Quasi-Contracts (Ss.68–72) & Remoteness of Damage — KSLU Contract I Notes

Quasi-Contracts

You leave a bag of fruit at the wrong house by mistake, and the householder eats it. There was no contract between you — you never agreed on anything. Yet the law makes him pay. Why? Because no one should be enriched unjustly at another’s expense. That principle creates duties the law treats as if they were contracts — quasi-contracts.

Contracts implied by law

Quasi-contracts (the Act calls them “certain relations resembling those created by contract”, ss.68–72) are obligations imposed by law, not by agreement, to prevent unjust enrichment. The idea is captured in Lord Mansfield’s dictum (Moses v Macferlan) that the law obliges a person to repay money which “ex aequo et bono” (in justice and good conscience) he ought to refund.

A. The statutory cases (ss.68–72).

s.68 — Necessaries supplied to a person incapable of contracting (e.g. a minor or lunatic): the supplier is reimbursed from that person’s property.
s.69 — Payment by an interested person: one who pays money another is bound by law to pay, and in which he himself is interested, may recover it.
s.70 — Non-gratuitous act: where a person lawfully does something for another, or delivers something, not intending to do so gratuitously, and the other enjoys the benefit, the latter must compensate or restore.
s.71 — Finder of goods: a finder of goods belonging to another is treated as a bailee — he must take reasonable care, not use them, and try to find the owner; he has a right to possession and to a lien for expenses, and (where a reward was offered) to the reward.
s.72 — Money paid by mistake or coercion: must be repaid or returned.

B. Quantum meruit.

Quantum meruit (“as much as is earned”) lets a party recover a reasonable value for work or goods supplied where the contract is discharged before completion, or is void, or where the other party prevents completion — a restitutionary claim closely allied to quasi-contract.

🧩 WORKED EXAMPLE — fruit delivered by mistake.

Facts. A, a fruit-seller, leaves a bag of fruit at B’s house by mistake; B eats the fruit. A claims its price. There was no contract of sale.

Rule. Where a person enjoys the benefit of a non-gratuitous act/delivery, he must compensate the other (s.70); no one may be unjustly enriched.

Apply. A delivered the fruit not intending a gift, and B knowingly took the benefit by eating it.

Conclusion. B must pay the reasonable value of the fruit under s.70, though there was no contract.

Section 70, Indian Contract Act, 1872: “Where a person lawfully does anything for another person, or delivers anything to him, not intending to do so gratuitously, and such other person enjoys the benefit thereof, the latter is bound to make compensation to the former in respect of, or to restore, the thing so done or delivered.”

In Simple Terms: even without any agreement, if you take the benefit of what someone did or gave you (not meaning it as a gift), the law makes you pay for it — so that no one profits unfairly at another’s cost.

flowchart TD
    QC["Quasi-contract (ss.68-72): imposed by law to prevent unjust enrichment"]
    QC --> S68["s.68 Necessaries to incapable person"]
    QC --> S69["s.69 Payment by interested person"]
    QC --> S70["s.70 Non-gratuitous act enjoyed"]
    QC --> S71["s.71 Finder of goods = bailee"]
    QC --> S72["s.72 Money paid by mistake/coercion"]
    QC --> QM["Quantum meruit — reasonable value for part-performance"]

Case Laws

Moses v Macferlan (1760) — Lord Mansfield’s foundation of quasi-contract: the law compels repayment of money which in justice and good conscience ought to be refunded (unjust enrichment).
[C-12] State of West Bengal v B.K. Mondal & Sons (1962) — s.70 applies where work is done non-gratuitously and the benefit is accepted; the State was liable to pay for constructions it used, though no formal contract existed.

Remoteness of damage: the limit on which losses are recoverable (the rule in Hadley v Baxendale) is explained on the Damages — Section 73 page.

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