Quasi Contract Under Indian Contract Act, 1872 (2026)
Reviewed by Lawsection.in Editorial Team | June 26, 2026
Quasi Contract is an important concept under the Indian Contract Act, 1872 that creates legal obligations even without a valid agreement between parties. The doctrine is based on the principle of unjust enrichment and is covered under Sections 68 to 72 of the Act. This topic is highly important for Judiciary, CLAT PG, AIBE, and UGC NET LAW examinations.
Although it is called a “contract,” a quasi contract is not a real contract because there is no agreement, no promise, and no consent between the parties. Instead, the law imposes an obligation on one party to prevent unjust enrichment.
This doctrine is based on the principle:
“No person should unjustly benefit at the expense of another.”
Under Indian law, quasi contracts are governed by Sections 68 to 72 of the Indian Contract Act, 1872.
For students preparing comprehensive contract law notes, this topic forms an essential part of the broader Indian Contract Act, 1872 syllabus inside the Law Notes hub.
What is Quasi Contract under Indian Contract Act?
A quasi contract is a legal obligation imposed by law under Sections 68 to 72 of the Indian Contract Act, 1872, even when no actual agreement exists between parties. It is created to prevent unjust enrichment where one person unfairly benefits at another’s expense.
Meaning of Quasi Contract
The term “quasi” means “as if” or “almost.” Therefore, a quasi contract means:
“An obligation resembling a contract.”
The obligation does not arise from mutual consent but is imposed by courts based on equity, justice, and good conscience.
The doctrine originated from English law and was recognized in India through statutory provisions under the Indian Contract Act.
Definition of Quasi Contract
The Indian Contract Act does not expressly define quasi contract. However, it refers to such obligations as:
“Certain relations resembling those created by contracts.”
These are covered under:
- Section 72
- Section 68
- Section 69
- Section 70
- Section 71
Essential Elements of Quasi Contract
For a quasi contractual obligation to arise, the following essentials generally exist:
1. No Valid Contract Exists
There is no actual agreement between parties.
2. One Party Receives Benefit
A person obtains some benefit, service, money, or advantage.
3. Benefit Is Non-Gratuitous
The act was not done free of cost or as charity.
4. Unjust Enrichment Would Occur
If compensation is not paid, one party would unfairly benefit.
5. Law Imposes Liability
The court creates legal responsibility to ensure fairness.
Legal Basis of Quasi Contract
The foundation of quasi contract is:
- Equity
- Justice
- Good conscience
- Prevention of unjust enrichment
The Supreme Court of India has repeatedly recognized that quasi contractual liability exists to ensure fairness where no formal contract exists.
Difference Between Contract and Restitutionary Obligations
| Basis | Contract | Quasi Contract |
|---|---|---|
| Agreement | Exists | Does not exist |
| Consent | Free consent required | No consent |
| Origin | Mutual promises | Imposed by law |
| Nature | Actual contract | Fictional obligation |
| Objective | Performance of promise | Prevention of unjust enrichment |
Types of Quasi Contracts Under Indian Contract Act
The Indian Contract Act recognizes five major categories of quasi contracts under Sections 68 to 72.
1. Supply of Necessaries to Incapable Person – Section 68
Provision
If a person supplies necessities to someone incapable of contracting (such as a minor or mentally unsound person), the supplier is entitled to reimbursement from the incapable person’s property.
Essentials
- Person incapable of contracting
- Necessaries supplied
- Necessaries suited to condition in life
- Reimbursement from property only
Practical Example
A medical shop provides life-saving medicines to a minor injured in an accident. Even though the minor cannot enter a valid contract, the supplier can recover expenses from the minor’s property.
Landmark Case
Nash v. Inman (1908)
A minor purchased expensive clothes already sufficiently supplied. The court held the seller could not recover payment because the goods were not “necessaries.”
2. Payment by Interested Person – Section 69
Provision
A person who pays money which another person is legally bound to pay can recover it if he is interested in making the payment.
Essentials
- Plaintiff interested in payment
- Defendant legally bound to pay
- Plaintiff pays to protect own interest
- Payment not voluntary
Practical Example
A tenant pays municipal tax owed by landlord to prevent property auction. The tenant can recover that amount from the landlord.
Landmark Case
Govt. of Madhya Pradesh v. Bhailal Bhai
The court recognized restitution where money is paid under legal compulsion.
3. Obligation of Person Enjoying Benefit of Non-Gratuitous Act – Section 70
Provision
If a person lawfully does something for another person without intending it to be gratuitous, and the other person enjoys the benefit, compensation must be paid.
Essentials
- Lawful act
- Non-gratuitous intention
- Benefit enjoyed by another person
Practical Example
A contractor mistakenly delivers construction materials to the wrong building site. The owner knowingly uses the materials. The owner must compensate the contractor.
Landmark Case
State of West Bengal v. B.K. Mondal & Sons (1962)
The Supreme Court held that where government accepted and benefited from construction work, compensation was payable under Section 70 despite absence of valid contract.
4. Responsibility of Finder of Goods – Section 71
Provision
A person who finds goods belonging to another must take reasonable care of them as a bailee.
Rights and Duties of Finder
Duties
- Take reasonable care
- Avoid unauthorized use
- Attempt to locate owner
Rights
- Right of lien
- Right to recover expenses
- Right to sell in certain situations
Practical Example
A person finds a lost mobile phone in a café and safely keeps it while attempting to contact the owner. Law imposes duties similar to a bailee.
