Quasi Contracts

 Quasi Contracts

The English law was the first to recognise the duty flowing from a quasi-contract. The Indian Contract Act of 1872 incorporates the same components as the English Contract Act. In the Indian Contract Act, there is no definition for a quasi-contract. However, the Act notes that when a quasi-contract is formed, some relationships are formed that are extremely similar to contracts. However, even if there is no formal contract, a quasi-contract may be characterised as a collection of rights and obligations between the parties. The law imposes this responsibility on the parties to ensure justice and fairness. The law prohibits one person from enriching themselves at the expense of another. If no rights or duties are established, one party would be unjustly enriched. Going by this, it can be said that a quasi-contract is kind of a remedy instead of being a pure contract. Formation of a quasi-contract allows the aggrieved party to recover the benefit which the enriched party has taken at his expense. Since a quasi-contract is a law made by law, there is no statement of consent between the parties. The obligation and rights which are placed on the shoulder of the parties are rather by law than by assent.

For instance, X forgets c=some goods at Y’s place. Y’s is under a legal obligation to restore the goods to Y. this goes on to show that Y cannot enrich himself at the expense of X. such kind of obligations are described as Quasi-contractual Obligation. They are not actual contract in which the parties agree to enter, but are fictional agreements which are created between the parties by law so as to ensure equity.

In quasi-contracts the liability imposed is based on the doctrine of unjust enrichment. Quasi-contact is applied with regards to payment of services rendered or goods delivered or used. In such situations, the main question which arises is the liability of the person who got enriched. Since the basic concept of a quasi-contract is to prevent unjust enrichment, the liability of the enriched party is limited to the value of services rendered or cost of the goods used or delivered. Thus, the liability is limited to the amount of benefit only.

The lack of mutual consent between the parties is one of the primary characteristics of a quasi-contract. The terms "quasi-contracts" and "implied-in-fact contracts" are frequently interchanged (or implied contract). The distinction between a quasi-contract and an implied contract is that in the case of an implied contract, the parties' acts and behaviour suggest that they have mutually agreed to enter into a contract even though there is no formal statement to that effect.

For example, P goes to a restaurant for a dinner. The owner of the restaurant expects that P will pay for his food. P also knows that he’ll have to pay for the food which will be provided to him. Thus, the actions of the parties signify that they’ve mutually agreed to enter into an agreement, even though the agreement is not a written one.

Quasi-contracts follow the principle of unjust enrichment, which came from the Roman Maxim, “nemo debet locule tari ex aliena jactura“ which in simple language means that no man must grow rich because of one’s personal loss.

Quasi-Contracts falls under Chapter V of the Indian Contracts Act, 1872[3] under the heading “Of certain relations resembling those created by contract.” Although the word “quasi-contacts” is not expressly mentioned, it can be interpreted that the framers of the statute pointed towards the concept of quasi-contract and doctrine of unjust enrichment only. In the case of Hari Ram Seth Khandsari v Commissioner of Sales Tax,[4] The Court also agreed to the fact that, although the term has been avoided in this chapter, this chapter is about the doctrine of quasi-contracts.