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Quasi contracts for CLAT - Practice Questions & MCQ

Edited By admin | Updated on Oct 03, 2023 03:26 PM | #CLAT

Quick Facts

  • 14 Questions around this concept.

Solve by difficulty

Read the following passage and answer the questions.

Chapter V of the Indian Contract Act avoids the term 'quasi-contract' but deals with the rights and liabilities accruing from relations resembling those created by the contract. The principle of unjust enrichment finds recognition in the Indian Law by this Chapter V. Unjust enrichment has been defined as: “A benefit obtained from another, not intended as a gift and not legally justifiable, for which the beneficiary must make restitution or recompense.” A claim for unjust enrichment arises where there has been an “unjust retention of a benefit to the loss of another or the retention of money or property of another against the fundamental principles of justice or equity and good conscience.”

It is a general equitable principle that a person should not profit at another’s expense and therefore should make restitution for the reasonable value of any property, services, or other benefits that have been unfairly received and retained. The Law Commission of India considered that the provisions made in Sections 68-72 are inadequate. English law of quasi-contract or restitution is to be made applicable in India in respect of cases that fall outside Chapter V of the Indian Contract Act. 

Like contract and tort, there must be a law for the restoration of benefits on grounds of unjust enrichment. There are many circumstances in which a defendant may find himself in possession of a benefit which injustice, he should restore to the plaintiff. Obvious examples are where the plaintiff has himself conferred the benefit on the defendant through mistake or compulsion. To allow the defendant to retain such a benefit would result in his being unjustly enriched at the plaintiff's expense and this, subject to certain defined limits, the law will not allow. Unjust enrichment is simply the name that is commonly given to the principle of justice which the law recognizes and gives effect to in a wide variety of claims of this kind.

Question: The quasi-contracts are not contracts but are given the status of contracts and remedied accordingly. What is incorrect about quasi-contracts?

 

 

Passage-VIII

Chapter V of the Indian Contract Act avoids the term 'quasi-contract' but deals with the rights and liabilities accruing from relations resembling those created by the contract. The principle of unjust enrichment finds recognition in the Indian Law by this Chapter V. Unjust enrichment has been defined as: “A benefit obtained from another, not intended as a gift and not legally justifiable, for which the beneficiary must make restitution or recompense.” A claim for unjust enrichment arises where there has been an “unjust retention of a benefit to the loss of another or the retention of money or property of another against the fundamental principles of justice or equity and good conscience.”

It is a general equitable principle that a person should not profit at another’s expense and therefore should make restitution for the reasonable value of any property, services, or other benefits that have been unfairly received and retained. The Law Commission of India considered that the provisions made in Sections 68-72 are inadequate. English law of quasi-contract or restitution is to be made applicable in India in respect of cases that fall outside Chapter V of the Indian Contract Act. 

Like contract and tort, there must be a law for the restoration of benefits on grounds of unjust enrichment. There are many circumstances in which a defendant may find himself in possession of a benefit which injustice, he should restore to the plaintiff. Obvious examples are where the plaintiff has himself conferred the benefit on the defendant through mistake or compulsion. To allow the defendant to retain such a benefit would result in his being unjustly enriched at the plaintiff's expense and this, subject to certain defined limits, the law will not allow. Unjust enrichment is simply the name that is commonly given to the principle of justice which the law recognizes and gives effect to in a wide variety of claims of this kind.

Question:

English equity law can be applied to the quasi-contract cases given under the Indian Contract Act, 1872-

Passage-VIII

Chapter V of the Indian Contract Act avoids the term 'quasi-contract' but deals with the rights and liabilities accruing from relations resembling those created by the contract. The principle of unjust enrichment finds recognition in the Indian Law by this Chapter V. Unjust enrichment has been defined as: “A benefit obtained from another, not intended as a gift and not legally justifiable, for which the beneficiary must make restitution or recompense.” A claim for unjust enrichment arises where there has been an “unjust retention of a benefit to the loss of another or the retention of money or property of another against the fundamental principles of justice or equity and good conscience.”

