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Certain Relations Resembling Those Created by Contract

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 19-Dec-2024

Introduction 

  • The Indian Contract Act, 1872 (ICA) recognize certain relations resembling those created by contract, commonly known as "quasi-contracts."  
  • These are obligations that arise not from any agreement between parties but from principles of natural justice and equity.  
  • The law imposes these obligations to prevent unjust enrichment and to ensure fairness in dealings between parties. 
  • There are several relationships that, although not formal contracts, bear resemblance to contractual obligations.  
  • These relationships arise from various social, economic, and legal contexts and are recognized by the law to ensure fairness and justice.  
  • Chapter V of the ICA states the provisions for quasi contractual Relations.

Legal Provisions Based on Quasi- Contractual Relations

  • Section 68 to Section 72 of the ICA states the provisions as: 
    • Section 68: Claim for necessaries supplied to person incapable of contracting, or on his account: 
      • If a person incapable of entering a contract or anyone whom they are legally bound to support is supplied with necessaries suited to their condition in life, the supplier is entitled to be reimbursed from the property of such incapable person. 
      • The key elements are: 
        • The recipient must be incapable of contracting (e.g., minors, persons of unsound mind). 
        • The goods supplied must be "necessaries." 
        • The necessaries must be suitable to the person's condition in life. 
        • Recovery is limited to the value of the goods from the property of the incapable person. 
      • Courts consider factors such as: 
        • The social status and standard of living of the recipient. 
        • The actual need for the items supplied. 
        • The reasonable market value of the necessaries. 
    • Section 69: Reimbursement of person paying money due by another, in payment of which he is interested: 
      • A person who is interested in the payment of money which another is bound by law to pay, and who therefore pays it, is entitled to be reimbursed by the other. 
    • Essential Conditions are: 
      • The payment must be legally obligatory on another person. 
      • The person making the payment must have a legitimate interest. 
      • The payment must not be made officiously. 
      • The payment must be necessary and reasonable. 
    • Section 70: Obligation of person enjoying benefit of non-gratuitous act: 
      • Where a person lawfully does anything for another person without intending to do so gratuitously, and such other person enjoys the benefit thereof, the latter must compensate the former. 
    • Essentials for Claim: 
      • The act must be lawfully done. 
      • It must not be done gratuitously. 
      • The other party must enjoy the benefits. 
      • There must be no valid contract governing the situation.
    • Limitations and Exceptions: 
      • Mere conferral of benefit does not create liability. 
      • The benefit must be actual and capable of estimation. 
      • The service must not be forced upon the beneficiary. 
    • Section 71: Responsibility of Finder of Goods: 
      • A person who finds goods belonging to another and takes them into his custody is subject to the same responsibility as a bailee. 
      • Duties of the Finder: 
        • Take reasonable care of the property. 
        • Attempt to find the true owner. 
        • Not use the goods for personal benefit. 
        • Return the goods when the owner is found. 
        • Hand over any profits derived from the good.
      • Rights of the Finder: 
        • Right to reimbursement for expenses. 
        • Right to reward if any was offered. 
        • Lien over the goods for expenses incurred. 
    • Section 72: Liability for Money 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. 
      • Key Principles are: 
        • Mistakes can be fact or law. 
        • Coercion includes any form of unlawful pressure. 
        • The obligation to return exists regardless of fault. 
        • The claim must be made within a reasonable time. 

Conclusion 

Quasi-contractual obligations serve as essential tools of justice in situations where no formal contract exists. They prevent unjust enrichment and ensure fair dealing in commercial and personal relationships. While these obligations arise by operation of law rather than agreement, they create legally enforceable rights and duties similar to those arising from contracts.