BUSINESS LAW PRESENTATION

QUASI CONTRACTS

EFFORTS BY:-
VARTIKA SINGH 717
ALIA TYAGI 761
ANOUSHKHA KANT 716 01
 DEFINATION AND CHARACTERISTICS

A quasi contract (also known as an implied

contract) refers to a legal concept where a 1. No Actual Agreement
court imposes an obligation on a party to 2. Imposed by Law
prevent unjust enrichment, even though no
3. Unjust Enrichment
actual agreement (express or implied) was
made between the parties involved. 4. Restitution
Quasi contracts are created by law in 5. Existence of a Benefit
situations where one party receives a benefit 6. Absence of Free Consent
at the expense of another in circumstances
that would be unfair if the benefit were not
7. Equity and Fairness
compensated. The court may enforce such an
obligation as if a contract had existed
between the parties, even though they did not
explicitly agree to it.

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 OBJECTIVE
1. Prevent Unjust Enrichment: The central purpose of a quasi contract is to
avoid one party being unjustly enriched at the expense of another. This
ensures that people do not unfairly retain a benefit without providing
something in return.
2. Promote Fairness and Justice: Quasi-contracts aim to uphold principles of
fairness and equity. In cases where there is no formal agreement, but one
party has provided a benefit to another, the law creates an obligation for
restitution to prevent the enriched party from taking advantage of the
situation.
3. Restitution: The objective is often to restore the situation to what it would
have been had no benefit been received by the enriched party. This
typically involves requiring the recipient to return or pay the value of the
benefit they received.
4. Provide Remedies in the Absence of a Formal Contract: Quasi-contracts
help resolve situations where there is no explicit or implied agreement, but
it would be unfair for one party to walk away without compensating the
other. In these cases, the law creates a "contract-like" obligation to ensure
that the party who provided the benefit is compensated.
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TYPES OF QUASI
CONTRACTS
Mistaken Payments
01 A person may accidentally pay money to someone else due to an error or misunderstanding. A
quasi contract can be applied to require the recipient to return the money or pay it back, as they
were not entitled to receive it.

Delivery of Goods by Mistake

02 Goods may be delivered to the wrong address or person by mistake. Even though no contract
exists between the sender and the recipient, the recipient is obligated to either return the goods
or compensate the sender for their value.

Unjust Enrichment in Services Rendered

03 Services may be provided without an agreement or contract, but if the recipient benefits from the
services, they may be required to compensate the provider for the value of the service.

Necessary Goods Provided to a Person Unable to Contract (e.g., a Minor)

04 If a person who is unable to contract (such as a minor or someone mentally incapacitated) is
provided with necessary goods or services, the provider may be entitled to payment for those
goods or services, even though no formal agreement exists.

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 ELEMENTS OF QUASI CONTRACTS
Benefit Conferred
One party must have provided a benefit (such as goods, services, or money) to another party. This benefit could
be delivered intentionally or by mistake. For a quasi contract to exist, the recipient must have received something
of value that they did not initially pay for or agree to.

Knowledge of the Benefit

The party receiving the benefit must have knowledge of it. They must be aware that they have received something
of value from the other party, either through their actions or as a result of the actions of another.

Acceptance or Retention of the Benefit

The party who received the benefit must accept or retain it. If they refuse the benefit or return it, no quasi
contract can arise. The law imposes a duty to compensate only when the recipient knowingly accepts and retains
the benefit.

Unjust Enrichment
The key purpose of a quasi contract is to prevent unjust enrichment. This means that the recipient should not be
allowed to keep the benefit without compensating the party who provided it. If one party unfairly benefits at the
expense of another, the law steps in to ensure fairness and require payment or restitution.

Absence of a Formal Agreement

A quasi contract arises in situations where no formal contract exists between the parties. Unlike regular contracts,
where parties voluntarily agree to terms, quasi contracts are imposed by the court to correct situations of unjust
enrichment or unfair benefit, without the need for mutual consent.
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 QUASI CONTRACTUAL REMEDY

Quantum Restitution Quantum Compensation for

Meruit Valebant Necessary Goods/Services
This Latin term means "as much as Restitution is the primary remedy This remedy applies to situations In cases where goods or services
he deserves" and refers to the in quasi contracts. It involves where goods have been delivered are provided to someone in need,
remedy where a party is requiring the party who received without an agreement or especially to a minor or someone
compensated for the value of the benefit to return or contract. The court may order the unable to contract, the court may
services rendered, even though compensate for the value of the recipient of the goods to pay the order compensation for the
there was no formal agreement for benefit they received. This fair market value of the goods goods or services that were
payment. The law assumes that the ensures that the recipient of the based on their value at the time necessary for the well-being of
party who received the services benefit does not unfairly keep of delivery. the recipient.
owes the service provider a fair something without compensating Example: If a person mistakenly Example: If a minor receives
amount based on the value of those the other party. delivers goods to someone, and medical treatment (a necessary
services. Example: If a person mistakenly the recipient accepts them, the service) and the provider is not
Example: If a contractor completes receives goods and uses them, recipient may be required to pay paid, the court may order the
part of a job under the assumption the court may order them to the market value of those goods. minor (or their guardian) to pay
that they will be paid, but no either return the goods or pay for for the service, despite the
contract was made, the contractor their value to the party who minor's inability to contract.
may still be entitled to payment provided them.
based on the value of the work
done.
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CASE STUDY
Facts of the Case:
01
In this case, M.C. Chockalingam, the plaintiff, had deposited a sum of money into his account with
the State Bank of India. Due to a mistake on the part of the bank, the money was wrongly
transferred to another person's account. The plaintiff discovered this mistake when he later tried to
withdraw the amount, and he sought to reclaim the money that had been erroneously credited to
another person's account.

Issue:
02 The primary issue in the case was whether the defendant (the State Bank of India) was liable to return
the money to the plaintiff, even though there was no formal contract between them concerning the
mistake.
Court's Decision:
03
The Supreme Court of India held that the defendant (the State Bank of India) was liable to return the money to the plaintiff
based on the principle of unjust enrichment. The Court found that the bank's mistake in crediting the money to the wrong
account created a quasi contract. The court invoked the principles of restitution and unjust enrichment, stating that the
person who had benefited from the erroneous transfer had an obligation to return the money, even though no formal
contract existed between the parties.

Principle of Quasi Contract:

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The court applied the concept of quasi contracts to prevent the unjust enrichment of the party who wrongly received the
benefit (the person who had received the money due to the bank's mistake). It emphasized the obligation to return the
benefit received under circumstances where it would be unjust to allow the recipient to keep it without compensating the
rightful owner.

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CONCLUSION
Real-life examples include mistaken payments, wrong deliveries of goods, and
services rendered without a contract. Landmark cases, such as M.C. Chockalingam
v. The State Bank of India, illustrate the application of quasi contract principles in
situations involving unjust enrichment.
In conclusion, quasi contracts play a crucial role in protecting individuals from
unfair advantages when no formal contract exists, ensuring that justice and fairness
prevail in situations of mistaken benefits.

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THANK YOU

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