Quasi-Contractual Obligations

Quasi contracts, also known as implied-in-law or constructive contracts, are legal constructs designed to prevent unjust enrichment in situations where no actual contract exists between two parties. These are not true contracts but are instead created by the court to address unfairness and prevent one party from benefiting at the expense of another. The essential elements of quasi contracts include:

Benefit Conferred: One party must have provided a benefit, which could be in the form of goods, services, money, property, or other non-monetary advantages, to another party.
Knowledge and Acceptance: The party receiving the benefit must have been aware of it and must have accepted or retained it. Acceptance can be either explicit or implied through conduct.
Unjust Enrichment: The benefit retained by the receiving party must be considered unjust or inequitable. This implies that it would be unfair for the receiving party to keep the benefit without providing compensation to the party who conferred it.
Absence of Contract: There must be no valid contract or formal agreement governing the transaction or relationship between the parties. Quasi contracts are applied in scenarios where no actual contract is present, but fairness dictates the imposition of contractual obligations.
Restitution: The court may order restitution, requiring the enriched party to compensate the party that conferred the benefit. Restitution aims to restore the party who provided the benefit to their original position, typically based on the value of the benefit received.

The doctrine of unjust enrichment occurs when one party gains a benefit at the expense of another in a way that is deemed unfair or inequitable. This situation can arise from a variety of circumstances, such as a mistake, error, accident, or other factors that create an imbalance in the rights and obligations between the parties. The principle seeks to address situations where it would be unjust for one party to retain the benefit without compensating the other party, ensuring that equity and fairness are maintained in their relationship. This legal doctrine serves to prevent one party from being unjustly enriched at the detriment of another, thereby promoting justice and fairness in contractual and non-contractual relationships.

To claim unjust enrichment, the claimant must demonstrate that the other party has received a benefit or advantage and that they have suffered a loss or deprivation as a result. Additionally, the claimant must establish that there is no legal basis or justification for this enrichment, meaning there was no valid contract, agreement, or legal obligation permitting the enriched party to receive the benefit without compensation. Lastly, it must be shown that allowing the enriched party to retain the benefit without compensating the deprived party would be unjust or inequitable.

Quasi-contractual obligations covered by the Indian Contract Act, 1872"

1.Section 68 of the Indian Contract Act, 1872, states that if a person supplies necessaries to someone incapable of contracting due to a disability, such as minority or unsoundness of mind, they are entitled to reimbursement from the property of the person who received the necessaries. This includes situations like defending a lawsuit on behalf of a minor to protect their property, lending money to a minor to prevent their property from being sold under a decree, or providing funds for a minor's marriage.

2.As per the provisions of Section 69 of the Indian Contract Act, 1872, if a person pays money that another person is legally obligated to pay to another due to mistake or coercion and the person who paid the money is in his interest, the person who was obliged to pay is entitled to compensation. The payment is considered to have been made under a quasi-contractual obligation. The provisions of this section apply only to payments made bona fide for the protection of one’s interest. It is enough for a person claiming under this section to show that he had an interest in paying the money at the time of payment.

3. Section 70Obligation to restore benefits. As per Section 70 of the Indian Contract Act, 1872, if a person does any awful act from another person or delivers something, not intending to do it free of cost, and another person has enjoyed such benefit, the person who receives the benefit is required to compensate or restore the benefit to the person who has done or delivered something. There are 4 essential conditions to be fulfilled: i. There must be a lawful thing done by the person. ii. The person must do it, not intending to do it gratuitously iii. The person has enjoyed the benefit of it, for whom the thing is done. iv. Section 71: Responsibility of finder of goods. 4. Section 72: Liability of a person to whom money is paid or anything delivered by mistake or under coercion. Section 72 of the Indian Contract Act, 1872, deals with cases when a person has paid money or delivered anything to another person under a mistake or coercion, and that person has received the benefit. The person who has received the benefit is obliged to repay or restore it to the person who made the payment or delivered anything under mistake or coercion. It has been laid down by the Judicial Committee that the word ‘coercion’ used in this section is to be used in its general and ordinary sense, and its meaning is not to be construed as in Section 15 of the Indian Contract Act, 1872. These sections in the Indian Contract Act of 1872 aim to ensure fairness and prevent unjust enrichment in various circumstances where there is no formal contract but a benefit has been conferred or necessaries have been supplied. They provide legal remedies to parties who have been unjustly deprived of their property or money.