QUASI CONTRACT [Sec. 68 to 72]
A Quasi-contract is not a contract at all because one or the other essentials for the formation of a contract are absent.
The term “Quasi” is a Latin word, which means “as if” or “Similarly”. It means seemingly, apparently, but not really.
Chapter V containing Sections 68 to 72 of the Indian Contract Act lays down provisions relating to Quasi Contracts
although this term has not been used as such rather these transactions have been recognised as “Certain relations
resembling those created by contracts”. These are contracts implied in law as implied contracts. It means a contract
which lacks one or more of the essentials of a contract. Quasi contract are declared by law as valid contracts on the
basis of principles of equity and the doctrine of unjust enrichment i.e. no person shall be allowed to enrich himself
unjustly at the expense/cost of another & the legal obligations of parties remains the same as that in a contract. This
concept was propounded in the case of Moses v. Mc Furlong by Lord Mansfield.
Nature of Quasi contracts-
A quasi contract does not arise from any formal agreement but is imposed by law.
Every quasi contract is based upon the principle of equity and good conscience.
A quasi contract is always a right to money and generally though not always to a liquidated sum of
money.
A suit for its breach may be filed in the same way as in case of a complete contract.
The right granted to a party under a quasi contract is not available to him against the whole world
but against particular person(s) only.
A suit for breach of a quasi contract may be filed in the same way as in case of an ordinary
contract
Although there is no express or implied contract between the parties under a quasi contracts yet they
are put in the same position as if there is a contract between them.
PROVISIONS RELATING TO VARIOUS QUASI CONTRACTS ARE CONTAINED UNDER SECTIONS 68 TO SEC
72 OF CONTRACT ACT, 1872
1. Sec. 68: Supply of necessaries to a person not competent to contract
If a person, incapable of entering into a contract, or anyone whom he is legally bound to support, is supplied by another
person, 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.
Only the property of the incapable person is liable for reimbursement, not the person himself for the obvious reason
that he is incompetent to contract. Where he doesn’t own any property, nothing shall be payable. There is no
definition of the term ‘necessaries’. What constitutes necessaries is a question of fact and depends upon the facts
and circumstances of the case. Moreover, what is luxury to one person may be a necessity to another.
Example: A supplies B, a lunatic, with necessaries suitable to his condition in life. A is entitled to be reimbursed from
B’s property.
Landmark case: Nash v. Inmann (1908)
Khangul v. Lakhha
, 2. Sec. 69: Reimbursement i.e. right to recover money paid for another person.
Payment by a person who is interested in such payment is recoverable as an equitable right. A person, who is interested
in the payment of money and pays such money, which another is bound by law to pay, is entitled to be reimbursed by
the other.
3. Sec. 70: Obligation of person enjoying benefit of non-gratuitous act.
Where 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 benefits thereof then he is bound to make compensation to the other in
respect of, or to restore the thing so done or delivered.
Example 1: A, a tradesman, leaves goods at B’s house by mistake. B treats the goods as his own. He is bound to pay A
for them.
Example 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.
Section 70 corresponds to what in England is called “Actions for Quantum Meruit” which means ‘as much as is
deserved’.
4. Sec. 71: Responsibility of finder of goods.
A person who finds goods belonging to another and takes them into custody, is subject to the same responsibility as
that of a bailee i.e. duty to take reasonable care of the goods, duty not to use the goods for his own purpose, duty not to
mix the goods with own goods, right to recover reasonable expenses, reward, or even to sell the goods lawfully.
Finder’s right to sell: Under Sec. 169, the finder of goods has the power to sell them when-
a) The owner of the goods cannot with reasonable diligence be found, or he refuses, upon demand,
to pay the lawful charges of the finder, and
b) Either the thing found is in danger of perishing or of losing the greater part of its value, or, in
case the goods are not of perishable nature, but the lawful charges of the finder, in respectof the
thing found, amount to two-thirds of its value.
5. Sec.72: Money paid under a mistake or coercion.
A person to whom money has been paid, or anything delivered by mistake or under coercion, must repay or return it.
Compensation for failure to discharge obligation created by quasi contract [Section 73]
When an obligation created by quasi contract is not discharged the injured party is entitled to reline the same
compensation from the party in default as if such person had, contracted to discharge is and broken his contract.
