Quasi Contracts

In case of Quasi Contract, there will be no offer and no acceptance either on express base or on implied base. But under certain circumstances Court creates contract between the parties artificially and thus binds over the parties. Such contracts which are created by virtue of law are called Quasi Contracts. Section 68 to 72 of Contract Act read about the situations where court can create Quasi Contract.

Section 68 - when necessaries are supplied: When one party supplies necessaries to the other (without request), a quasi contract comes into force.
  • A case on this point is Chaval Vs Cooper.
Section 69 - When expenses of one person are paid by the other: When expenses which are to be paid one party are paid by another party, the parties are said to be under quasi contract.
  • A case on this point is Hazarilal Vs Navaranglal. In this case B purchases A`s agricultural land. On that land cess is in arrears for a longer period which are actually to be cleared by A, But B pays that amount. Here Court creates a quasi contract between them under 
Section 69 and thus capacitates B to recover that amount from A.

Another case on this point is Govindram Govardhan Das Vs State of Gondal.

Section 70 - When one party is benefited by the activity of another party: When one party Conducts an activity and its benefit is attained by another party, then also Court can create a quasi Contract.
  • A Case on this point is DamodarModaliar Vs Secretary of State for India. In this case A is resident of a Village. The local government conducts repairs to the tank situated at A`s village. As a result A gets benefited because the surrounding lands belong to A. Here Court creates a Quasi Contract and decides that A has to bear cost of repairs.
Section 71 - In case of finder of lost goods: Court can create a quasi contract in case of finder of lost goods.
  • Related case is Hallius Vs Fowler. In this case B finds a diamond at A`s shop and hands it over to A, requesting A to send the diamond to true owner. True owner is not found. When true owner is not found. Finder gets the title. No one can claim share in it. Here court creates a bailment contract between B and A and thus capacitates B to get diamond back.
Section 72 - When payment is made by mistake: When ever payment is made by mistake or goods are delivered by mistake , Court can create a quasi Contract.
  • A case on this point is Khaniyalal Vs Sales Tax Officer of the Banaras. In this case Mr. A pays Sales tax by mistake though he is need to pay. Here Court creates a quasi Contract and capacitates A to recover that amount.


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