anything in consideration for the same. Their purpose is to prevent what is called unjust enrichment and to ensure the correlating entitlement of every party according to the principles of justice and equity.

Origin and Historical Development of Quasi-Contract

Quasi-contract is a medieval creature, and it represented a legal practice of that period under the name of indebitatus assumpsit. The courts would require a defendant to pay the plaintiff a certain quantity, to be determined by the court, as if a contract obligation had created an obligation between them. Indebitatus assumpsit was a remedy for restitutionary obligations, imputing to the defendant consent to be bound by a contractual obligation to pay.

Essential Characteristics of Quasi-Contracts:

A. Nature of Claim: A quasi-contractual claim is, first and foremost, a claim for money, usually for a liquidated amount.

B. No Agreement: The claims do not flow from any agreement, express or implied, between parties, but are created by intervention of the court.

C. Not In Rem: They are only binding on particular persons and not on the whole world, in this respect being similar to rights under contract.

Requirements of Quasi-Contract

The factors a judge must consider in deciding a quasi-contract are outlined as follows:

1. Parties: There has to be an identifiable claimant recognized by the law, and a defendant who is in default and liable for the claimed restitution.

2. Acknowledgment by the Defendant: The defendant shall acknowledge the worth of the product or service in question but failed to return the same, pay for, or take other steps to redress the situation.

3. Wrongful Enrichment: The claimant needs to prove that a wrongful enrichment of the defendant has taken place by the occurrence.

Conceptual Basis of Quasi-Contractual Liability : Quasi-contractual liabilities are primarily based on two legal principles:

- Implied Contracts
- Unjust Enrichment

The instances of quasi-contracts are specifically enumerated in the Indian Contract Act, 1872, under sections 68 to 72. They arise irrespective of a valid contract as the contractual liability is impliedly enacted by law owing to special circumstances.

Supply of Necessaries Section 68

Section 68 of the Indian Contract Act deals with claims for necessaries supplied to persons who cannot contract for themselves, for example, a minor or a person of unsound mind. Though the minor's agreements are void ab initio and he cannot be personally bound for the debts contracted, still his estate may be jerked for the necessaries supplied, under Section 68 of the Indian Contract Act. It has been held in Sarbijit Singh vs. Harbhajan Singh that reimbursement in respect of the necessaries may be claimed from the estate of property of the minor but not by a personal action against him.

Definition of Necessaries

"Necessaries" does not mean merely the bare essentials like food and shelter; it also covers things needed to keep a person in their station and condition. Luxuries are probably always excluded, but things that represent a useful amenity though considered luxurious may be necessaries in given situations. It is also a requirement that the minor or incapable person should not already have an adequate supply of the type of necessaries under consideration.

Examples of things considered necessaries includes :

- tracing cycle for a minor apprentice,
- expenses incurred for the funeral rites of a minor's father,
- housing provided to a minor for living and continuing education, wedding presents for a minor bride,
- funds advanced for defending criminal proceedings.

Payment by an Interested Person - Section 69

Section 69 of the Indian Contract Act deals with the recompense of a person who pays money that another is legally bound to pay, and in which the payer has an interest.

Any person who has an interest in the payment of money which another is legally bound to pay, can compel him to pay it. For instance, where a party contracts to buy certain mills and with a view to preventing the property comprised therein from being sold under a distress for overdue municipal taxes, pays the amount due, he can sue the seller for the amount paid by him.

Conditions for liability Under Section 69:

- -The payer should have an interest in making the payment. Similarly, it is not necessary that the payer must have a legal proprietary interest in the property related to the payment.
- -That the payer must not be personally obligated for any payment but he should have a vested interest in making the payment so as to safeguard his interest .
- -That the obligor defendant must have a legal duty to make a payment.
- -The payment should have been made to another person, not to oneself.

Liability of Person to Whom Benefit of Non-gratuitous Act is Accorded- Section 70

Section 70 of the Indian Contract Act lays down that the following conditions should be fulfilled if the section is to apply:

- A person lawfully does something for another or delivers something to them.

- The act is not done gratuitously; the person making it expects compensation or a return benefit.

- The benefit of the service or deliver shall accrue to the person for whom the service is rendered or the thing is delivered.

Duty of Finder of Goods - Section 71

According to Section 71, any person who finds the goods of another and takes them into his custody becomes subject to all the liabilities of a bailee, that is, keeping the same safely until he returns the said goods to the owner.

