INTRODUCTION
A
retroactive agreement between two parties who have no prior responsibilities to
each other is known as a
quasi-contract. It is made by the
judge to fix a situation in which one party benefits at the expense of the
other. This agreement is meant to keep one party from taking advantage of the
situation at the expense of the other. If the goods or services are accepted
but not sought by either party, these contracts can be imposed. Acceptance
justifies the payment expectation. A quasi-contract outlines a party's
responsibility to another if the latter owns the original party's property.
These parties are not required to have previously agreed-upon terms. If Person ‘A’
owes something to Person ‘B’ because Person A indirectly or accidentally owes
Person ‘B’, the agreement is imposed by law by the judge as a remedy. The
contract becomes enforceable if Person ‘A’ decides to keep the thing in
question without paying. The contract is legally enforceable because it was
reached in court, and neither party needs to consent to it. The goal of quasi-contracts
is to produce equitable outcomes in instances when one party has an advantage
over the other. The defendant (the party that acquired the property) is
obligated to pay the plaintiff, the aggrieved party, a return for the value of
the items.[i]
QUASI
CONTRACT EVOLUTION
The
origins
of quasi-contracts can be traced back to
the Middle Ages when they were referred to as debt assumptions. During this
time, the law compelled the plaintiff to get the amount determined by the court
from the defendant, as if the defendant had always agreed to pay the plaintiff
for the goods or services.
Courts
utilized the Indebitatus assumpsit procedure to order one party to pay the
other as though the two parties had signed a contract. The law inferred the
defendant's willingness to be bound by a contract requiring compensation. Such
contracts were utilized to enforce reimbursement obligations in the early days
of quasi-contracts.[ii]
A
QUASI-CONTRACT'S FEATURES
1. It's
usually the right to geta remedy, and it's usually (but not always) a monetary
quantity.
2. Rights are imposed by law rather than
resulting from an agreement.
3. The
law does not apply to everyone in the world; rather, it only applies to certain
individuals. As a result, it resembles a contractual right.[iii]
UNEQUITABLE
ENRICHMENT
When
parties are enriched
without their consent, yet do not seek redress, this is known as unjust
enrichment. Enrichment is a positive aspect of a person's life. [iv]A
physical exertion is an option, but it is not required. Unjust enrichment can
occur in a variety of settings. as an example:
·
The painter made the
mistake of painting the wrong house. When a profit is made, the resident
becomes wealthy. The resident will be unjustly rewarded if he or she decides
not to compensate the painter.
·
Professional wedding
planners can assist your friends with last-minute nuptials. She has gotten
wealthy if her acquaintance accepts this assistance for her benefit. If the
acquaintance refuses to pay for the service when it is billed, the acquaintance
will be unjustly enriched.
·
A qualified doctor
happens to pass by and saves her neighbor’s life by doing emergency surgery. Neighbors’
lives were enriched through emergency surgery. If the doctor then seeks formal
invoice service and is not compensated, this is unjust enrichment. No one
planned to provide the service in the example case, but it happened and
brightened the lives of the receivers.
MERUIT
IN QUANTUM
The
Latin word quantum
meruit refers to the Indian Contract Act,
1872. It means "what one earns" or "what one deserves."
Simply expressed, it shows the true cost of the product or service given.
Although
there is no formal contract, the law does require payment of reasonable compensation
for the work and materials delivered.[v]
A
QUASI-CONTRACT'S REQUIREMENTS
Various
standards must be evaluated or granted by a judge for quasi-contracts.
·
One party must be in a disadvantageous
position, and one party must be unfairly enriched.
·
Recipients of unjust
enrichment must be aware of their situation and accept the benefits they have
received.
·
The uncompensated party
must show that there has been undue enrichment.
·
The exchange must be
held until payment is received.
NECESSITIES
(SECTION 68)
Section
68 says if a person has supplied any
necessary/condition in life to any such incapable person or he was legally
bound to support such incapable person then he may get reimbursement from the
property of such incapable person to whom he supplied with necessaries.
If
the incapable person doesn’t have any property, then the supplier will not be
able to get reimbursement.
Reimbursements
are permitted under Section 68 if the following conditions are met:
·
The items which have
been supplied must be the condition in life or essential for survival.
·
People to whom
necessaries have been supplied musthave impairments and be incapable of
acquiring such necessities. Incompetency to the contract has been defined in
section 11 of the Indian Contract Act.
·
The person should have
a legal obligation to assist such disabled people
·
The reimbursements can
only be gotten from the property of the incapable person. If the incapable
person does not have any property, then the reimbursement cannot be demanded.
Not
only the supplies should be necessary, but also, they must be important to
support people in their living environments. It also relies on the person's
condition and needs at the time when the goods in the name of necessaries are delivered.
Example:
A person has supplied necessaries to an orphaned child such as shelter, food,
clothing, etc, and also beard all the expenses for his education. Then, he can
demand reimbursements from the property of the minor (if any).[vi]
PAYMENT
BY AN INTERESTED PERSON (SECTION
69)
Those
who want to pay money that others are legally obligated to pay and do so are
entitled to recompense from others.
B,
for example, rents Bengal land from A, the Zamindar. The income that A owes to
the government is past due. As a result, the government put the land up for
sale under tax legislation, resulting in the termination of B's lease. B pays
the money that A should pay to the state to avert the sale. The amount paid to
B must be refunded by A.
The
following are the terms of Section 69 liability:
·
The plaintiffs are
willing to pay. He doesn't require formal ownership of the land in exchange for
payment. It is, nevertheless, frequently used to determine whether a plaintiff
is interested.
