LLB SEM 1

1. Quasi Contracts
LLB I
BPOC
UNIT 3
BUSINESS LEGISLATION

2. Quasi contracts
• Quasi means ‘almost’ or ‘apparently but
not really’ or ‘as if it were’
• Obligation between parties is not
contractual but one which is treated as
contractual by law
• Courts create quasi contracts to protect
the unjust enrichment of the parties in
dispute over payment of goods or
services

3. Difference between contract
and quasi contract
ContraCt
• Results from the will of
the parties expressed
with a view to create an
obligation
• Is an agreement
• Has certain essential
elements
• Is a full fledged contract
and is binding
Quasi
ContraCt
• Is an obligation
resembling that created
by a contract
• There is no agreement at
all
• Essentials for formation
of a contract are absent
• Resembles a contract.
not a full fledged contract.
is an implied contract

4. Types of Quasi contracts:
1. Supply of necessities (Sec.68)
2. Payment by an interested person
(Sec.69)
3. Obligation to pay for non gratuitous act
(Sec.70)
4. Responsibility of finder of goods (Sec.71)
5. Mistake or Coercion (Sec.72)

5. Section 68
“Claim for supply of necessaries to person incapable of
contracting”
Necessaries:
Things suited to the conditions of incompetent parties
Includes articles required to maintain a particular person in
the state and degree in the life in which he is
Articles without which an individual cannot reasonable exist
Illustration
 A supplies B, lunatic with necessaries suitable to his condition of life. is entitled to
be reimbursed from B’s property
 A minor studying at Cambridge was supplied with clothing, including eleven
waist-wats. He already had sufficient clothing with him. It was held that the
waist-wats were not necessary articles and so he was not liable to pay for them.

6. Section 69
“Reimbursement of money paid, in which he is interested”
Essentials:
 There must be a person who is bound to make a payment by law.
The person paying must himself not be bound to pay. When he is
jointly liable to pay, payment by him would not give him the right to
recover under this section
Illustration
A and B have been fined jointly Rs500 for selling adulterated ghee. A alone pays the amount
of fine in good faith, A cannot later claim contribution from B under Section 69. Notice that
although B was bound by law to pay and A has paid B’s share in good faith, yet A cannot
recover as he himself was bound to make the payment, being jointly liable with B and was
not simply interested in making the payment.

7. Section 70
“Obligation of a person enjoying benefits of non-gratuitous act”
• Person lawfully does anything for another person
• Delivers anything to him non-gratuitously
• Latter is bound to make compensation or restore the thing so
done or delivered
• The thing must be done lawfully
• The person for whom the act is done must enjoy the benefit of it.
 A, a tradesman, leaves goods at B’s house by mistake. B treats the goods his
own. He is bound to pay for them
 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.
Illustration

8. Section 71:
“ responsibility of finder of goods”
His rights:
• Entitled to retain the goods until he receives the
lawful charges or compensation for retaining
the goods and taking care of them.
•However, he cannot sue for such compensation
unless a specified reward has been advertised by the
owner.
• Entitled to possess the goods until the true owner is
found
•Can sell the goods when:
 Commodity is perishable
 Owner cannot be found
 Owner refuses to pay compensation
 Compensation amounts to 2/3rd
of the value of
the commodity

9. His liabilities:
• Responsible to take care of the goods as if they
were his own
• Must with reasonable diligence trace the true
owner

10. Section 72:
“Liabilities of a person to whom money is paid or thing
delivered by mistake or under coercion”
A person to whom money has been paid, or anything delivered
by mistake or under coercion, must repay or return it.
Illustration:
•A and B jointly owe Rs.100 to C. A alone pays the amount.
B not knowing it also pays to C. C is bound to repay the
amount to B.
•A railway co. refuses to deliver certain goods to the
consignee, except upon the payment of illegal charge for
carriage. The consignee pays the sum charged in order to
obtain the goods. He is entitled to receive the excessive
amount as paid by him.

11. References
Mercantile Law N.D.Kapoor,
Sultan Chand and Sons.
http://www.slideshare.net/C
MVerma/quasi-contracts-
business-law

12. THANK YOU