5. Money Paid or Goods Delivered by Mistake or Coercion – Section 72
Provision
A person receiving money or goods by mistake or coercion must repay or return them.
Essentials
- Money/goods delivered
- Delivery by mistake or coercion
- Receiver unjustly enriched
Practical Example
A bank mistakenly credits ₹50,000 into a customer’s account. The customer must return the amount.
Landmark Case
Sales Tax Officer v. Kanhaiya Lal Mukund Lal Saraf (1959)
The Supreme Court held that money paid under mistake of law can also be recovered under Section 72.
Table: Types of Quasi Contracts Under Indian Contract Act
| Section | Nature of Quasi Contract | Example |
|---|---|---|
| Section 68 | Necessaries supplied to incapable person | Medicines supplied to minor |
| Section 69 | Payment by interested person | Tenant paying landlord’s tax |
| Section 70 | Non-gratuitous lawful act | Beneficial mistaken delivery |
| Section 71 | Finder of goods | Lost wallet protection |
| Section 72 | Money paid by mistake/coercion | Wrong bank transfer |
Doctrine of Unjust Enrichment
The entire concept of quasi contract revolves around unjust enrichment.
Three Conditions of Unjust Enrichment
- Defendant received benefit
- Benefit obtained at plaintiff’s expense
- Retaining benefit would be unjust
Indian courts consistently apply this principle in restitution claims.
Quasi Contract vs Restitution
Students often confuse these concepts.
| Quasi Contract | Restitution |
|---|---|
| Source of obligation | Remedy |
| Created by law | Restoration of benefit |
| Sections 68-72 | Broader equitable principle |
Important Supreme Court Cases on Quasi Contract
1. State of West Bengal v. B.K. Mondal & Sons (1962)
Recognized compensation under Section 70 where government benefited from work.
2. Kanhaiya Lal Mukund Lal Saraf Case (1959)
Money paid under mistake recoverable under Section 72.
3. Mahabir Kishore v. State of Madhya Pradesh
Supreme Court elaborated unjust enrichment doctrine.
4. Mulamchand v. State of Madhya Pradesh
Even unenforceable contracts may allow restitutionary relief..
Practical Real-Life Examples of Quasi Contracts
Example 1: Wrong Food Delivery
A restaurant mistakenly delivers food to wrong address. If recipient knowingly consumes it, payment may be recoverable.
Example 2: Accidental Online Transfer
UPI or bank transfer mistakenly sent to another account must be returned.
Example 3: Emergency Medical Treatment
Hospital treating unconscious accident victim can recover reasonable charges.
Example 4: Lost Goods
Finder of lost jewelry has legal responsibility toward owner.
Quasi Contract in Modern Digital Transactions (2026 Perspective)
With rise of:
- UPI payments
- Online banking
- Digital wallets
- E-commerce errors
Section 72 has become highly relevant in modern India.
Courts increasingly handle:
- mistaken online transfers
- duplicate payments
- accidental digital credits
- unjust online enrichment
Thus, quasi contract principles continue evolving in fintech disputes.
Judiciary Exam-Oriented Notes
Most Important Sections
- Section 68
- Section 69
- Section 70
- Section 71
- Section 72
Most Asked Topics
- Unjust enrichment
- Mistake of law vs mistake of fact
- Non-gratuitous acts
- Rights of finder of goods
Most Important Case
State of West Bengal v. B.K. Mondal & Sons
CLAT PG / UGC NET LAW Quick Revision
One-Line Revision
- Quasi contract = obligation imposed by law
- No agreement required
- Based on unjust enrichment
- Sections 68–72 ICA
- Equity-based remedy
People Also Ask
Frequently Asked Questions (FAQs)
Is quasi contract an actual contract under Indian law?
No. A quasi contract is not a real contract because there is no agreement or mutual consent between parties. It is an obligation imposed by law.
Why is quasi contract important in the Indian Contract Act?
Quasi contract prevents unjust enrichment and ensures fairness when one person receives a benefit without a valid contract.
Can money paid by mistake be recovered under quasi contract?
Yes. Under Section 72 of the Indian Contract Act, money paid by mistake or coercion can be legally recovered.
What is the most important case related to quasi contract?
One of the most important cases is State of West Bengal v. B.K. Mondal & Sons (1962), which explained compensation under Section 70.
Is quasi contract important for Judiciary, CLAT PG, and AIBE exams?
Yes. Quasi contract is a highly important and frequently asked topic in Judiciary exams, CLAT PG, AIBE, UGC NET LAW, and law school examinations.
Conclusion
The doctrine of quasi contract under the Indian Contract Act, 1872 represents one of the strongest examples of equity-based justice in Indian contract law. Although no formal agreement exists, courts impose obligations to prevent unjust enrichment and ensure fairness between parties.
For law students and competitive exam aspirants, Sections 68 to 72 are highly important both conceptually and from examination perspective. Understanding practical examples, landmark cases, and modern digital applications can significantly improve conceptual clarity and answer-writing quality.
For deeper preparation, students should also study related topics from the Law Notes hub including:
- Offer and Acceptance
- Consideration
- Capacity to Contract
- Free Consent
- Void Agreements
- Breach of Contract
- Bailment and Pledge
- Indemnity and Guarantee
