Quasi-Contracts v Contracts

Forums The Indian Contract Act, 1872 Quasi-Contracts v Contracts

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  • #3487
    leaglesamiksha
    Keymaster

    Chapter V of the Indian Contracts Act enlists certain relations that resemble contracts. Under English law, these are known as Quasi-contracts. Ques: How are quasi-contracts different from contracts? Why are they enforceable?

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    • #3488
      Intern
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      The Indian contracts act 1872, defines Contract in section 2(h) as ” Agreements enforceable by law are contracts” and sections 68-72 constitute situations under the Quasi-contracts.
      General Contracts are entered into by interested parties voluntarily without any compulsion, whereas quasi-contracts are imposed by law.
      General Contracts can be both rights in Rem (against the whole world) and rights in Personam (against any one person or entity),whereas quasi-contracts are only rights in Personam , these are only available against a specific person i.e., right in personam.
      For making of a contract, liability exists according to the terms mentioned and agreed upon by both the parties, whereas under quasi-contract, the liability comes into existence through the conduct of the parties and is based on morality, natural justice, equity, and a good conscience.
      Quasi-contract is not an actual contract though it is still enforced by law .It is based on the latin maxim “Nemo debet locupletari ex aliena jactura” which means, nobody should be benefited at the cost of another, or nobody should be enriched at the cost of another’s loss.
      For example- A ordered a pizza from B, that is wrongly delivered to C and he doesn’t correct the delivery boy and keeps the pizza.Here, quasi-contract arises and C will be required to pay back the amount of pizza to A.
      There is no prior agreement, offer and acceptance in a Quasi contract. Quasi contract is enforced when any person enjoys the benefit of something but refuses to pay or compensate for it or the other person might have to bear the burden of it.
      To avoid unjust enrichment of one party from the loss of the other party, quasi-contract arises as an obligation by the law and hence it is enforceable by law.

    • #3489
      Intern
      Participant

      Quasi Contracts are pseudo contracts. They are not entered into by the parties involved. Therefore, the essential elements of a valid contract are absent in cases of quasi contracts.
      Essentially, there is no offer, acceptance, consideration, free consent, etc. in quasi contracts. Section 68-72 of the Indian Contract Act, 1872 deal with such contracts.
      Section 68 talks about reimbursement from a person’s estate who is incompetent contract to another person who supplies him (and others whom he is legally bound to support) with necessities. Such incompetent persons include minors and lunatics.
      Section 69 deals with reimbursement to the interested party if he pays another’s debt. E.g. – A tenant paying the landlord’s debt to save his leased land from being auctioned.
      According to section 70, a person enjoying the benefits of a non-gratuitous act is obliged to compensate for it to the person who delivered it unintentionally.
      Similarly, sections 71 and 72 deal with the finder of lost goods and delivery by mistake or under coercion respectively.
      The fact of the matter is that in all the above cases, there was no real agreement between the parties initially. The liabilities were set up following the parties’ conduct. Such obligations are established by quasi contracts.
       The reason why they are enforceable is that the obligation involved is treated as contractual by law. They are established by the courts on the grounds of equity and enforced to reimburse the persons providing benefits to another. In the above cases, where a delivery was made by mistake, or where a finder of a lost good spent some money in order to take care of the good, one party suffered some loss. The intention on part of the court is to make good of the loss to the party or to protect the unjust enrichment of a party in case of payment-related dispute between them.

    • #3490
      Intern
      Participant

      A contract is a real agreement between two or more parties, but a Quasi-contract is not an agreement but resembles an agreement or a contract.
      • Under a contract, both parties give their consents freely, but in case of quasi-contract, there is no consent of either of the parties, it is an involuntarily made contract.
      • Under a contract, liability exists according to the terms mentioned and agreed upon by both the parties, whereas under quasi-contract, the liability comes into existence through the conduct of the parties and is based on morality, natural justice, equity, and a good conscience.
      • General Contracts are entered into by interested parties voluntarily without any compulsion, whereas quasi-contracts are imposed by law.
      • General Contracts can be both rights in Rem (against the whole world) and rights in Personam (against any one person or entity). But quasi-contracts are only rights in Personam, these are only available against a specific person.
      • The Indian contracts act 1872 as a whole, encompasses everything about all kinds of contracts. A contract is defined in section 2(h) and sections 68-72 constitute all the information about Quasi-contracts.