Liabilities of Person Receiving Money or Goods by Mistake or Coercion - Section 72

Section 72 of the Indian Contract Act lays down that a person who receives money or goods owing to mistake or coercion is liable to repay or return the same to the owner.

Difference between contracts and quasi-contracts

1. Formation:

- -Contracts: Contracts are constituted by the mutual agreement of parties to the contract; there has to be an offer and its acceptance, with consideration, that is, something of value is exchanged, and the object is lawful.

- -Quasi-Contract: A quasi-contract is not constituted by mutual consent. It's rather imposed by law upon people to avoid unjust enrichment. They come about in cases where one party derives a benefit at the cost of another with no actual contract between them.

2. Basis of Obligation:

- Contracts: In a contract, the obligations are those which are under the agreement of the parties. The parties willingly accept as to what duties and responsibilities they undertake in view of a contract.

- Quasi-Contracts: The obligations of the quasi-contracts are imposed by law, irrespective of the intention of the parties. They are based upon the propositions of equity and fairness, which require that one should not be enriched at the expenditure of another.

3. Nature of Relationship:

- Contract: It is a legal relation established by free agreement of parties, which mutually confers rights and imposes reciprocal duties. The terms and conditions are settled by the parties themselves.

- Quasi-Contract: There is no preceding relation or agreement between parties. The relation arises from operation of law to remedy the situations in which otherwise one person would be unjustly enriched.

4. Enforcement and Remedies:

- Contracts: A breach of contract grants the wronged party either specific performance or damages, as agreed. The basic remedies are pegged on the terms of the contract and the doctrines of the law of contract.

- -Quasi-Contracts: Unjust enrichment is that a party wronged by a quasi-contract may seek the award of restitution or damages to ensure that the other party does not retain benefits that were acquired unfairly. The relief is provided equity and upon the doctrine of unjust enrichment.

5. Voluntariness:

- -Contracts: A contract is an agreement made freely between two parties that are competent to contract. The words are bargained for and the parties may choose to take them or leave them.

- -Quasi-Contracts: Formation of quasi contracts is involuntary and occurs independent of consent of parties. It is implied by law for the simple reason to avoid unjust result and for fairness.

In other words, as the contract is a voluntary agreement creating legal obligation based on mutual consent or will, the quasi-contract refers to legal remedies imposed by courts of law in order to correct an unjust situation wherein one party benefits without any contractual basis unjustly at the cost of the other.

Quasi-contract vs Contract - Key Differences and Examples

Quasi-contract and real contract both have their existence in law to create both obligations and remedies but under different circumstances and different objects. Following are the ways how courts differentiate between the two and some examples to depict the same.

1. Quasi-Contract

Definition: Imposed on parties by law, a quasi-contract is raised because it is the only remedy to avoid unjust enrichment. It is entered into in the event that something is gained at the expense of another party without entering a formal agreement.

Key Characteristics:

- No Formal Agreement: There does not really exist an agreed element or mutual agreement between the parties.

- Imposed by Law: The obligations are created by the court to address unfair situations and avoid unjust enrichment.

- Purpose: To restore fairness by requiring the unjustly enriched party to return the benefit or compensate the other party.

Examples:

- Mistaken Payment: If you accidentally pay someone ₹10,000 for a service that was not performed, the recipient must return the money because keeping it would be unjust enrichment. This is a quasi-contract situation.

- Necessities Supplied to a Minor: If necessaries are supplied to a minor, then he must pay for it. The supplier can get compensation from the minor's estate. The liability is not based on contract but on the doctrine of restitution.

2. Contract

Definition: Contract is a formal, legally binding agreement between two or more parties by which each party agrees to perform certain duties or provides requested goods or services in exchange for a valuable consideration.

Key Characteristics:

- Formal Agreement: The parties agree upon and gives their mutual consent.

- Legally Enforceable: In a valid and legalized manner, the agreement is legally acceptable, and all the parties are bound by the agreement's terms.

Objective: To provide enforceable sanctions founded on the agreed terms and to set out remedies for the infraction of such terms.

Examples: Service Contract: Suppose you give a contractor an advance of ₹50,000 to renovate your house. The contractor would be under an obligation, in law, to renovate your house. If they did not, you could file a suit for breach of contract to claim the money due to you under the contract, or for damages.

Purchase Agreement: When you purchase a car from a dealer, there is a standing obligation to deliver the car in the promised condition. If they fail to deliver, you can either claim for damages or pursue specific performance under the contract act.

Court Distinction - Distinction of courts of quasi-contracts and contract is based on the following factors:

Mutual Agreement:

- Contract: Complete from mutual consent and terms agreed upon.

