Law Relating to Quasi-Contracts in India
A
quasi-contract is not an actual contract but an obligation imposed by
law to prevent unjust enrichment of one party at the expense of another.
Although no agreement or consent exists between the parties, the law enforces
certain obligations as if a contract were present.
The
provisions relating to quasi-contracts are codified under Sections 68 to 72
of the Indian Contract Act, 1872. These sections are based on the
principle of equity, justice, and good conscience.
Features of Quasi-Contracts
- Absence of
Agreement: There is no formal agreement or mutual consent between the parties.
- Legal Obligation: The obligation
arises due to law, not through a contract.
- Prevention of
Unjust Enrichment: The main objective is
to prevent one party from being unjustly enriched at the expense of
another.
- Enforceable by Law: Although not a
true contract, quasi-contractual obligations are enforceable in a court of
law.
Types of Quasi-Contracts (Sections 68-72)
1. Supply of Necessaries (Section 68)
If
a person incapable of entering into a contract (e.g., a minor or a person of
unsound mind) is supplied with necessaries suitable to their condition in life,
the supplier is entitled to be reimbursed from the property of the incapable
person.
Example:
A
supplies food and clothing to B, a minor. A can recover the reasonable cost of
the necessaries from B's estate.
2. Payment by an Interested Person (Section 69)
If
a person voluntarily pays money that another person is legally bound to pay and
the payer is interested in making the payment, the payer is entitled to
reimbursement.
Example:
A
owns a property that is leased to B. If C, a neighbor, pays the property taxes
on behalf of A to prevent a legal penalty, A is liable to reimburse C.
3. Obligation to Pay for Non-Gratuitous Acts
(Section 70)
When
a person lawfully does something for another or delivers something to another,
not intending to act gratuitously, the other person must compensate the former
if they accept the benefit.
Example:
A
finds B's lost cattle, takes care of them, and returns them to B. B is
obligated to pay A for the expenses incurred.
4. Finder of Goods (Section 71)
A
person who finds goods belonging to another must take care of them as a bailee
and is entitled to compensation for expenses incurred in preserving the goods.
Example:
A
finds B's expensive watch and spends money repairing it. B must reimburse A for
the repair costs if A returns the watch.
5. Money Paid or Goods Delivered by Mistake or
Coercion (Section 72)
A
person to whom money is paid or goods are delivered by mistake or under
coercion is obligated to return it.
Example:
A
mistakenly pays B ₹10,000, thinking they owe it. B is bound to return the
amount.
Legal Implications of Quasi-Contracts
- Enforceability: Quasi-contractual
obligations are legally enforceable, and remedies include restitution or
reimbursement.
- Scope of
Application: They arise in situations involving unjust enrichment, mistaken
payments, or non-gratuitous acts.
- Doctrine of Unjust
Enrichment: Quasi-contracts uphold the principle that no person should unjustly
gain at another's expense.
Judicial Precedents
- Great Northern
Railway Co. v. Swaffield
- A railway company
took care of a horse that was not collected by its owner. The court held
that the owner must reimburse the company for its care.
- Mohammad Munawar
Khan v. Vidhyadhar Joshi
- The court
reiterated that under Section 72, money paid by mistake must be returned
by the recipient.
Conclusion
Quasi-contracts
are a unique category of obligations created by law to promote fairness and
prevent unjust enrichment. Although there is no mutual agreement, these
obligations are treated as if they arise from a contract, ensuring justice and
equity in special circumstances. Sections 68 to 72 of the Indian Contract
Act provide a robust framework for resolving disputes related to such
obligations.
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