The basics of law of contract states that there are certain essential elements
to make it a valid contract. These essential elements are offer, acceptance and
consideration. But there are contracts which are possible without these. These
are known as quasi contracts.
There are certain obligations , particularly specified in the Indian Contract
Act, that are not actually contracts because they miss one or the other
essential elements. These obligations are called Quasi Contractual obligations.
These contracts are though missing one or more essential elements but are still
enforceable in court.
Salmond defines quasi contractual obligations as:
there are certain
obligations which are not in truth contractual in the sense of resting of an
agreement but which the law treats as if they were.
So basically these are the obligations between parties which is not contractual
but treated as contractual but treated contractual by law.
Quasi contracts are actually a result of certain social relationships which give
rise to certain specific obligation. These are contracts which are not founded
on actual promises. A quasi contract is not a true contract, the parties which
are the part of the contract, mostly do not even know each other and are not
familiar at all.
Quasi contracts are based on the principle of Nemo debet locupetari ex aliena
which in layman language mean that:
No man should grow rich out of
other person's loss.
- What is the responsibility of the finder of the goods?
- What is the liability of a person to whom money is paid by mistake or
Quasi contracts come into function when there is no actual contract but social
relationships which create obligations for those people. They are same as normal
contracts in the eyes of the law.
Quasi contractual obligations were identified in the British law but the Indian
contract act defined these as relations relating to contract. Therefore, the
Indian Contract act has a lot in common with the British law. The procedural
term for the same is quantum meruit
Now there are certain situations in which people are expected to be bound by
certain obligations under law, even though he/she may not be at fault and may
not have committed any contract or tort. This rule is applicable in various
situations. For instance, if you enjoy some service even though you did not ask
for it, it is your responsibility to pay it back. Therefore, under these
contracts a person can not enjoy unjust benefits without paying for somebody
else's work or service provided.
Under section 71 of Indian Contract Act 1972, any individual who is a finder of
some good, he/she will be treated as someone who will hold responsibility of the
good for the meantime and he/she will not be having the ownership of the same.
Basically, he will be treated as a bailee. It is his/her instant duty to and
find the actual owner of the goods. The bailee will have certain rights and
obligations as the overseer of the product for now.
This can be better understood with the help of an example. For instance, Ram
found an expensive gold chain which actually belongs to Sham. Here, Ram is the
finder or overseer of the goods. In this case Sham has the option to hold the
ownership of the gold chain against all the people of the world except for Ram.
But, in this case, Ram should be ready to pay for all the work that Sham did in
Now, there are certain obligations at the part of finder of the products:
The finder should make sure that he does not use the object for personal use.
He/ she should make genuine efforts to find the actual owner of the found
object. These and other sensible consideration should be kept in the minds of
Also, there are some exceptions or advantages in the hands of the locater
- The locater has the option to sell the goods in certain conditions for
- If the goods found are perishable and will be wasted if not used in a
limited period of time.
- If the actual owner is not found even after multiple and genuine trials
- If the proprietor is not willing to pay any compensation to the
- The overseer or finder also has in hand the right to hold the products
with himself if the actual owner of the goods is not ready to pay
compensation or remuneration. This is called the right to lien.
- There are some cases in which the locator also has the right to sue.
This is possible only if in case the real owner has reports an award to be
claimed for anyone who finds the goods but later on refuses to give the
Now, Quasi contracts can prove to be a very confusing topic. Many questions can
pop up in a people's mind after reading about quasi contractual obligations.
The most common and the most confusing question is €“ Is there any difference
between contracts and quasi contracts?
The answer is pretty simple.
- The most basic difference between the two is that any contract to be
fulfilled needs an offer, an acceptance, and an agreement as mentioned
earlier. Quasi contracts can lack one or the other elements. Due to this
reason a quasi-contract is also known as a pseudo contract.
- Any simple contract is a right in rem while quasi contracts are right
- Quasi contracts unlike simple contracts are not created by contract but
are imposed by the law itself.
Quasi contracts in the Indian constitution are stated under the Indian contract
act 1872 under section 68 to 72.
