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Quasi contracts

A quasi contract is a legal obligation imposed by law to prevent unjust enrichment, where one party benefits at the expense of another without a formal agreement. It is based on principles of natural law and equity, and can arise in various situations such as reimbursement for necessities or payment for non-gratuitous acts. While quasi contracts provide a remedy for disputes, they have limitations, including restrictions on recovery amounts and conditions under which benefits were received.

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14 views

Quasi contracts

A quasi contract is a legal obligation imposed by law to prevent unjust enrichment, where one party benefits at the expense of another without a formal agreement. It is based on principles of natural law and equity, and can arise in various situations such as reimbursement for necessities or payment for non-gratuitous acts. While quasi contracts provide a remedy for disputes, they have limitations, including restrictions on recovery amounts and conditions under which benefits were received.

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Janhvi
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Quasi

Contract
Dr. Aarti A. Tayde
What Is a Quasi Contract?

 Quasi Contract laws have been derived from the Latin statement “Nemo debet locupletari ex aliena jactura” which
proclaims that no human being should gain an unjust benefit from another’s loss. It was one of the main principles
of Roman law.
 The word ‘Quasi’ means having some resemblance to but not all. Similarly, Quasi Contract means laws that are like
regular contract law but not quite so. A regular contract should have some essential components to be considered
valid. It includes offers, acceptance, consideration, two or more parties who are legally and mentally capable etc.
 Whereas Quasi-contract definition is based more on the principles of natural law such as moral conscience, justice,
honesty, duty towards another human being etc.
 The main difference between Contract and Quasi Contract is that in the case of the latter, there is no exchange of
offer, acceptance, or consideration between two or more parties. However, it is still legally enforceable.
 For example, if a package belonging to A is delivered to M, then M is legally obligated to return it to A. If M uses
up the contents of the packaging for himself, then A has the right to sue him. In that case, the court can order M to
reimburse A under Quasi-contract law.
 Quasi contract is another name for a contract implied in law, which acts as a remedy for a dispute between two
parties that don't have a contract. A quasi contract is a legal obligation—not a traditional contract—which is decided
by a judge for one party to compensate the other. Thus, a quasi contract is a retroactive judgment to correct a
circumstance in which one party acquires something at the expense of the other.
Key features

 Imposed by law and does not arise from contract


 Obligation impose by law
 Arise form duties of parties not from promises
 Right in personam
 Rest on principle of equity
 Right calculated in money
 Remedy in form of breach of contract
Types of Quasi Contracts

 Claim for necessaries supplied


 Reimbursement of money due by another
 Liability to pay for non-gratuitous act
 Responsibilities of finder of goods
 Money paid or things delivered by mistake or under coercion
Supply of Necessities

 An individual who is legally incapable of entering into any agreement,


or if the person is unable to support themselves, then another
individual who is legally responsible for supporting the former, then
the latter will be reimbursed from the estate of the dependent.
 Instances of Quasi-contract cases include,
 If C supports the family member of his friend D, who is mentally
incompetent, then C should be provided with reimbursement from D’s
property.
Payment by an Interested Party

 Under Quasi-contract in business law, if any individual wishes to


make payment of money which the other party is legally bound to
pay and who eventually bears the cost, shall receive retribution from
the latter.

 For Instance, if person A pays off B’s outstanding debt, then the latter
must reimburse A under Quasi-contract law.
Obligation to Pay for a Non-Gratuitous Act

 In circumstances, when a person performs an act for another which


he or she is legally bound to do and which is not performed out of
gratitude, then the person for whom it is being done must
compensate the former.

 For Instance, if a shopkeeper delivers some goods to B’s house, then


B is bound to pay the shopkeeper for services performed. However, if
the shopkeeper returns goods that B had forgotten, then B is not
liable to compensate him or her as it was an act of gratuity.
Finder of Goods

 A person who comes across any item belonging to another individual,


and takes it under his custody, then he or she must take proper care
of the thing as much as he or she would take care of an item of the
same value, bulk, and quality until the appropriate owner is found.
 If the owner is not found, then the finder can retain the item as their
own according to Quasi-Contract. It wont be considered as
misappropriation of property
A mistake or Coercion

 Section 71 of contract law states that an individual who receives any


item by mistake or through coercion is legally bound to return the
items or repay the person who initially made the payments.
 For example - if a parcel is delivered belonging to B, is delivered to A,
then A must return it to B promptly, as the delivery was caused by
mistake
Unjust Enrichment

 One of the main features of Quasi-contract is unjust enrichment. In the case of unjust
enrichment, one party derives benefits either by mistake or through the other party’s
misfortune or loss.
 Additionally, when an individual enjoys advantages for which he or she has made proper
payments or has not worked for it, and which was not intended as a gift, then it is also
termed as unjust enrichment. However, courts consider several other aspects while deciding
whether an unfair enrichment has taken place or not under Quasi-contract in the Indian
contract Act. These elements are mentioned below:
• The defendant must have received benefits or advantages to which he or she is not entitled
to.
• The plaintiff should have sustained loss or damage of some kind when the defendant
received unjust enrichment.
• The court also needs to prove that the enrichments or benefits in question are unfair to
create a Quasi-contract.
• There should be no proper explanation for enrichment. Additionally, the plaintiff also needs to
justify why it is unfair for the defendant to be in possession of the goods without paying for
them.
Remedy

 Itwould be handed down ordering the defendant to pay


restitution to the plaintiff. The restitution, known in
Latin as quantum meruit, or the amount deserved, is
calculated according to the amount or extent to which
the defendant was unjustly enriched
 quantum meruit is a reasonable sum of money to be paid
for services rendered or work done when the amount due
is not stipulated in a legally enforceable contract.
Purpose
 Quasi contracts outline the obligation of one party to a second
when the first receives a benefit or property from the second. A
person might knowingly or unknowingly give something of value
to another without an agreement being made. It is assumed that a
reasonable person would pay for it, give it back, or otherwise
compensate the giver upon receiving the item or service.
 Quasi contracts are awarded as a remedy to a giver to keep them
from being taken advantage of and keep others from being
unjustly enriched.
Advantages and Disadvantages of Quasi
Contracts
 Advantages of using a quasi contract include the fact that these legal instruments are typically
based on the unjust enrichment principle. This prevents one party from gaining an undue
advantage over another. Thus, it is a safeguard for innocent victims of wrongful acts and a legal
alternative to compensation for damages, ensuring that the one who provides services or
goods gets compensated for the same. In order to comply with quasi contracts, all parties
involved are obliged to follow them, as they are created by court order.
 There are also some drawbacks or limitations. Those who received benefits negligently,
unnecessarily, and by miscount will not be held liable. Although a person can be liable under a
quasi contract, he cannot be charged more than the amount he has received under the
contract. Thus, there is no provision available for the recovery of more amount than that which
has been received by the plaintiff - if the plaintiff obtains only part of the services/goods that
he contracted for originally, he cannot claim a compensation as the whole amount is not
recovered.
 If there's an express agreement between the parties, plaintiffs have to give up all profits.
Though a quasi contract is a legal remedy that provides protection from unjust enrichment of
the beneficiaries of the services or goods, a plaintiff can get relief only if he can prove that he
has suffered losses due to the breach of the contractual obligations of the defendant.

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