UNDERSTANDING QUASI CONTRACT
AS PER INDIAN CONTRACT ACT, 1872
Quasi Contract as per the Indian Contract Act, 1872
Quasi-Contracts: These are obligations similar to contracts, but they arise from the law rather than an agreement between the parties. Examples include cases of unjust enrichment and obligations to restore benefits. A quasi-contract is a retroactive arrangement between two parties who have no previous obligations to one another, created by a judge to correct a circumstance in which one party acquires something at the expense of the other. A quasi-contract is not an actual contract but rather a legal obligation that arises when one party benefits at the expense of another, and it would be unjust for them to retain that benefit without compensating the other party. The Indian Contract Act, 1872, recognizes quasi-contracts under Section 68 to Section 72.
Key Provisions:
Section 68: This section deals with situations where a person supplies goods or services to another person who is incapable of entering into a contract (e.g., a minor). The provider can claim reimbursement from the party who benefits from the goods/services.
Section 69: If a person, who is interested in the payment of money, pays a debt that is not theirs, they can seek reimbursement from the party who owed the money, provided the payment was made for the benefit of that party.
Section 70: If someone benefits from the goods or services provided by another without a contract, they must compensate the provider as long as the provider did not intend to gift the benefit.
Section 71: A person who receives goods or services by mistake must return them or compensate the provider if it is not possible to return them.
Section 72: If a person mistakenly delivers something to another, the recipient must return it or pay for it if it cannot be returned.
Doctrine of Unjust Enrichment
The doctrine of unjust enrichment prevents one party from unjustly benefiting at the expense of another. Under this doctrine, if a person has received a benefit and it would be unjust for them to keep that benefit without compensating the other party, the law provides a remedy.
Key Elements:
Enrichment: One party has received a benefit or enrichment (monetary or otherwise).
At the Expense of Another: The benefit was obtained at the cost of another party.
Unjust: It would be unfair or unjust for the enriched party to retain that benefit without compensation.
Relationship Between Quasi-Contract and Unjust Enrichment
Quasi-contracts often arise as a remedy for unjust enrichment. If a party is enriched at the expense of another without a valid contract, the law may impose a quasi-contract to ensure that the enriched party compensates the other, thereby preventing unjust enrichment.