There are five types of quasi contractual obligations. They include supply of
necessities(section 68), payment by interested person(section 69), liability to
pay for non-gratuitous act(section 70), finder of goods(section 71) and mistake
of coercion(section 72).
Another query that comes in the minds of the readers is €“ What is the
liability of a person to whom money is paid, or things are delivered by mistake
or under coercion.
Any person who has been paid money by mistake or anything delivered by mistake
or under coercion, must repay or return it as soon as possible and keep it as a
responsibility until it is repaid or returned to the actual owner.
This can be better understood by an illustration.
For instance, there are two people, Mr. Sam and Mr. Smith, who are in a business
partnership. They have to pay a certain amount of money, say Rs. 2 crores to Mr.
Jacob. In a meeting in which only Mr. Sam and Mr. Jacob are present, Mr Sam
transfers the full amount of money that id Rs. 2 crores to Mr. Jacob. Now in
this situation, Mr. Jacob is bound to repay the amount of money given by Mr.
Smith back because the promised amount has already been transferred and the
extra money transferred by Mr. Smith is done by mistake.
Another illustration which can help us know this concept is:
For instance, there is a taxi company and a family hires a taxi from the company
to go to an outstation trip. In between the road trip, the taxi driver asked the
passenger to pay for the petrol but as per the rules of the company, it is the
responsibility of the taxi driver to pay for the petrol. If the family had paid
the money for the petrol filling, it can rightfully ask back for the undue
payment done for the petrol.
This liability of any person to whom money is paid or things are delivered by
mistake comes under section 72 of the Indian Contract Act 1972. It basically
states that any person who is having a belonging of some amount of money or some
object is bound to pay or give it back to the actual owner as soon as possible.
These are the basics of Quasi contracts and its obligations. Sometimes Quasi
contracts are confused with Implied in fact contracts. We now know that quasi
contracts are the ones which lack mutual consent between the parties. On the
other hand, implied in fact contracts are the ones which are even though not
actual contracts but the parties have a mutual consent on the controversial
Implied in fact contracts lack written agreement on the controversial matters.
Bunny, a student of class XII is week in physics and needs some extra tuition
classes for the same. Naina, a high school physics teacher is ready to teach
Now in this situation it is obvious that Naina will teach Bunny physics and in
return Bunny will have to pay some amount of money to Naina for the services
rendered to him. This is an Implied in fact contract.
On the other hand, in a quasi-contract the parties in most cases are not
familiar to each other at all, so mutual consent or understanding is not
Quasi Contracts has had a very interesting history in our country. The
historical agreements of these Quasi Contractual Agreements can be taken back to
the middle ages under a name that was implies back then as 'indebitatus
'. Indebitatus presumption was basically a strategy utilised by the
courts to form one party to pay another as though an agreement hosted between
the two parties.
It is important to note that any contract in its initial stages is an agreement.
In other words it will not be wrong to say that no contract is possible without
an agreement. Therefore, we can say that Quasi contracts are just contracts for
the saying. The only thing which makes it relevant, is that it is enforceable
Quasi contract has been used in many successful cases such as:
- Clay v. Independent School Dist. No. 1 of Tulsa County, 935 P.2d 294 (Okl.
- Bloomgarden v. Coyer 479 F.2d 201 (D.C. Cir. 1973).
- Moses v. Macferlan , 97 Eng. Rep. 676 (2 Burr. 1005)
- Sinclair v. Brougham  AC 398
- Fibrosa Spolka Akeyjna v. Fairbairn Lawson combe Barbour Ltd. UKHL 4,,
AC 32,, 2 All ER 122
At last, we can conclude that an agreement has certain components such as offer
and its acknowledgement that gives rise to an agreement. So, agreement is
basically the event that turns lawfully enforceable, that is it very well may
now be dealt in an official courtroom in front of both the gatherings in
However there are some circumstances where even without an understanding
accordingly, either party is obliged to perform something. Such commitment are
called Quasi Contracts. Chapter V of the Indian Contract Act 1872 deals with