While the English common law traditionally uses the term ‘Quasi-Contract’, the Indian Contract Act, 1872 intentionally avoids this phrase. Instead, it encapsulates the concept under Chapter V as “certain relations resembling those created by contract.” The term ‘Quasi’ literally translates to “as if” or “resembling.” A formal contract is composed of two primary phases:

The Formative Phase: Involves proposal, acceptance, competency of parties, free consent, lawful consideration, and a lawful object.

The Consequential Phase: Involves the actual discharge, performance, or breach of the obligations created.

In a quasi-contract, the formative phase is entirely absent—there is no agreement, offer, or mutual consent. Nevertheless, the law steps in and imposes a legal obligation on one party to prevent an injustice. These obligations do not arise from the alignment of intentions (consensus ad idem), but are legally presumed based on the circumstances to mirror contractual liabilities.

II. Evolution of the Concept

Lord Mansfield is universally recognized as the pioneer of the modern quasi-contractual obligation. He articulated its foundational rationale in the landmark English case Moses v. Macferlan (1760) 2 Burr 1005, stating that law and justice must intervene to prevent “unjust enrichment”—that is, enriching oneself unjustly at the expense of another.

Modern quasi-contractual obligations rest firmly on the principles of equity, justice, and good conscience. The doctrine has been further refined into three core elements:

The defendant has been enriched by the receipt of a benefit.

The enrichment was at the plaintiff's expense.

It would be unjust to allow the defendant to retain that benefit without compensating the plaintiff.

III. Statutory Provisions Under the Indian Contract Act, 1872

Sections 68 to 72 of the Indian Contract Act, 1872 deal explicitly with five distinct types of quasi-contractual relations.

1. Claim for Necessaries Supplied to a Person Incapable of Contracting (Section 68)

While a minor's or a person of unsound mind's agreement is void ab initio (as established in Mohori Bibee v. Dharmodas Ghose (1903) 30 Ind App 114), Section 68 creates a statutory exception. It provides that if an incapable person (or anyone they are legally bound to support) is supplied with necessaries suited to their condition in life, the supplier is entitled to be reimbursed from the property of such incapable person.

Crucial Note: The liability is entirely in rem (against the property) and not in personam (the minor or lunatic cannot be held personally liable or arrested).

Statutory Illustrations:

A supplies B, a lunatic, with necessaries suitable to his condition in life. A$ is entitled to be reimbursed from $B$’s property.

$A$ supplies the wife and children of $B$, a lunatic, with necessaries suitable to their condition in life. $A$ is entitled to be reimbursed from $B$’s property.

Meaning of "Necessaries"

Necessaries are not limited to bare essentials like food, clothing, and shelter. They encompass goods and services reasonably required to maintain the person in their specific station in life, including medical expenses, legal costs to defend their property, and basic education.

Bechu Singh v. Baldeo Prasad, AIR 1933 Oudh 132: The court held that finances advanced to a minor for performing the necessary funeral obsequies of his deceased father constitute "necessaries" under Section 68, allowing the lender to recover the amount from the minor's estate.

2. Reimbursement of Person Paying Money Due by Another, in Payment of Which He is Interested (Section 69)

A person who is interested in the payment of money which another is bound by law to pay, and who therefore pays it, is entitled to be reimbursed by the other. To invoke Section 69, three conditions must be satisfied:

The plaintiff must have a bona fide interest in making the payment (it cannot be a meddlesome interference).

The defendant must be legally bound to pay that money.

The plaintiff must pay it to protect their own interest.

Statutory Illustration:

B holds land in Bengal on a lease granted by A, the Zamindar. The revenue payable by A to the Government is in arrears; consequently, the land is advertised for sale by the Government. Under the revenue law, such a sale will annul B’s lease. B, to prevent the sale and the subsequent annulment of his lease, pays the Government the sum due from A. A is bound to make good to B the amount so paid.