, DISCHARGE OF CONTRACT
Discharge of a contract means termination of the contractual relations between the parties to a contract. When the rights and
obligations arising out of a contract are extinguished, the contract is said to be discharged or terminated. Simply put, when
both the parties are legally discharged or relaxed from performing their part of the promises in a particular contract, the
contract is said to have been discharged.
A contract may be discharged by any of the following ways:
By performance– Actual or Attempted.
By mutual consent or agreement.
By subsequent or supervening impossibility or illegality.
By lapse of time.
By operation of law.
By breach of contract.
I. DISCHARGE BY PERFORMANCE- Performance of a contract is the most popular manner of
discharge of a contract. The performance may be either actual performance or attempted performance.
i. Actual performance: When each party fulfils his obligations arising out of the contract within
the time and in a manner prescribed, it is called the actual performance and the contract comes to
an end.
ii. Attempted performance or Tender: When the promisor offers to perform his obligation, but is
unable to do so because the promise does not accept the performance, it is called “Attempted
Performance” or “tender”. Thus tender is not actual performance but is only an offer to perform
the obligation under the contract. A valid tender of performance is equivalent to
performance.
II. DISCHARGE BY MUTUAL CONSENT OR AGREEMENT (SEC. 62)- A contract is created by
means of an agreement, it may also be discharged by another agreement between the same parties.
i. Novation: “Novation” occurs when a new contract is substituted for an existing contract, either
between the same parties or between different parties, the consideration mutually being the
discharge of the old contract.” If the parties are same, then small changes in the terms of contract
is called “alteration” and not “novation”. For being “Novation”, the changes must be of
significant nature.
ii. Alteration: It means that change of one or more of the material terms of a contract. A material
alteration is one which alters the legal effect of the contract. e.g. change in the amount of money,
change in the rate of interest etc. Note that a material alteration made in a contract by one party
without the consent of the other will make the whole contract void and no person can maintain
an action upon it.
iii. Rescission: A contract may be discharged before the date of performance, by agreement
between the parties to the effect that it shall no longer bind them. Such an agreement amounts to
“Rescission” or cancellation of the contract, the consideration being the abandonment by
the respective parties of their rights under the contract. If there is non- performance of a contract
A Quasi-contract is not a contract at all because one or the other essentials for the formation of a contract are absent.
The term “Quasi” is a Latin word, which means “as if” or “Similarly”. It means seemingly, apparently, but not really.
Chapter V containing Sections 68 to 72 of the Indian Contract Act lays down provisions relating to Quasi Contracts
although this term has not been used as such rather these transactions have been recognised as “Certain relations
resembling those created by contracts”. These are contracts implied in law as implied contracts. It means a contract
which lacks one or more of the essentials of a contract. Quasi contract are declared by law as valid contracts on the
basis of principles of equity and the doctrine of unjust enrichment i.e. no person shall be allowed to enrich himself
unjustly at the expense/cost of another & the legal obligations of parties remains the same as that in a contract. This
concept was propounded in the case of Moses v. Mc Furlong by Lord Mansfield.
Nature of Quasi contracts-
A quasi contract does not arise from any formal agreement but is imposed by law.
Every quasi contract is based upon the principle of equity and good conscience.
A quasi contract is always a right to money and generally though not always to a liquidated sum of
money.
A suit for its breach may be filed in the same way as in case of a complete contract.
The right granted to a party under a quasi contract is not available to him against the whole world
but against particular person(s) only.
A suit for breach of a quasi contract may be filed in the same way as in case of an ordinary
contract
Although there is no express or implied contract between the parties under a quasi contracts yet they
are put in the same position as if there is a contract between them.
PROVISIONS RELATING TO VARIOUS QUASI CONTRACTS ARE CONTAINED UNDER SECTIONS 68 TO SEC
72 OF CONTRACT ACT, 1872
1. Sec. 68: Supply of necessaries to a person not competent to contract
If a person, incapable of entering into a contract, or anyone whom he is legally bound to support, is supplied by another
person, 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.
Only the property of the incapable person is liable for reimbursement, not the person himself for the obvious reason
that he is incompetent to contract. Where he doesn’t own any property, nothing shall be payable. There is no
definition of the term ‘necessaries’. What constitutes necessaries is a question of fact and depends upon the facts
and circumstances of the case. Moreover, what is luxury to one person may be a necessity to another.