It is a general equitable principle that a person should not profit at another’s expense and therefore should make restitution for the reasonable value of any property, services, or other benefits that have been unfairly received and retained. The Law Commission of India considered that the provisions made in Sections 68-72 are inadequate. English law of quasi-contract or restitution is to be made applicable in India in respect of cases that fall outside Chapter V of the Indian Contract Act. 

Like contract and tort, there must be a law for the restoration of benefits on grounds of unjust enrichment. There are many circumstances in which a defendant may find himself in possession of a benefit which injustice, he should restore to the plaintiff. Obvious examples are where the plaintiff has himself conferred the benefit on the defendant through mistake or compulsion. To allow the defendant to retain such a benefit would result in his being unjustly enriched at the plaintiff's expense and this, subject to certain defined limits, the law will not allow. Unjust enrichment is simply the name that is commonly given to the principle of justice which the law recognizes and gives effect to in a wide variety of claims of this kind.

Question:

Which of the following can be safely inferred as quasi-contracts?

Read the following passage and answer the questions.

Chapter V of the Indian Contract Act avoids the term 'quasi-contract' but deals with the rights and liabilities accruing from relations resembling those created by the contract. The principle of unjust enrichment finds recognition in the Indian Law by this Chapter V. Unjust enrichment has been defined as: “A benefit obtained from another, not intended as a gift and not legally justifiable, for which the beneficiary must make restitution or recompense.” A claim for unjust enrichment arises where there has been an “unjust retention of a benefit to the loss of another or the retention of money or property of another against the fundamental principles of justice or equity and good conscience.”

It is a general equitable principle that a person should not profit at another’s expense and therefore should make restitution for the reasonable value of any property, services, or other benefits that have been unfairly received and retained. The Law Commission of India considered that the provisions made in Sections 68-72 are inadequate. English law of quasi-contract or restitution is to be made applicable in India in respect of cases that fall outside Chapter V of the Indian Contract Act. 

Like contract and tort, there must be a law for the restoration of benefits on grounds of unjust enrichment. There are many circumstances in which a defendant may find himself in possession of a benefit which injustice, he should restore to the plaintiff. Obvious examples are where the plaintiff has himself conferred the benefit on the defendant through mistake or compulsion. To allow the defendant to retain such a benefit would result in his being unjustly enriched at the plaintiff's expense and this, subject to certain defined limits, the law will not allow. Unjust enrichment is simply the name that is commonly given to the principle of justice which the law recognizes and gives effect to in a wide variety of claims of this kind.

Question: English equity law can be applied to the quasi-contract cases given under the Indian Contract Act, 1872-

 

Read the following passage and answer the questions.

Chapter V of the Indian Contract Act avoids the term 'quasi-contract' but deals with the rights and liabilities accruing from relations resembling those created by the contract. The principle of unjust enrichment finds recognition in the Indian Law by this Chapter V. Unjust enrichment has been defined as: “A benefit obtained from another, not intended as a gift and not legally justifiable, for which the beneficiary must make restitution or recompense.” A claim for unjust enrichment arises where there has been an “unjust retention of a benefit to the loss of another or the retention of money or property of another against the fundamental principles of justice or equity and good conscience.”

It is a general equitable principle that a person should not profit at another’s expense and therefore should make restitution for the reasonable value of any property, services, or other benefits that have been unfairly received and retained. The Law Commission of India considered that the provisions made in Sections 68-72 are inadequate. English law of quasi-contract or restitution is to be made applicable in India in respect of cases that fall outside Chapter V of the Indian Contract Act. 

Like contract and tort, there must be a law for the restoration of benefits on grounds of unjust enrichment. There are many circumstances in which a defendant may find himself in possession of a benefit which injustice, he should restore to the plaintiff. Obvious examples are where the plaintiff has himself conferred the benefit on the defendant through mistake or compulsion. To allow the defendant to retain such a benefit would result in his being unjustly enriched at the plaintiff's expense and this, subject to certain defined limits, the law will not allow. Unjust enrichment is simply the name that is commonly given to the principle of justice which the law recognizes and gives effect to in a wide variety of claims of this kind.

