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Mercantile Laws-I

Notes 2.8.1 Quasi Contracts (Ss.68-72) (Certain Relations Resembling those
created by Contracts)

Meaning of Quasi Contracts

‘Quasi Contracts’ are so-called because the obligations associated with such transactions could
neither be referred as tortuous nor contractual, but are still recognized as enforceable like
contracts, in courts. According to Dr Jenks, quasi contract is “a situation in which law imposes
upon one person, on grounds of natural justice, an obligation similar to that which arises from
a true contract, although no contract, express or implied, has in fact been entered into by them”.
The principle underlying a quasi contract is that no one shall be allowed unjustly to enrich himself
at the expense of another, and the claim based on a quasi-contract is generally for money.

Example: X supplies goods to his customer Y who receives and consumes them. Y is bound
to pay the price. Y’s acceptance of the goods constitutes an implied promise to pay. This kind of
contract is called a tacit contract. In this very illustration, if the goods are delivered by a servant
of X to Z, mistaking Z for Y, then Z will be bound to pay compensation to X for their value. This
is a quasi contract.

2.8.2 Cases which are treated as Quasi Contracts

Following are the cases which are to be deemed quasi contracts:
1. Claim for necessaries supplied to a person incapable of contracting or on his account. If
a person, incapable of entering into a contract, or any one whom he is legally bound to
support is supplied by another person with necessaries suited to his condition in life, the
person who furnished such supplies is entitled to be reimbursed from the property of such
incapable person (s.68).

Example:
(i) A supplies B, a lunatic, with necessaries suitable to his condition in life. A is entitled to
be reimbursed from B’s property.

(ii) A who supplies the wife and children of B, a lunatic, with necessaries suitable to their
conditions in life, is entitled to be reimbursed from B’s property.
The above section covers the case of necessaries supplied to a person incapable of contracting
(say, a minor, lunatic, etc.) and to persons whom the incapable person is bound to support
(e.g., his wife and minor children). However, following points should be carefully noted: (a)
The goods supplied must be necessaries. What will constitute necessaries shall vary from
person to person depending upon the social status he enjoys. (b) It is only the property of
the incapable person that shall be liable. He cannot be held liable personally. Thus, where
he doesn’t own any property, nothing shall be payable.
2. Reimbursement to a person paying money due by another in payment of which he is
interested. 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. (s.69).

Example: B holds land in Bengal, on a lease granted by A, the Zamindar. The revenue
payable by A to the Government being in arrear, his land is advertised for sale by the Government.
Under the Revenue Law, the consequence of such sale will be the annulment of B’s lease. B, to
prevent the sale and the consequent annulment of his own lease, pays the Government, the sum
due from A. A is bound to make good to B the amount so paid.

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