QUASI CONTRACTS

By
Riaz Uddin Ahmad
(Advocate)
 Quasi Contracts
• Relationships resembling those created by contract.
• Chap V, certain relationships where a contract has not
come into existence because one of the necessary
elements of a contract is lacking (e.g. consideration) and
permits a party to enforce an obligation despite the non-
existence of a contract.
• The underlying principle is of unjust enrichment.
 Continued…
• Sec 68, 69, 70, 71 Contract Act 1872.
• Nash Vs. Inman
– [1908] 2 KB 1 Book P.g 179
• Its real foundation is an obligation which the law imposes
on the infant to make a fair payment in respect of needs
satisfied.
• Necessary include everything inorder to maintain the infant
in the state, station or degree of life in which he is, it’s a
relative fact.
• Articles therefore that to one person might be mere
convenience or matters of taste, may in the case of another
be considered necessaries.
 Continued…
• Articles purchased by an infant for his wedding may be
deemed necessary, while under ordinary circumstances the
same articles might not be so considered.
• It is incumbent upon the supplier to satisfy himself that
the goods are necessary to that minor and in case of
stranger, in default of supply by anyone else.
• Sham Charan Mal Vs. Chowdhry Debya Singh..
– 1894 ILR 21 Cal 872. Book p.g 181
Continued…
A minor will not be personally liable under Sec 68. His
property will be liable. To the extent that his property
is insufficient, the supplier will be unable to recover.
The supplier will be entitled to be reimbursed at a
reasonable price.
 Payment by Interested Party (Sec 69)
• When a person makes payment of money being interested
in such payment, which another person is bound to make
under the law, the former acquires a right of indemnity for
reimbursement against the latter. There need not be any
privity of contract.
• A fictional implied request in such a case, by the person
on whose behalf the payment is made, to the person who
makes the payment, may be imported.
 Continued…
• Conditions;
– That the payer is interested in the payment
– That the debtor is bound by law to make the payment.
• A payer may be interested in the payment on the basis that
he is legally bound to make it and such legal obligation
will not preclude him from being interested in payment.
• E.g. Where owner of the goods is shipping goods through
a shipment company which has further insured it with an
insurance company. Now when the goods are damaged in
transit, the insurance company will be an interested party
to pay/compensate, though he is legally bound. (American
Orient).
 Continued…
The payer need not have a propriety interest in the
property in respect of which the payment is made.
Govindram Gordhanas.. Vs. State of Gondal
(1950) 52 BOMLR 450.
The payer must have an interest in the payment or an
honest belief that he has an interest in the payment.
Sec 69 will not apply to a moral obligation upon the
debtor to pay.
 Non-Gratuitous Act (Sec 70)
Where a person lawfully does anything for another
person, or delivers anything to him, not intending to do so
gratuitously, and the other enjoys the benefit, he is bound
to compensate for or return the thing done or delivered.
Principle of unjust enrichment.
It will not apply where there is a contract between the
parties.
 Continued…
Requirements;
The party claiming compensation must do something for
another or deliver something to the party from whom he is
claiming compensation.
The claimant must not intend to do the act or delivery,
gratuitously.
The party from whom he is claiming must voluntarily enjoy
the benefit of the act or goods.
Faiz Ahmad Vs. Metropolitan Corporation Lhr
1997 CLC 599, Lahore. Book P.g 184
The act is for the benefit of the actor does not preclude it
from being for the benefit of another as well.
Continued…
Sec 70 does not impose an obligation upon an
individual to pay for work done or goods provided if
he does not want such work or goods and the party to
whom the delivery has been done must have the
option of accepting or rejecting the goods or services.
 Finder of Goods (Sec 71)
A person who finds goods belonging to another, and takes
them into his custody, is subject to the same responsibility
as a bailee.
A finder’s responsibilities begin when he takes them
(goods) into his custody, otherwise not.
He is responsible to find the owner, preserve the goods
and to return them to the owner.
He has a lien over the goods to the extent of the expenses
he incurs in doing so.