Example: A supplies B, a lunatic, with necessaries suitable to his condition in life. A is entitled to be reimbursed from
B’s property.
Landmark case: Nash v. Inmann (1908)
Khangul v. Lakhha
, 2. Sec. 69: Reimbursement i.e. right to recover money paid for another person.
Payment by a person who is interested in such payment is recoverable as an equitable right. A person, who is interested
in the payment of money and pays such money, which another is bound by law to pay, is entitled to be reimbursed by
the other.
3. Sec. 70: Obligation of person enjoying benefit of non-gratuitous act.
Where 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 benefits thereof then he is bound to make compensation to the other in
respect of, or to restore the thing so done or delivered.
Example 1: A, a tradesman, leaves goods at B’s house by mistake. B treats the goods as his own. He is bound to pay A
for them.
Example 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.
Section 70 corresponds to what in England is called “Actions for Quantum Meruit” which means ‘as much as is
deserved’.
4. Sec. 71: Responsibility of finder of goods.
A person who finds goods belonging to another and takes them into custody, is subject to the same responsibility as
that of a bailee i.e. duty to take reasonable care of the goods, duty not to use the goods for his own purpose, duty not to
mix the goods with own goods, right to recover reasonable expenses, reward, or even to sell the goods lawfully.
Finder’s right to sell: Under Sec. 169, the finder of goods has the power to sell them when-
a) The owner of the goods cannot with reasonable diligence be found, or he refuses, upon demand,
to pay the lawful charges of the finder, and
b) Either the thing found is in danger of perishing or of losing the greater part of its value, or, in
case the goods are not of perishable nature, but the lawful charges of the finder, in respectof the
thing found, amount to two-thirds of its value.
5. Sec.72: Money paid under a mistake or coercion.
A person to whom money has been paid, or anything delivered by mistake or under coercion, must repay or return it.
Compensation for failure to discharge obligation created by quasi contract [Section 73]
When an obligation created by quasi contract is not discharged the injured party is entitled to reline the same
compensation from the party in default as if such person had, contracted to discharge is and broken his contract.
, DISCHARGE OF CONTRACT
Discharge of a contract means termination of the contractual relations between the parties to a contract. When the rights and
obligations arising out of a contract are extinguished, the contract is said to be discharged or terminated. Simply put, when
both the parties are legally discharged or relaxed from performing their part of the promises in a particular contract, the
contract is said to have been discharged.
A contract may be discharged by any of the following ways:
By performance– Actual or Attempted.
By mutual consent or agreement.
By subsequent or supervening impossibility or illegality.
By lapse of time.
By operation of law.
By breach of contract.
I. DISCHARGE BY PERFORMANCE- Performance of a contract is the most popular manner of
discharge of a contract. The performance may be either actual performance or attempted performance.
i. Actual performance: When each party fulfils his obligations arising out of the contract within
the time and in a manner prescribed, it is called the actual performance and the contract comes to
an end.
ii. Attempted performance or Tender: When the promisor offers to perform his obligation, but is
unable to do so because the promise does not accept the performance, it is called “Attempted
Performance” or “tender”. Thus tender is not actual performance but is only an offer to perform
the obligation under the contract. A valid tender of performance is equivalent to
performance.
II. DISCHARGE BY MUTUAL CONSENT OR AGREEMENT (SEC. 62)- A contract is created by
means of an agreement, it may also be discharged by another agreement between the same parties.
i. Novation: “Novation” occurs when a new contract is substituted for an existing contract, either
between the same parties or between different parties, the consideration mutually being the
discharge of the old contract.” If the parties are same, then small changes in the terms of contract
is called “alteration” and not “novation”. For being “Novation”, the changes must be of
significant nature.
ii. Alteration: It means that change of one or more of the material terms of a contract. A material
alteration is one which alters the legal effect of the contract. e.g. change in the amount of money,
change in the rate of interest etc. Note that a material alteration made in a contract by one party
without the consent of the other will make the whole contract void and no person can maintain
an action upon it.
iii. Rescission: A contract may be discharged before the date of performance, by agreement
between the parties to the effect that it shall no longer bind them. Such an agreement amounts to
“Rescission” or cancellation of the contract, the consideration being the abandonment by
the respective parties of their rights under the contract. If there is non- performance of a contract