- Quasi-Contract: Imperfect from imposition by the law sans mutual consent.

Legal Justification:

- Contract: Formal agreement duly enforced by the law and governed by principles of contract.

- Quasi-Contract: A situation arising due to taking advantage of equity to prevent possible unjust enrichment falls under sections 68-72 of the Indian Contract Act, 1872.

Purpose of Remedy:

- Contract: A contract seeks to enforce the terms that were agreed upon and remedy if there's been breach.

- Quasi-Contract: Through quasi-contract, an element of fairness that seeks to remedy situations where a party benefits unjustly at the expense of another without actual agreement is enforced.

Quasi-Contract vs. Tort:

Under Indian law, both quasi-contracts and torts find a place primarily in cases relating to benefit accruing to one at the expense of another. They do so in entirely different ways. In the section that follows, an analysis of the overlap between quasi-contract and tort, especially on the issue of unjust enrichment, will be covered.

1. Quasi-Contract

Definition: Quasi-contract is not a contract in reality but a creation of the courts, which aims at avoiding unjust enrichment. It occurs when a person derives some benefit from another's act or property without any agreement, and it would be unfair for such person to retain the benefit thereby derived without making compensation in a reasonable manner for the other party.

- Key Example: If you are sent a package that somebody else was meant to have, for instance, your neighbour, then obviously, you will be expected to return the package since by keeping it, you would be unjustly enriching yourself at his or her cost. Therefore, this situation clearly falls under quasi-contract law.

2. Tort Law

- Definition: The law of tort refers to a body of civil wrongs whereby the action of one person causes loss or damage to another and is punishable in law. Unlike quasi-contract, tort is an act which does not have to result from an agreement or both parties' beneficence but compensation for harm or loss arising out of wrongful actions.

- Leading Case: You can sue for damages under the law of tort if your property has been damaged by the negligence of another. In this case, it is the compensation to the grievance that is important and not the transfer of benefit.

Overlapping Between Quasi-Contract and Tort

- Unjust Enrichment: Situations where somebody becomes unjustly enriched at the expense of another are redressed under both quasi-contracts and torts. For instance, when a person mistakenly comes into possession of your property, that clearly is a situation of quasi-contract. At the same time, that person will be unjustly enriched. On the other hand, if it is somebody's carelessness that causes loss or damage to the property, he or she will have to pay damages.

- Legal Remedies: In both, the basic purpose is to render justice to the aggrieved party. In the case of quasi-contract, the usual remedy is to restore the benefit or compensate for the loss incurred. In the case of tort, it is monetary compensation against damage caused.

- Approach Differences:

- Quasi-Contract: It aims at preventing unjust enrichment and usually involves some kind of benefit passing or mistake.

- Tort: Focuses on compensating for harm or loss caused by wrongful actions, regardless of whether a benefit was involved.

Under the Indian Contract Act, 1872, quasi-contractual claims come under the head of "quasi contracts," that is, circumstances wherein no contract, in fact, comes into existence. However, the law enforces liabilities resembling those coming out of a contract to avoid unjust enrichment. The remedies under quasi-contractual claims available in Indian law include restitution, damages, and equitable relief. Here's a detailed discussion:

1. Restitution

Restitution is considered a primary remedy in cases of quasi-contractual claims. Under this principle, no person should benefit from the other's enrichment. The aspect of restitution under Indian law is the following:

Restitution: Where there is a transfer of a benefit or property of one person to the other without justified enrichment, the law insists that the enriched party must return the benefit to the person who conferred it in the first place. For example, if money is mistakenly transferred from one to the other, then the person to whom the money has been sent is required by law to return the same to the sender.

- Legal Basis: The Indian Contract Act, 1872, specifically deals with the quasi-contracts under Sections 68 to 72 and lays down principles of restitution. Section 68 provides for restitution of benefits received under a mistake, while Section 69 deals with the recovery of money paid for necessities supplied to a minor or other incapable persons. Section 70 and 72 deal with cases of non-gratuitous acts and recovery of benefits respectively.

2. Damages

While the principal operation of the concept of restitution concerns the return of the benefit conferred, the awarding of damages compensates the aggrieved party for some loss sustained as a consequence of the quasi-contractual obligation. The Indian Contract Act says :

- Compensatory Relief: This is whereby the aggrieved party receives damages to compensate for the loss incurred. For instance, if goods are provided to a minor who cannot pay for them, the supplier may claim damages from the minor's estate. This is to ensure the supplier is compensated for the cost incurred in providing the goods.

