per to itself out of the rent due to the
landlord the arrears of land revenue.
• Right to be reimbursed

◦ Section 70 - Liability to pay for non-gratuitous acts

‣ Quantum Meruit
‣ Essentials
• A person should lawfully do something for another person OR
• Deliver something to him
• Must not intend to act gratuitously
• The other person-must enjoy the benefit thereof
‣ Not intending to do Gratuitously
• Act done Voluntarily + with thought of being paid
 ‣ Reject/against his will
• If a person delivers to another, the latter is open to refuse to accept it or return it
• One cannot compel a person to pay for services thrusted upon him against his will
‣ Request for services creates implied promise to pay
• Thus, under s. 70 - services should have been rendered without any request
‣ Lawfully does
• Services should have been rendered lawfully
‣ Non-gratuitous act
‣ Enjoys the benefit
• Joy to derive the direct benefit from the payment of services
‣ Principle of Quantum Meruit
• What one has earned
• Reasonable value for services
• Anson - A quantum meruit claim arises when work is done or services performed by one
person for another in circumstances which entitled the person doing the work or
performing the services to receive a reasonable remuneration therefor.
• Food Corp of India & Ors v. Vikas Majdoor Kandar Sahkari Mandli Ltd
◦ Payment claimed for extra work done beyond the terms of contract. Defendant
benefited. Held - extra payment be made.
• Puran Lal Shah v. St of UP
◦ Remedy by quantum Meruit is restitutory. It is recompense for the value of work
done- to restore him to the position if contract had not been made.
• Difference between Quasi Contract and Quantum Meruit
Implied in law a impliedin fact
legalfiction Actual contract

◦ Section 71 - Finder of Goods

‣ Essentials
• Person finds goods of another. Take them into custody.
• Is subject to responsibilities of a bailee
◦ S. 151
◦ Duty to return the goods after true owner is found
◦ If refuses to return-could be made liable for conversion
◦ Bound to take as much care of the goods as a man of ordinary
prudence, under similar circumstances, take of his own goods of the
 same quantity, quality and value
◦ If he doesn’t – guilty of wrongful conversion of the property.
◦ Till the owner is found- property will vest in the Finder. He can retain
the goods as his own against the whole world.
‣ Duties of Finder of Lost Goods
• Special kind of Bailee
• Duty to take reasonable care of goods - section 151.
◦ (Ordinary prudence…) + If he has taken such care, he is not
responsible for the loss destruction or deterioration of the property -
section 152
• Duty not to make unauthorised use of good - s.153
◦ If he does – liable to make compensation to the owner for any
damages arising from such use
• Duty not to mix goods - s. 155
◦ If finder of goods mixes the goods with his own goods- with owner’s
consent - both actual owner and finder shall have an interest in
proportion to their respective shares
◦ Without consent - liable for cost of separation s. 156
◦ If inseparable- compensation - s. 157
• Duty to return goods s. 160 & 161
◦ If not returned – responsible for the loss or destruction of the goods
from that time
‣ Rights of Finder
• May sue for specific reward offered
◦ Retain the goods until he receives it
• Right of lien
◦ Cannot sue for compensation from owner for expense voluntary
incurred to preserve the goods and to find the owner. Can retain the
goods until he receives such compensation
• Right to sell the goods found - S.169
◦ Under certain circumstances
‣ Owner cannot be found
 ‣ Owner refuses to pay the lawful charges to the finder
‣ When goods are in danger of perishing its value
‣ Lawful charges of the founder in respect of the thing found amount
to 2/3 of its value

◦ Section 72 - money paid under impression of mistake or coercion

‣ Money paid under mistake or coercion may be recovered.
‣ No distinction between mistake of law or mistake of fact
‣ Legislative intent
• Prevent UNJUST ENRICHMENT
• No one can be allowed to enrich himself unjustly at the cost or the expense of another
• Object is RESTITUTION
• Restoration of money or thing to the real or proper owner or reparation of injury or
making good any loss which might have been occasion to the person making payment
and delivering thing on account of payment of money or delivery of things by mistake or
under coercion
‣ Money must not be legally due. But paid by mistake or coercion.
‣ If mistake either of law or fact is established- entitled to recover the money. Irrespective of
any consideration whether the money had been paid voluntarily. Subject to questions of
estoppel, waiver, limitation etc.
‣ If neither mistake of Law or fact is established - party may rely on coercion