3. Obligation of a Person Enjoying the Benefit of a Non-Gratuitous Act (Section 70)

Where a person lawfully does anything for another person, or delivers anything to them, not intending to do so gratuitously, and such other person enjoys the benefit thereof, the latter is bound to make compensation or restore the thing.

Three conditions must be fulfilled for Section 70 to apply:

The act must be done lawfully.

It must not be intended to be done gratuitously.

The person for whom the act is done must enjoy its benefits.

Statutory Illustrations:

A, a tradesman, leaves goods at B’s house by mistake. Btreats the goods as his own. B is bound to pay A for them.

A saves B’s property from fire. A is not entitled to compensation from B if the circumstances show that he intended to act gratuitously.

Key Case Law:

Damodar Mudaliar v. Secretary of State for India, (1894) ILR 18 Mad 88:

The Government executed repairs on an irrigation tank that benefited eleven villages—some under government control and others owned by Zamindars. The Government did not intend to do this work gratuitously. The Zamindars knowingly accepted the benefits of the enhanced water supply. The Court held the Zamindars liable to pay proportionate expenses to the Government under the principle of quantum meruit encoded in Section 70.

State of West Bengal v. B.K. Mondal & Sons, AIR 1962 SC 779:

The Supreme Court affirmed that even if a formal contract with the government fails to comply with constitutional requirements (like Article 299), if the government accepts and enjoys the benefit of work done lawfully and non-gratuitously, it is bound to compensate the contractor under Section 70.

4. Responsibility and Rights of a Finder of Goods (Section 71)

A person who finds goods belonging to another and takes them into their custody is subject to the same responsibilities as a bailee (as defined under Section 151). They must exercise reasonable care, must not mix the goods with their own, and are bound to return them when the true owner is traced.

Rights of a Finder of Goods:

The finder is granted specific statutory rights under Sections 168 and 169:

Right	Section	Description
Right of Lien	S. 168	The finder may retain the goods against the true owner until they receive compensation for the expenses/trouble voluntarily incurred to preserve the goods and find the owner. However, they cannot sue the owner for these standard expenses.
Right to Sue for Reward	S. 168	If the owner offered a specific, explicit reward for the return of the lost goods, the finder may sue for such reward and retain the goods until it is paid.
Right of Sale	S. 169	The finder may sell the items if the owner cannot be found with reasonable diligence, or refuses to pay lawful charges, provided: 1. The item is in danger of perishing or losing the greater part of its value, OR 2. The lawful charges incurred amount to two-thirds (2/3) of the total value of the item.

5. Liability of a Person to Whom Money is Paid, or Thing Delivered, by Mistake or Under Coercion (Section 72)

A person to whom money has been paid, or anything delivered, by mistake or under coercion, must repay or return it. The Supreme Court has clarified that the term "mistake" applies equally to mistakes of fact and mistakes of law (e.g., taxes paid under an unconstitutional law).

Statutory Illustrations:

A and B jointly owe 100 rupees to C. A alone pays the amount to C, and B, unaware of this fact, pays 100 rupees over again to C. C is bound to repay the amount to B.

A railway company refuses to deliver certain goods to the consignee except upon the payment of an illegal charge for carriage. The consignee pays the sum charged in order to obtain the goods. He is entitled to recover so much of the charge as was illegally excessive.

Key Case Law:

Saseendrakumari v. State Bank of India, AIR 2011 Ker 58: The Kerala High Court held that where an amount is mistakenly credited twice into a customer’s account by a banking institution, the customer cannot enrich themselves at the cost of the bank. The recipient is legally obligated under Section 72 to remit the excess credited amount back to the bank.

Sales Tax Officer, Banaras v. Kanhaiya Lal Saraf, AIR 1959 SC 135: The Supreme Court established that the word "mistake" in Section 72 is used without qualification and covers money paid under a mistake of law. If taxes are paid under an assessment that is later declared void or unconstitutional, the state is bound to refund the amount.