      Quasi contract is made when an agreement is imposed by law through a judge as a remedy when Person A owes something to Person B because they come into possession of Person A’s property indirectly or by mistake. The contract becomes enforceable if Person B decides to keep the item in question without paying for it.
      For example, if a door-to-door product selling person leaves a product at someone’s place, by mistake, and the person in whose house the product is left uses it or doesn’t want to return it to the salesperson, then they have entered into a quasi-contract and the person will have to pay for the product to the salesperson.

    • #3491
      Intern
      Participant

      In Indian Contract Act Contract is an agreement between two or more parties creating obligations that are enforceable recognizable at law and Quasi agreements depend on the term of “Nemo debet locupletari ex aliena jactura”, which infers that no man ought to develop rich out of someone else’s misfortune. Thusly, obligation on account of semi authoritative duties depends on the guideline of ‘crooked improvement’. Quasi agreement essentially implies that no individual should get shamefully improved at the expense of another person’s misfortune. That implies no individual should acquire anything unjustifiably when his acquiring something like this may mean a misfortune for another person.
      Thusly, obligation on account of quasi authoritative duties depends on the guideline of ‘crooked improvement’. Quasi agreement essentially implies that no individual should get shamefully improved at the expense of another person’s misfortune. That implies no individual should acquire anything unjustifiably when his acquiring something like this may mean a misfortune for another person.
      Under a contract, liability exists consistent with the terms mentioned and arranged by each the parties, whereas underneath quasi-contract, the liability comes into existence through the conduct of the parties and relies on morality, natural justice, equity, and an honest conscience.
      General Contracts can be the two rights in Rem and rights in Personam .Yet,Quasi agreements are just rights in Personam, these are just accessible against a particular individual.

    • #3492
      Intern
      Participant

      A contract is a real agreement between two or more parties, but a Quasi-contract is not an agreement but resembles an agreement or a contract. Under a contract, both parties give their consents freely, while under quasi-contract, there is no consent of either of the parties, as it is not voluntarily made. Quasi contracts are legally enforceable because the agreement is constructed in a court of law.

    • #3493
      Intern
      Participant

      A contract has some essentials which include offer and acceptance, without these two essentials a contract cannot be enforced in the court of law. However in order to uphold the principles of equity, justice and good conscience there can exist situations where despite of the presence of the essentials of the contracts the contracts are considered enforceable in the court of law. These contracts which are enforceable under special circumstances which apparently do not satisfy the conditions of contracts but seem to be contracts are known as quasi-contracts, where quasi means apparently but not really.
      The concept of quasi-contracts comes into existence due to the principle of Nemo Debet Locupletari ex aliena Jactura which means that no one can benefit from other persons loss, due to which any liability arising out of the situations mentioned in 68 to 72 is considered as a quasi-contract, so that the anybody cannot unjustly enrich at the expense of someone’s loss.
      Section 68 to 72 accounts for these special circumstances, however, the question about quasi-contract being enforceable in the court despite of a presence of an agreement is because in certain situation like implied responsibility after finding goods, paying for necessities, paying for the goods obtained by coercion, person enjoying benefit from anybody non-gratuitous act etc another person unjustly gets advantage which is not right justice to the other party., thereby courts allow the enforceability of a contract without agreement in certain conditions.

