QUASI-CONTRACTUAL OBLIGATIONS UNDER INDIAN CONTRACT ACT 1872

A contract may be a retroactive arrangement between two parties who have no previous obligations to a minimum of each other. It is created by a judge to correct a circumstance during which one party acquires something at the expense of the opposite.

The contract aims to stop one party from unfairly taking advantage of things at the opposite party's expense. These arrangements could also be imposed when goods or services are accepted, though not requested, by a celebration. The acceptance then creates an expectation of payment.

Features of Quasi-contract:

·       It is a right which is out there not against a specific person or persons then , that during this respect it resembles a contractual right.

·       It doesn't arise from any agreement of the parties concerned it's imposed by law.

·       Such Quasi-contractual right is usually a right to money, and usually, though not always, to a liquidated sum of cash .

TYPES OF QUASI-CONTRACTS:

1)     Supply of necessaries (Section 68): according to section 68, if a person incapable of entering into a contract or any one whom he as legally bound to support is supplied by another with necessaries suited to his condition in life the one that has furnished such supplies I entitled to be reimbursed from the property of such incapable person.

Ex: ‘A’, supplies “B” a lunatic with necessaries suitable to his condition in life. ”A” is entitled to reimburse from B’s property.

 2)     Payment by an Interested person (Section.69) a person, who is interested in payment of money which another is bound by law to pay and who therefore pays it, is entitled to be reimbursed by other.

The essential requirements of Section.69 as follows:

The payment mode should be bonafide for the protection of one’s interest.

The payment should not be a voluntary one.

The payment must be like the opposite party was bound by law to pay.

Ex: “B” holds land Bengal on a lease granted by the Zamindar. The revenue payable by “A” to the government being behind his land is advertised purchasable by the government under the Revenue Law. The sale will be annulment of “B’s lease. ’B’ to prevent the sale and the consequent of annulment of his own lease pays to the Government the sum due from A. A is sure to observe to B the quantity so paid.

 3)     Obligation to pay for non-gratuitous acts (Section.70): When a person lawfully does anything for another person or delivers anything to him not intending to do so, gratuitously, and such other person enjoys the benefit thereof, the latter is bound to make the compensation to the former in respect of or restore, the things do done or delivered.

Ex: “A”, a tradesman lease goods at “B” house by mistake. B treats the goods as his own. He is bound to pay for them to A.

 4)     Responsibility of finder of Products (Section.71): an individual who finds goods belonging to a different and takes them into his custody is subject to an equivalent responsibility as Bailee. He is bound to take as much care o the goods as a man of ordinary prudence would under similar circumstances take of his own goods of the same bulk, quality and value. He must also take all necessary measures to trace its owner. If he does not, he will be guilty of wrongful conservation of the property till the owner is found out, the property in goods will vest in the finder and he can retain the products as his own against the entire world (except the owner).

 Ex: “F” picks up a diamond on the floor of ‘S’s shop. He hands it over to ‘S’ to keep it till the real owner is found out. No one appears to claim it for quite some week’s inspite of wide advertisement in the newspapers. ‘F’ claims the diamond from ‘S’ who refuses to return. ‘S’ is sure to return the Diamond to ‘F’ who is entitled to retain the diamond against the entire world except truth owner.

5)     Mistake or coercion (Section.72): an individual to whom money has been paid, or anything delivered by mistake or under coercion, must repay or return it to the one that paid it by mistake or under coercion.

Ex: “A” & “B” jointly owe Rs.100/- to “C”. A alone pays the amount to C and B not knowing this fact pays Rs.100/- over again to “C”. C is sure to pay the quantity to B.

Case laws for Quasi contract –

1.     Municipal Board, Agra v. Ram Krishna, (1933 ALJ 1414)

·       It was held by the Bench that the claim could not be considered to be in respect of any act done, or purporting to have been done, in pursuance of this Act or of any rule or bye-law made thereunder.

2.     Lothamasu Sambasiva Rao vs Thadwarthi Balakotiah, (AIR 1973 AP 342)

Circumstances must occur under any system of law in which it becomes necessary to hold one person to be accountable to another, without any agreement on the part of the former to be so accountable on the ground that otherwise he would be retaining money or some other benefit which has come into his hands to which the law regards the other person as better entitled, or on the ground that without such accountability the other would unjustly suffer loss. 

The three common law actions of a quasi-contractual nature

A.    For money paid by the plaintiff to the defendant's use

B.    For money had and received by the defendant to the plaintiff's use

C.    Quantum meruit. It is under the first two heads that Mr. Jagannadha Rao sought to put his case as, according to him. Section 70  incorporates what is a quasi-contract in the English Common Law.

——Nivethi Natarajan