Quasi Contracts or Certain Relations Resembling Those Created by Contract

Lord Mansfield considered to be the founder of quasicontractual obligations Which in Indian contract  Act have been  put under certain relations resembling those3 created by contract. According to him the basis of these opbligations is that l;aw as well  as justice should try to prevent unjust enrichment o fone person at the cost of another.That   isz  to say one should not be enriched at the cost o f another.Sometimes in few circumstances occur where law aq swell as justice require that acertain person shouldbe require to conform to  an obligation although  he has neither committed any tort nor broComtract Act.There are 5 kinds of quasicontractual obligations under  this chapter:

.Kinds of Quasi Contract:

(1) SUPPLY OF NECESSITIES (Sec.68)

If a person, incapable of entering into a contract, or anyone whom he is legally bound to support, is

supplied by another with necessaries suited to his condition in life, the person who has furnished such

supplies is 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 be reimbursed

from B’s property.

(2) PAYMENT BY AN INTERSTED PERSON (sec. 69)

A person who is interested in the payment of money which another is bound by law to pay, and who

therefore pays it, is entitled to be reimbursed by the other.

Ex. B holds land in Bengal, on a lease granted by A, the Zamindar. The revenue payable by A to the govt.

being in the arrears, his land is advertised for sale by the govt. under the revenue law the consequences

of such sale will be 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.

The conditions of the liability under sec. 69 are:

  1. The plaintiff should be interested in making the payment. It is not necessary that he should have a

legal proprietary interest in the property in respect of which the payment is made. However, often it is

used to determine whether plaintiff was interested. Sec. 69 does not invite such judicial limitation that a

person who has not an interest in the property can be interested in a payment of that property.

  1. The plaintiff himself should not be bound to pay. He should only be interested in making the payment

in order to protect his own interest.

  1. The defendant should be under legal compulsion to pay.
  2. The plaintiff should have made the payment to another parson and not to himself.

(3) OBLIGATION TO PAY FOR NON-GRATUITOUS ACTS (Sec. 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

compensation to the former in respect of, or to restore, the things so done or delivered.

Ex. 1. A, a tradesman, leaves goods at B’s house by mistake. B treats the goods as his own. He is bound

to pay for them to A.

Ex 2. A saves B’s property from fire. A is not entitled to compensation from B, if the circumstances show

that he intended to act gratuitously.

Before any right of action under sec. 70 arises, 3 conditions must be satisfied:

(1) The thing must have been done lawfully.

(2) the person doing the act should not have intended to do it gratuitously.

(3) The person for whom the act is done must have enjoyed the benefit of the act[union of India vs. Sita

ram, AIR 1977,S.C. 329]

  1. A village was irrigated by a tank. The government effected certain repairs to the tank for its

preservation and had no intention to do so gratuitously for the zamindars. The zamindars enjoyed the

benefits thereof. Held, they were liable to contribute {Damodar mudaliar vs. secretary of state f

or India,

1894, 18 Mad. 88}.

(4) RESPONSIBILITIES OF FINDER OF GOODS (Sec. 71)

A person, who finds goods to another and takes them into his custody, is subject to the same

responsibilities as a bailee. He is bound to take as much care of the goods as a man of ordinary prudence

would, under similar circumstances, take of his own goods of the same bulk, quality and value. If he

does not, he will be guilty of wrongful conversion of the property. Till the owner is found out, the

property in goods will vest in the finder and he can retain the goods as his own against the whole world.

Ex. F picks up a diamond on the floor on k’s shop. He hands it over to K to keep it till true owner is found

out. No one appears to claim it for quite some weeks in spite of the wide advertisement in the

newspapers. F claims the diamond from K Who refuses to return. K is bound to return the diamond to F

who is entitled to retain the diamond against the whole world except the true owner.

(5) MISTAKE OR COERCION (Sec. 72)

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

repay or return it to the person who paid it by mistake or under coercion.

Ex. (1) A pays some money to B by mistake. It is really due to C. B must refund the money to A. C,

however, cannot recover the amount from C is no privity of contract between B and C.

(2) A railway company refuses to deliver up certain goods to the consignee, except upon the payment of

an illegal charge for carriage. The consignee pays the sum charged in order to obtain the goods. He is

entitled to recovers so much of the charge as is illegally excessive.

Sec. 72 does not draw any distinction between a mistake of fact and mistake of law {D. cawasji & co. vs.

state, AIR. 1969 mys.23}

Ex.(1). K paid sales tax on his forward transactions of bullion. Subsequently this tax was declared ultra

vires. Held, K could recover the amount of sales tax and that sec. 72 is wide enough to cover not only

mistake of fact but also mistake of law.{sales tax officer, benares vs. kanhaiya lal mukand lal safaf, 1959

S.C.J. 53}.

(2) An insurance company paid the amount on a policy under the mistake that the goods had been

destroyed by a peril insured against. The goods infact had been sold. Held, the money could be

recovered by the insurance company {Norwich etc. society ltd. vs. price W.H. LTD 1934 A.C. 455}

(3) An insurance co. paid the amount on a policy which had lapsed by a reason of non- payment of

premiums by the assured. The company knew this fact but it was overlooked at the time of payment.

Held, the company could recover the amount “however careless the party (company paying money) may

have been omitting to use the diligence to inquire into the fact”{Kelly vs. solari 1841 9 M. &W. 54}

CONCLUSION

The concept of quasi-contract evolved during the early common law period when there was no suit for unjust enrichment of one party at the cost of the other. For solving this problem, the courts came up with the concept of quasi-contract or contract implied-in-law. These types of contracts could arise when a person has accrued benefit at the cost of another person and for that reason the latter has suffered. Then the courts would imply the existence of a contract and restore the benefit or an equivalent value to the plaintiff. Though this concept of quasi-contract was repealed by the House of Lords, later it was again recognized and restored. The contract implied-in-fact or quantum meruit though a part of quasi-contract, yet there exists differences. A claim for quantum meruit can be called for when one party gains benefit for the actions of the other party. The element of unjust enrichment is not gratuitous for such a claim. On the basis of the cases studied, it can be concluded that the recovery under claim for quantum meruit is more than that under quasi-contract. Moreover quantum meruit does not satisfy the elements of quasi-contract. Quasi-contract is not an actual contract. It is a contract implied to be in existence as interpreted by the courts in order to restore justice and equity. However, quantum meruit is an expressed or implied contract where the parties have not entered into any written agreement but their actions imply that they are bound in a contractual relationship.

Thus, it can be concluded that though quantum meruit is a part of quasi-contract, it provides broader area of claim to the people by eliminating the criteria of unjust enrichment. This claim arises for any kind of enrichment of one party due to the actions of the other party. Another reason supporting the merits of quantum meruit is that in these types of claims, damages are calculated on the basis of equity. Whereas in claims for quasi-contracts, damages are analyzed on the basis of inequitable gain of one party at the expense of the other party.

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