    • #3494
      Intern
      Participant

      There are many situations in which the law requires that a certain person be required to comply with an obligation, although he has not broken any contract or committed any tort. Therefore, when A leaves certain goods at B’s house by mistake, the latter is bound to restore them. Such obligations are called quasi-contractual obligations. In such contracts, there is no contract between both parties, but the law deems such obligations as contracts. Quasi contracts arises when one person has received a benefit, which the law regards as belonging better to another and compels the former to account for such benefit through compensation. The essentials for the formation of a quasi contract are:
      • The defendant has been enriched by receiving the benefit,
      • The enrichment is at the cost of the plaintiff, and
      • The retention of this enrichment is unjust.

      Ss. 68 to 72 of the Indian Contract Act deal with these types of quasi-contracts:
      1. Necessities supplied to a person who is incapable of contracting or on his account. Sec. 68,
      2. Reimbursement of a person paying money which is due by another. Sec. 69,
      3. Liability of a person enjoying a non-gratuitous act. Sec. 70,
      4. Rights and liability of finder of goods. Sec. 71, and
      5. Liability of a person to whom money is paid or a thing has been delivered by mistake or under coercion. Sec. 72.

      Therefore quasi contracts are not a contracts, they merely consists of certain relations that resemble those created by a contract. The essentials required for the formation of the contract are missing in quasi contracts, i.e. proposal and acceptance, but the result resembles those of a contract. Contracts are right in rem as well as right in personam, as against quasi contracts, which are only right in personam, i.e available to one person only and not the whole world. However, the rights and liabilities of parties to a quasi contract are the same as those of parties who have entered into a contract.
      In quasi contracts the liability in exists independent of the agreement and rests upon the principle of equity and unjust enrichment. Lord Mansfield, who is considered the founder of such obligations explained that the law, as well as justice should try to prevent unjust enrichment, i.e. enrichment of a person at the cost of another.

    • #3495
      Intern
      Participant

      Contract is defined in section 2(h) of Indian Contract Act, 1872. It is formed between two competent parties through offer and acceptance and there should be a valid consideration. It is right in personam and Contract can be formed with only that person who has accepted the offer and is ready to give the consideration. For example- A agrees to sell his house to B for 10 lakhs and they sign an agreement for the same, this is a contact.
      Quasi Contract on the other hand is enforceable by law and is not based on offer and acceptance, rather, it is based on justifiability and equity and doesn’t require consent. Quasi contract is based on the concept that no one should benefit from other person’s loss. It is right in rem i.e., can be exercised only against people who has suffered loss due to that person. For Example X used a perfume bottle completely thinking it to be his. Whereas, it was a gift for his friend Y. X is obliged to gift Y another perfume bottle.

    • #3559
      Intern
      Participant

      The Indian contracts act 1872, defines Contract in section 2(h) as’ Agreements enforceable by law
      are contracts’, and sections 68-72  constitute situations under the Quasi-contracts.
      General Contracts are entered into by interested parties voluntarily without any compulsion,
      whereas quasi-contracts are imposed by law.
      General Contracts can be both rights in Rem (against the whole world) and rights in Personam
      (against any one person or entity),whereas quasi-contracts are only rights in Personam, these are
      only available against a specific person i.e., right in personam.
      For the making of a contract, liability exists according to the terms mentioned and agreed upon by both
      the parties, whereas under quasi-contract, the liability comes into existence through the conduct of
      the parties and is based on morality, natural justice, equity, and a good conscience.
      Quasi-contract is not an actual contract though it is still enforced by law. It is based on the Latin
      maxim “Nemo debet locupletari ex aliena jactura”  which means, nobody should be benefited at the
      cost of another or nobody should be enriched at the cost of another’s loss.
      For example-  A ordered a pizza from B, that is wrongly delivered to C and he doesn’t correct the
      delivery boy and keeps the pizza. Here, quasi-contract arises and C will be required to pay back the
      amount of pizza to A.
      There is no prior agreement, offer and acceptance in a Quasi-contract. Quasi-contract is enforced
      when any person enjoys the benefit of something but refuses to pay or compensate for it or the
      another person might have to bear the burden of it.
      To avoid unjust enrichment of one party from the loss of the other party, quasi-contract arises as an
      obligation by the law and hence it is enforceable by law.

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