A quasi contract is a fictitious contract created under legal obligations, similar to a valid contract. These contracts are also known as implied-in-law contracts. What makes this different is that the parties involved do not intend to create a contract. A quasi contract is created by the Court. For the same reason, there is no actual offer or acceptance or an agreement between the parties. Also, a quasi contract is based on the principle of unjust enrichment. According to this principle, a person is not allowed to draw benefit at the cost of someone else. 

Let’s understand how to apply the term ‘quasi contract’ through the following example: Suppose a mechanic is called to repair the car of Mr. X. However, the mechanic thinks that Mr. Y’s car is the one belonging to Mr. X and repairs it accidentally. Mr. Y sees the mechanic repairing his car, but he does not stop him from doing so, because he is secretly pleased to get his car fixed free of cost. When the mechanic asks for payment from Mr. Y, he refuses to pay the bill. However, by implication, a quasi contract has been created from the moment Mr. Y spotted the mechanic repairing his car and let it continue. Mr. Y would be held liable for payment if it can be proved in court that he was aware of the mistake of the mechanic and let him continue.

The Contract Act: Cases Where Quasi Contractual Obligations Arise

The following are some cases where quasi contractual obligations arise:

Supply of Necessaries to an Incompetent Person

Under section 68 of the Indian Contract Act, 1872, a person, who supplies another person, who is inept to enter into a contract, with necessaries of life is entitled to get a share from the property of the latter. 

Payment by an Interested Person

Under section 69 of the Act, a person, who is interested in payment of money which was supposed to be paid by another but pays it, is entitled for reimbursement from the said person. Let’s use a simple example to explain this. Suppose you were on a holiday and your neighbor pays your house tax on your behalf, you are liable to pay back your neighbor for making payment of your behalf in your absence.

Performance of Non-Gratuitous Act

Section 70 provides that if a person has received lawful services from another person, which the former had not asked for but needed at that moment, the other person is entitled to be compensated for the services that were rendered.

Becoming Finder of Lost Goods

Under section 71 of the Act, a person who finds goods belonging to another person and takes the custody of the goods is subjected to the responsibilities of having the possession of the property under bailment and cannot use it for his own good. By implication, the finer has to safeguard it.

Payment of Money by Mistake

Under section 72 of the Act, a person who receives money or goods by mistake or under compulsion is liable to return it.