Question: The principle of unjust enrichment is an outcome of which of the following?

 

 Palak accidentally receive a package of expensive electronics meant for Disha  and Disha demand palak to return it without reimbursing palak for the shipping costs. Can palak claim restoration through quasi-contract?

 

A provides B with professional advice  during a casual conversation, and B later uses that advice successfully. Can A request payment for their advice?

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Concepts Covered - 1

Quasi contracts

What is a Quasi Contract?

  • A quasi contract is a legal concept that arises when one party receives a benefit or gains an advantage at the expense of another party, and it would be unjust for the benefiting party to keep the benefit without compensating the other. 
  • In essence, it is a legal fiction created by the courts to prevent unjust enrichment.

Key Elements and Principles of Quasi Contracts:

  • Benefit Received: The cornerstone of a quasi contract is that one party must have received a benefit or something of value from another party.
  • Unjust Enrichment: Quasi contracts are founded on the principle of preventing unjust enrichment. If one party unjustly benefits from another, the law steps in to correct this imbalance.
  • Absence of a Formal Contract: Unlike typical contracts, quasi contracts do not require a formal agreement or mutual consent between the parties. They are implied by law to remedy an injustice.

Types of Quasi Contracts:

  • Payment for Necessaries: If someone provides necessary goods or services to another person, even without their consent, the law implies a quasi contract, and the beneficiary is obligated to pay for those necessities.
  • Example: A sees B unconscious on the street and takes B to a hospital for emergency medical treatment. B recovers but didn't request the medical help. A is entitled to payment for the medical services because they were necessities.
  • Supply of Goods or Services by Mistake: When goods or services are mistakenly delivered to someone, and they are aware of the mistake, they cannot retain the goods or services without compensating the rightful owner.
  • Example: A courier company mistakenly delivers a package meant for Company B to Company A. Company A realizes the error but refuses to return the package. A quasi contract is implied, and Company A is obligated to return the package to Company B.

Importance of Quasi Contracts:

  • Quasi contracts play a crucial role in ensuring fairness and equity in contractual relationships.
  • They prevent individuals from taking advantage of situations where they have received benefits at the expense of others.
  • Quasi contracts align with the principles of justice and good conscience, which are fundamental in contract law.

Additional Considerations:

  • Quasi contracts are a legal tool used by courts to correct unjust situations, ensure fairness, and uphold the principles of equity and justice.
  • They are a crucial aspect of Indian Contract Law, as they prevent individuals from taking advantage of others' misfortune or mistakes.
  • Understanding quasi contracts is essential not only for legal practitioners but also for individuals to recognize when they have an obligation to compensate another party even in the absence of a formal contract.

Case Law Example : Ramanathan Chettiar vs.  Chettiar (1968):

Background

  • In the case of Ramanathan Chettiar vs.  Chettiar, the dispute involved the recovery of money paid under certain circumstances where it would be unjust for one party to retain the money.

Key Facts

  • The plaintiff, Ramanathan Chettiar, had paid money to the defendant, another Ramanathan Chettiar, due to a mistake or some unjust circumstance.

Legal Issue

  • The central issue in this case was whether the defendant should be allowed to retain the money paid by the plaintiff under circumstances that made it unfair or unjust for the defendant to keep it.

Court's Decision and Significance

  • The Supreme Court of India, in its judgment, reinforced the principle that the law should prevent unjust enrichment.
  • In this specific case, the court applied the concept of quasi contracts. It implied a quasi contract to rectify the unjust situation. The defendant was obligated to return the money to the plaintiff because it would be against the principles of justice and good conscience for the defendant to retain it.
  • This case serves as an example of how the concept of quasi contracts is used in Indian jurisprudence to ensure fairness and prevent one party from unjustly benefiting at the expense of another.
  • It reaffirms the importance of equity and justice in contractual relationships, even when there is no formal contract in place.

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