Law of Contract – Quasi Contracts


There are situations where even in absence of contract, certain social relationships result in specific obligation towards specific person. They are not contracts because parties have no prior consensus. But the facts of the circumstances are such that a similar relation is presumed. These are known as quasi contracts.

Quasi contracts are based on principles of equity, justice and good conscience. They are based on the equitable principle that a person shall not be allowed to enrich himself at the expense of another. They are not from the agreement but are imposed by the law for an orderly and just society. These are neither torts as here the obligation is towards specific person.

Law enumerates following five circumstances as quasi-contracts –

(a) Claim for necessaries supplied to persons incapable of contracting

  • Person incapable of entering into contract, such as minor or lunatic

  • He or his dependents are supplied with

  • Necessaries suited to his condition in life

  • Person supplying such necessaries is entitled to claim the price from the person’s property.

For example, A supplies B, a lunatic or B’s wife or child, with necessaries suitable to their condition in life. A is entitled to be reimbursed from B’s property.

It is important that the supplies are limited to necessaries and no claim for luxury articles can be made.

(b) Reimbursement of money paid due to another

A person who has paid a sum of money which another is obliged to pay, is entitled to be reimbursed by that other person provided the payment has been made by him to protect his own interest.

For example, B holds land in Bengal, on a lease granted by A, the zamindar. The revenue payable by A to the Government being in arrear, his land is advertised for sale by the Government. Under the revenue law, the consequence of such sale will be the annulment of B’s lease. B, to prevent the sale and the consequent annulment of his own lease, pays to the Government the sum due from A. A is bound to make good to B the amount so paid.

(c) Obligation of person enjoying benefits of non-gratuitous act

  • Person lawfully does or delivers anything to another

  • Not intending to do so gratuitously

  • Such other person enjoys the benefit thereof

  • The latter is bound to restore the thing or make compensation to the former.

For example, A, a trader, leaves goods at B’s house by mistake. B treats the goods as his own. He is bound to pay A for them.

(d) Responsibility of finder of goods

A person who finds goods belonging to another and takes them into his custody, is subject to the same responsibility as a bailee. Thus, his duties are –

  1. Take proper care of the property as man of ordinary prudence would take

  2. Not to appropriate the goods

  3. Restore the goods to its owner, if the owner is found.

For example, A, a shop owner, finds a gold ear ring in his shop. He has CCTVs installed in his shop, but he does not care to examine the footage. Nor keep it in safe, as the item requires. But keeps it on his desk, from where it goes missing. A is liable to compensate the owner of the ear ring for the loss.

It is important to note that the finder of goods can claim reimbursement for expenditure incurred for preserving the goods and in searching the true owner. He may also claim any award, if announced by the owner. If the real owner refuses to pay the compensation or the award, the finder can exercise his right of lien, that is, refuse to deliver the article.

Finder of goods may also sell the goods under certain conditions.

  1. When a thing which is commonly the subject of sale is lost,

  2. If the owner cannot with reasonable diligence be found, or

  3. If he refuses, upon demand, to pay the lawful charges of the finder,

The finder may sell it –

  1. when the thing is in danger of perishing or of losing the greater part of its value, or,

  2. when the lawful charges of the finder, in respect of the thing found, amount to two-thirds of its value.

(e) Liability for money paid or thing delivered by mistake or by coercion

A person to whom money has been paid, or anything delivered, by mistake or under coercion, must repay or return it.

For example, A orders a pizza over a phone call. The delivery boy mistakenly delivers it to B. B eats the pizza. B is bound to pay the price of the pizza.

In all the above cases the contractual liability arises without any agreement between the parties.

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