Quasi Contract / Quasi Ex Contractu /

A quasi contract is not a contract in the true sense — there is no agreement, no offer and acceptance, and no meeting of minds. Rather, it is a legal obligation imposed by courts (and codified in the ICA) to prevent one party from being unjustly enriched at the expense of another, when no contractual relationship exists between them. The theoretical basis is restitution — restoring to a party the value of a benefit they have conferred on another without intending to do so gratuitously, and from which the other party has derived a benefit.

The ICA, 1872, Chapter V (Sections 68-72) codifies five categories of quasi-contractual obligations: (1) Section 68 — Claim for necessaries supplied to a person incapable of contracting: a person who supplies necessaries of life to a minor or a person of unsound mind can recover their value from the minor's property (not from the minor personally); (2) Section 69 — Reimbursement of person paying another's debt: a person who pays money that another person is bound to pay, and who has an interest in the payment, is entitled to be reimbursed by the other; (3) Section 70 — Obligation to pay for non-gratuitous acts: where a person lawfully does something for another without intending to do so gratuitously, and the other person benefits, the latter must compensate; (4) Section 71 — Responsibility of finder of goods: the finder of lost goods has the duties of a bailee; and (5) Section 72 — Liability of person to whom money is paid by mistake: money paid by mistake must be repaid.

The principle underlying quasi contracts is unjust enrichment — the Roman law doctrine of 'nemo locupletari debet cum aliena jactura' (no one should be enriched by another's loss). Indian courts apply this principle both through the ICA quasi-contract provisions and through the general equitable jurisdiction to prevent unjust enrichment. The principle has been extended beyond the specific provisions of Section 68-72 to cover situations not expressly addressed by the Code — where one party has conferred a clear benefit on another in circumstances where it would be unconscionable to retain it without payment.

Quasi contracts are particularly important in public law — where contracts with the government may be void for failure to comply with the formalities required by Article 299 of the Constitution (execution in the name of the President or Governor, signed by an authorised officer). Even where a government contract is void under Article 299, the contractor can claim compensation under Section 70 ICA for benefits conferred on the government — preventing the State from profiting from its own failure to comply with Article 299 formalities.

For advocates, quasi-contract claims are appropriate where: (1) no valid contract exists (void contract, informal agreement, or lack of capacity on one side) but one party has conferred a benefit on the other; (2) a contract has been frustrated or discharged, leaving one party having performed work; (3) money has been paid under a mistake of fact or law (Section 72); or (4) a person has paid another's legal obligation (Section 69) and seeks reimbursement. The measure of recovery is the reasonable value of the benefit conferred — not the contract price under any failed contract.