·
Section 69 prohibits
the court from restricting that a person who is uninterested in property may be
interested in paying for it.
·
Defendants should not
be forced to pay. He should only be concerned with making payments to safeguard
his interests.
·
The defendants must be
legally bound to make restitution.
·
Instead of paying
himself, the plaintiff should have paid someone else.
SECTION
70- PAYMENT OBLIGATIONS FOR NON-GRATUITOUS ACTIVITIES
When
one
person performs something lawfully for
another person, donates something to another person with interest without the
aim of doing it for free, or another person benefits from it. What was done or
given must be paid or refunded by the latter.
Example:
Whenever some person donates anything to the poor, he has no intention of doing
this with charge. Hence, this act will be said to be done gratuitously and he
cannot demand any compensation for the same. But, whenever supplies have been
given non-gratuitously and the supply was lawful, one can get the compensation.
The
following three elements must be completed before asserting the right to a
proceeding under Section 70.
1. The
act must be permissible under the law.
2. The
act should not have been done gratuitously by the person.
3. Those
who act must have reaped the benefits.
For
example, the village's irrigation tank was renovated by the government.
Zamindars have been indirectly rewarded for such efforts of renovating the
irrigation tanks by the government because now the water of the irrigation tank
will be reaching the zamindars' land also. Then, the zamindars are liable to
compensate the government for the same.[vii]
SECTION
71- RESPONSIBILITIES OF THE ITEM FINDER
When
it comes to locating
and managinglost assets that belong
to others, the following criteria should be observed.
1. Take care of things as if you were the legal
owner.
2. There is no legal right to deliver the object
that has been already located.
3. Ensure
that the item is returned to its rightful owner.
For example, Karthik owns and operates anelectronic shop. Ankita went to buy a laptop from him, but she left her wallet at the store. Unfortunately, Karthik is unable to authenticate her identity using the documents in her suitcase. Karthik places her wallet on the cash register and waits for her to return. Karthik clerk Ajay discovers a wallet on the counter and places it in the closet without informing Karthik. He completes his duties and returns home. When Karthik arrives, he is unable to locate Ankita's wallet. He is responsible for damages because he did not treat the wallet with the care that a reasonable person would.[viii]
SECTION
72 (LIABILITY OF PERSON
TO WHOM MONEY IS PAID OR THING DELIVERED BY MISTAKE OR UNDER COERCION)
When
someone receives something as a result of "extortion," they must
repay it.
For
example, Navrana and Rajkumar, share an apartment and split rent payments in
half. Navrana has paid the landlord again, even though Rajkumar has already
paid the full amount of the rent. The landlord is liable for restoring the
money provided by the renter in this situation.[ix]
THE
DIFFERENCE
BETWEEN A CONTRACT AND A QUASI-CONTRACT IS AS FOLLOWS:
A
quasi-contract can be thought of as either a legal or a constructive contract.
This is effectively a made-up contract intended to provide relief to the
offending party, rather than an actual contract. The parties' intent will be
not taken into account in the case of a quasi-contract. In an explicit
contract, on the other hand, the parties' intent is crucial because there is no
contract unless the parties intend to enter into one. The parties' obligations
define the contract and form the terms of the contract in an explicit contract.
In the case of a quasi-contract, however, the duty emerges from the contract's
evolution.[x]
CONCLUSION
The quasi-contract concept is frequently overlooked, yet it nevertheless holds a significant position because it is founded on the values of justice and impartiality. Even though in Indian contract law, quasi-contracts have a new name, however, the principle's basic character and substance have not changed significantly. Quantum revenue is a concept used in the context of quasi-contracts. This determines the extent of the plaintiff's pain. If someone breaks the contract on purpose, the chances of the quasi-contract being used are slim. If the employee intentionally violates the contract, however, this form of penalty is frequently less severe. The quasi-contract is an important aspect of contract law, and the aggrieved will get compensation if someone is unjustly benefited as a result of it.
This blog is authored by JAY KUMAR GUPTA, a student of School of Law, NMIMS Bangalore, currently in the first-year pursuing BBA LL.B.(Hons.)
REFERENCES
[i]https://www.investopedia.com/terms/q/quasi-contract.asp#:~:text=A%20quasi%20contract%20is%20an,the%20expense%20of%20the%20other.
[ii]https://www.legalserviceindia.com/legal/article-4072-quasi-contracts.html#:~:text=Evolution%20Of%20Quasi%20Contract&text=Indebitatus%20assumpsit%20was%20a%20method,was%20implied%20by%20the%20law.
[iv]https://singhania.in/blog/unjust-enrichment-in-india-an-introspection#:~:text=Unjust%20enrichment%20has%20been%20defined,of%20another%20or%20the%20retention
[v]https://www.mondaq.com/india/contracts-and-commercial-law/881198/quantum-meruit#:~:text=Quantum%20meruit%20is%20a%20legal,be%20described%20as%20residual%20equity.
[vi]https://www.indiacode.nic.in/show-data?actid=AC_CEN_3_20_00035_187209_1523268996428§ionId=38672§ionno=68&orderno=69#:~:text=If%20a%20person%2C%20incapable%20of,property%20of%20such%20incapable%20person
[viii]https://mmhapu.ac.in/doc/eContent/Management/FaryasKausarAnsari/Sep2020/Quasi%20Contract%20and%20Remedies%20for%20Breach%20of%20Contract.pdf\
