Define quasi contract is not a true contract because it lacks essentials such as offer, acceptance, and consent. Instead, it is a legal obligation created by the court to prevent unjust enrichment. In simple words, if one person benefits unfairly at the expense of another, the law treats the situation as if a contract existed between them.
For example, if you accidentally pay someone money that you do not owe, the law requires that person to return it. Even though no contract was made, fairness demands restitution.
Legal Basis in India
The concept of quasi contracts is recognized under the Indian Contract Act, 1872 in Sections 68 to 72. These provisions cover different scenarios where obligations are created by law:
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Section 68 – Necessaries supplied to incapable persons
If necessities are provided to a minor or someone mentally incapacitated, the supplier can recover expenses from the property of that person. -
Section 69 – Payment by an interested person
When a person pays money on behalf of another to protect their own interest, they can seek reimbursement. -
Section 70 – Obligation to pay for non-gratuitous acts
If one person lawfully does something for another without intending it as a gift, and the other person enjoys the benefit, payment must be made. -
Section 71 – Finder of goods
A person who finds lost goods has the responsibilities of a bailee and must take reasonable care of them until the true owner is found. -
Section 72 – Mistake or coercion
If money or goods are delivered under mistake or coercion, they must be returned.
Key Characteristics
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Imposed by law: Courts create these obligations to achieve justice.
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No mutual agreement: Unlike a true contract, consent is absent.
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Aim is fairness: Prevents unjust gain at the expense of another.
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Enforceable in court: Rights and duties created are legally binding.
Importance of Quasi Contracts in Business
Quasi contracts are especially significant in business dealings. They ensure that companies and individuals cannot exploit others by retaining benefits without compensation. For example, if a supplier mistakenly delivers goods and the recipient uses them, payment is legally due, even if no formal agreement was signed.
These provisions promote fairness and accountability in commercial activities, protecting both individuals and businesses from losses caused by mistakes, incapacity, or unfair advantage.
Conclusion
A quasi contract is a unique concept in business law that ensures justice in situations where no formal contract exists. By imposing legal duties, it prevents one party from being unfairly enriched at another's expense. In India, Sections 68 to 72 of the Contract Act outline specific situations covered under quasi contracts.
For businesses and individuals alike, understanding quasi contracts is crucial. They remind us that fairness and equity form the backbone of legal systems, ensuring that even in the absence of agreement, the law steps in to protect rights and impose duties.
