A quasi-contract is a contract that is established by order of the court without consent between the parties. As specified by the Indian Contract Act 1872, an essential legal agreement is not a quasi-contract.
While there is no definition of quasi-contracts under the Indian Contract Law 1872, Sec 68-72 refers to ‘some relationships similar to those established via contracts.’ Virtually one contract may be characterized as a duty imposed by one party’s legislation to prevent its unfair enrichment.’ In a quasi-contract, there is no written contract, offer and acceptance. Quasi-contracts are executed when someone benefits, does not pay, or the other person may have to face the weight of anything.
It is essential to highlight first that a contract is an agreement before it becomes. There is thus no contract when there is no agreement. However, some responsibilities do not originate in a deal. The duty not to damage someone else or his property, for example, decisions or judgments of the courts, quasi-contractual obligations, etc. Those duties are not by definition ‘contracts’ but may be enforceable in a court of law.
Virtual contracts are founded on the concept of “Nemo debet locupletari ex aliena jactura,” which translates as “No one should become wealthy by exploiting the suffering of another.” For this reason, the concept of “unjust enrichment” governs the responsibility of parties who enter into quasi-contractual duties with one another. To put it another way, it implies that no one should be unfairly wealthy at the expense of another person’s suffering. In other words, no one should gain something unfairly if doing so would result in a loss for someone else.
Ex– A deal with B to provide items to the home of A. B unintentionally delivers it to C, who eats and refuses to pay for these items.
Now, in the example above, C has benefited from products but has not paid for them, and as a result, B is forced to shoulder the whole financial load. In such instances, the court’s orders C to reimburse B for the benefits he has derived from the items in question. Whenever the courts impose such duties on a person who benefits from products or any quantity of money, the courts want to make that person responsible for compensating the other person responsible for providing those things. It should be noted that the Indian Contract Act, 1872 did not include the terms “Quasi Contracts,” but rather “certain relations approximating contracts,” as defined in Section 68 of the Act, instead of “certain relations like contracts.” This implies that they are not contracts but are considered contracts when the law imposes specific duties on the parties involved in the transaction.
The Indian Contract Act 1872 specifies five circumstances in which Quasi-contracts or quasi-contracts are considered to be imposed, each of which is defined as follows:
Section 68- Needs supplied to those who are unable to contract
A person who cannot engage into a contract or someone legally obliged to support it must be provided with the requirements for its condition of existence by another person. The individual who supplied such supplies is entitled to the property of such an unable person or that lawfully obliged person being repaid.
Ex– A provides the wife and children of B, a lunatic, according to their living situation. A may be reimbursed from the property of B.
The term “necessaries” does not refer to the basic requirements but rather to those things that may be required to keep a person alive under the circumstances of their existence. It depends on the individual’s current situation and their needs at the time of actual delivery of the products.
Because a juvenile’s agreement is invalid, he cannot be required to pay for the services performed or products supplied to him. However, the law recognizes a quasi-contractual duty to pay the necessaries provided to a minor or lunatic from their inheritance, recognized by the court.
Section 69- Reimbursement of money owing to someone else who is interested in paying
A person who is interested and therefore spends money to be paid by someone else and is thus entitled to a return. Legally obliged and thus paid for, the individual is entitled to be reimbursed by the other person.
Section 70- The obligation of a person to profit from a non-free act
Suppose a person performs something for another person legally or sends anything to him without meaning to do so freely, and that person benefits from this. In that case, that person shall be obliged to compensate the former for or return what is done or delivered.
Ex– A saves B’s fire property. A shall not be entitled to compensation from B if the facts show that he intends to operate without charge.
Section 71- Finder of Goods
A bailee is a person who finds another’s property. A bailee is a safe protector of goods who should return them to the rightful owner or arrange for their return. The bailee is now the “owner” or “guardian” of the product. Kajal finds a diamond on the floor of a shop. She picks it up and guards it. Kajal searches for the diamond’s valid owner. Priya had the diamond. Save for Priya, and Kajal has the right to keep the gems and return them to her. In this case, Priya must compensate Kajal for her losses.
DUTIES OF THE FINDER OF GOODS
The finder must use reasonable caution.
They must not utilize the products for personal gain.
They must not combine discovered and personal items.
They must make reasonable attempts to locate the actual owner.
Section 72- Mistake or under coercion
Any individual whose money was paid or given by mistake or coercion must refund or return it. The payment by error is a payment that was not legally due and cannot be carried out; it is the mistake that the money paid was owed if it was not owed. Force payment or extreme pressure payment will be mistakenly considered as a payment. This quasi-contractual obligation is derived from the idea of ‘unfair enrichment’, including the concept of equity. Therefore, it cannot be refunded if the applicant has not suffered any harm or loss.
Article 72 implies extreme pressure. Excessive pressure. It was used generally and customarily, not according to Section 15 of the contract law.
Quasi-contracts are not contracts in the sense of the Indian Contract Act 1872 but rather obligations imposed by law and applicable only in certain circumstances. Almost all agreements are required to prevent one party from becoming too powerful.
Author’s Name: Rishabh Mishra (BBD University, Lucknow)