Initially, English law identified all about the quasi-contractual obligations. A number of obligations are stated in Indian Contract Act which aren’t contracts in reality as they lack certain elements of a contract, though they are enforceable in the court of law. These obligations are known as Quasi-contractual obligations. Sections 68-72 of Ch-5 of the Indian Contract Act, 1872 deal with quasi-contracts. However, a proper definition is not provided for Quasi-contract in the Indian Contract Act.
A Quasi contract could be rights and liabilities of the parties involved without having a formal contract. Thus, an obligation is created by law to obtain justice between the parties. According to the law, an individual is prohibited from enriching themselves at the cost of another. If such obligations aren’t imposed, amongst the involved parties, one party would enrich itself unjustly. Therefore, a Quasi-contract is a form of remedy, which distinguishes it from a pure contract. Formation of quasi-contract enables the party to take back the profit that enriched party took at its own expenses.
Law related to Quasi-contract, thus requires no consent-statement in between the parties involved. The obligations on the involved parties are according to the law than by their assent.
Such circumstances may often arise where the legal obligation lies on an individual to fight injustice despite the fact that the individual has not engaged in any tortious behaviour or breached any contract.
Quasi contracts generally are based upon the idea of “Nemo debet locupletari ex aliena jactura”, translating to “No man should prosper at the expense of another”. In the event of quasi contractual duties, responsibility is predicated on the notion of “unjust enrichment”.
It fundamentally means that no one should be rewarded unjustly at the expense of another's misfortune. That is to say, no one should gain something unjustly when doing so may result in a loss for someone else.
For example, suppose X forgets his products in Y's house. Y has a legal responsibility to return the products to Y. This further demonstrates that Y cannot benefit at the expense of X. Quasi-contractual Obligation is the term used to characterise certain types of responsibilities.
The liability imposed in quasi-contracts is founded on the idea of unjust enrichment. When it comes to paying for services provided, or commodities supplied or consumed, quasi-contact is used. The main question that arises in such cases is the culpability of the individual who has been enriched. Because the goal of a quasi-contract is to avoid unfair enrichment, the benefitting party's obligation is limited to the value of the services provided or the cost of the items used or supplied. As a result, the obligation is restricted to the benefit amount only.
Features of a Quasi-Contract
- They do not have their origins in an offer and its acceptance, unlike a normal contract between the parties.
- They are founded on natural justice principles of fairness, equity, and good conscience.
Relevant Sections of the Indian Contract Act:
Section 68 (Claim for necessaries supplied to person incapable of contracting, or on his account)
If someone takes care of the "necessaries" for a person who is incapable of contracting (for example, a minor or a mentally challenged person) or the dependents of such a person, he has the right to be reimbursed from the incapable person's property.
Section 69 (Reimbursement of person paying money due by another, in payment of which he is interested)
If a person A pays anything in someone else's (a person B's) place then B is legally obligated to pay, so B will compensate A. Please keep in mind that individual A should be 'interested' in receiving this cash. It's an implicit indemnity situation.
Section 70 (Obligation of person enjoying the benefit of the non-gratuitous act)
When a person legitimately provides something for another person (for example, delivers a good or a service) without intending to do so "gratuitously," and the other person benefits from such delivery, the latter is obligated to repay the former. A gratuitous act is one that is performed for another without expecting anything in return. Giving someone a present, for example, is a gratuitous act.
Section 71 (Responsibility of finder of goods)
A person who discovers goods that belong to someone else is considered a bailee. A bailee is simply a keeper of the items who is responsible for returning them to the original owner or disposing of them in the manner that the original owner desires. As the temporary "possessor" or "custodian" of the items, the bailee has various responsibilities and powers.
Duties of finder of the goods:
- The finder has a responsibility to exercise reasonable caution.
- He or she has a responsibility not to use the commodities for personal gain.
- He has a responsibility not to mix the found products with his own.
- He or she is responsible for making reasonable attempts to locate the true owner of the goods.
Rights of the finder of the goods:
- Right to Lien– The right to keep the things discovered until he is compensated for all costs incurred in locating the owner.
- Right to Sue– If the owner has published a reward for whoever discovers the item, the finder has the option of suing the owner or keeping the item until he is rewarded.
- Right to Sell-The finder of things has the right to sell the goods in certain circumstances.
Section 72 (Liability of person to whom money is paid or thing delivered by mistake or under coercion)
If something is given to a person through "coercion," he is responsible for repaying it. For example, Navrana and Rajkumar share a flat and split the rent payment in half. Without realising it, Navrana pays the landlord again, despite the fact that Rajkumar has already paid the entire rent. In this scenario, the landlord is responsible for returning the money that was provided to him by the tenant.
Difference between a Contact and a Quasi-contract:
A quasi-contract might be viewed as a legal inference or a constructive contract. It's essentially a fictional contract designed to give the offended party a remedy, which isn't the case in an express contract. In the event of quasi-contracts, the parties' intent is not taken into account. Whereas, in the case of an express contract, the parties' intent is critical because there would be no contract at all if they did not intend to engage into one. In the case of an express contract, the parties' obligations define the contract, forming the contract's terms. However, in the event of a quasi-contract, the duties are defined as a result of the development of a contract.
Notions behind Quasi-contracts:
Quasi-contracts fall under the heading "Of certain ties approximating those generated by contract" in Chapter V of the Indian Contracts Act, 1872. Although the term "quasi-contacts" is not specifically mentioned, it can be assumed that the statute's writers were referring primarily to the concept of a quasi-contract and the law of unjust enrichment.
In Hari Ram Seth Khandsari v. Commissioner of Sales Tax[1], the Court concluded that, notwithstanding the absence of the phrase in this chapter, this chapter is about the doctrine of quasi-contracts.
In the case of Moses v. MacFarlane[2], the concept of a quasi-contract was first considered (an English case). Lord Mansfield argued in this case that such a responsibility was founded on the law as well as justice in order to prevent undue benefit to one person at the expense of another.
To summarise, the three elements that must be present in order to apply the concept of quasi-contracts, according to the Court's ruling in Mahabir Kishore & others v. the State of MP[3]-
- There must be unfair enrichment as a result of receiving a benefit.
- The enrichment should occur at the expense of someone else.
- It is immoral to keep such enrichment.
Conclusion:
In the strictest sense, a quasi-contract is not a contract. It's possible that it's a bogus contract. This could also explain why the statute does not expressly contain the word "quasi-contract," but instead covers the concept of preventing unfair enrichment in a roundabout way.
SOURCE ; /www.latestlaws.com
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