Topic: Explain the meaning & rationale behind Quasi Contract.

Briefly write about Quasi Contract in Indian Contract Act.

What is Quasi Contract

An obligation that the law creates in the absence of an agreement between the parties.
It is invoked by the courts where Unjust Enrichment, which occurs when a person
retains money or benefits that in all fairness belong to another, would exist without
judicial relief.

Because a quasi contract is not a true contract, mutual assent is not necessary, and a
court may impose an obligation without regard to the intent of the parties. The remedy is
typically restitution or recovery under a theory of quantum meruit. Liability is determined
on a case-by-case basis.

i) It is an obligation, which the law creates in the absence of the agreement.

ii) It can be described as certain contracts resembling those created by the
contract
iii) It is based on the maxim.

Features

i.) In first place, such rights is always a right to money and generally, though not
always, a liquidated sum of money.
ii.) It does not arise from any agreement of the parties concerned, but it is
imposed by law.
iii.) It is a right which is available not against all the world, but against a particular
person or persons only, in this respect it resembles a contractual right.

The principle of unjust requires:

i.) The defendant has been enriched by receipt of the benefit.

ii.) This enrichment is at the expense of plaintiff.
iii.) The retention of enrichment is unjust.

Kinds of Quasi-Contracts:

i) Supply of necessaries persons who are incompetent to contract (section68).

ii) Payment by the interested person (Section 69)
iii) Non-Gratuitous Acts (Section70)
iv) Finder of Goods (Section 71)
v) Payment of money or deliver of goods by the mistake or under coercion
(Section72)

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Section 68:

Claim of necessaries supplied to a person incapable to contract

i) Any person supplying necessaries of life to person who are incompetent to enter
into contract is entitled to claim the price from the other persons property.
ii) Similarly where money is paid to such person for the purchase of necessaries,
reimbursement can be claimed.

Section 69:

Right to recover money paid for another person.

i) A person who has paid a sum of money which another is obliged to pay, is
entitled to be reimbursed by that another person provided the payment has been
made by him to protect his own interest.
ii) Here the person who makes the payment must honestly believe that his own
interests demands payment.

Section 71:

Responsibility of finder of Goods

i) A person who finds goods belonging to another & takes them into his custody is
subject to same responsibility as if he were a bailee.
ii) Thus a finder of the goods has.
(1) To take proper care of the property as men of ordinary prudence would
take.
(2) No right to appropriate the goods.
(3) To restore the goods if the owner is found.

Section 72:

Liability of money paid or thing delivered by mistake or under coercion

1) The person to whom the money has been paid or anything delivered by mistake or
under coercion, must repay or return it. Every kind of payment of money or delivery
of goods for every type of mistake is recoverable.

Section 73, Para 3

Compensation for failure to discharge obligation created by quasi contracts

i) When an obligation is created by quasi contract is not discharged, the injured

party is entitled to receive the same compensation from the party in default,
as if that person had contracted to discharged it and had broken his contract.

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Quantum Merit:

i) Literally means, as much as earned or as much as merited

ii) The party can claim remuneration when the party when it has completed his
part of the duties & the other party repudiates the contract or due to some
event the performance of contract becomes impossible.
iii) The right to claim quantum merit does not arise out of control as the right
damages does; it is a claim on quasi contractual obligation which the law
implies in circumstances

Claim of Quantum Merit:

I) When an agreement is discovered to be void. (Section 65)

II) When something is done without any intention to do so gratuitously (Section 70).
III) When there is an express or implied contract to render services but there is no
agreement as to remuneration.
IV) When the completion of the contract has been prevented by the act of the other
party to the contract.
V) When a contract is divisible.
VI) When an indivisible contract is completely performed but badly.

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