- Assessment of Damages: The quantum of damages is calculated on the basis of actual loss incurred by the claimant. The general rule here is that damages should be adequate to put the wronged party in the position they would have been if the quasi-contractual obligation had been duly complied with.

3. Equitable Remedies

Equitable remedy is a discretionary remedy awarded by the courts either in addition to, or instead of, damages. It is designed for the situation where the two classic remedies—restitution and damages—are proved inadequate or inappropriate. Equitable relief in quasi-contractual claims:

- Specific Performance: Although this equitable remedy is more appropriately connected with contracts, specific performance may, at times, be ordered in cases of quasi-contract where restitution or damages do not really adequately redress the injustice.

- Injunctions: The court may issue injunctions directed at preventing a party from doing certain acts that may lead to further unjust enrichment or harm to the aggrieved party.

- Constructive Trusts: In cases where property has been transferred under a mistaken belief or without consideration, courts may impose a constructive trust, which requires the recipient to hold the property for the benefit of the rightful owner.

The doctrine of quasi-contracts under the Indian Contract Act, 1872, operates to adjust situations where formal contractual relationships do not exist but wherein legal obligations have to be imposed to prevent unjust enrichment. Though the doctrine is posited to ensure fairness and justice, it has been followed by some criticisms with regard to its application and conceptual clarity. Here are some possible criticisms concerning the doctrine of quasi-contracts in the Indian legal context:

1. Uncertainty in Operation

- One of the main criticisms against the doctrine of quasi-contract is its inherent uncertainty. Under the concept of quasi-contracts, much reliance is laid on the principle of preventing unjust enrichment, which is somewhat vague and open to interpretation.

- Lack of Clear Standards: There is no exhaustive definition for unjust enrichment within the ambit of the Indian Contract Act, 1872; hence, situations arising from the application of this doctrine become quite arbitrary in terms of when and how such quasi-contractual obligations are to be applied. The courts have to base their decisions on case laws and judicial interpretations, sometimes rendering divergent applications of the doctrine.

- Judicial Discretion: It is highly dependent on judicial discretion to apply the quasi-contractual remedies. This may give rise to variable decisions and hence is hard for the parties to deduce, or even ascertain one's right and responsibilities.

2. Ambiguity in Defining "Unjust Enrichment"

- At the very heart of quasi-contracts lies the doctrine of prevention of unjust enrichment. The principle itself as applied is quite difficult to define and administer:

- Ambiguity of "Unjust Enrichment": The very term "unjust enrichment" is at times ambiguous. It usually connotes a situation whereby one party is deriving an advantage at the expense of another in a manner judged to be inequitable, but it is precisely what is connoted by "unjust" that may vary from case to case and from judge to judge and hence remain imprecise.

- Case-by-Case Basis: It is often in the detailed analysis of the facts and circumstances of each case that the courts determine whether enrichment is unjust or not. A case-by-case approach such as this may make legal predictability difficult and possibly lead to uneven justice.

3. Challenges in Proving Quasi-Contractual Claims

The second criticism lies in the practical difficulty involved in proving quasi-contractual claims:

- Evidence Requirements: Building a prima facie case that unjust enrichment occurred, and that it ought to be remedied, can be quite complex. The jurisprudence contains several instances in which claimants have been required to bring onerous amounts of detailed evidence to prove the two-stage inquiry; first, that a benefit was conferred, and secondly, that the enrichment was unjust. This requirement can be onerous, and there is the potential that some parties may not pursue otherwise perfectly meritorious claims because of this burden.

- Reluctance of Courts: There is also the factor of the reluctance on the part of the courts to take up cases of quasi-contracts, which involve complicated claims and thus opening up the possibility of multiple meanings of unjust enrichment. This reluctance would result in underuse of the doctrine, leaving some parties remediless.

4. Overlapping with Law of Contract

- The doctrine of quasi-contract overlaps with the law of contract. This is criticised:

- Risk of Duplication: A lot of the situations covered by quasi-contractual claims are such that they could, equally well, fall under traditional principles of contract law. This invites duplication and obscurity as to which kind of action should lie in a given case.

- Diminished Distinction: The line of demarcation between quasi-contracts and contracts gets dim if not blurred, particularly in the case of informal agreements or agreements implied in the course of conduct. Thereby, it may further raise uncertainty and complexity in choosing the correct legal remedy.

5. Equity vs. Strict Legal Principles

- The doctrine of quasi-contracts is based on equitable considerations, which may, at times, be at variance with strict rules of law:

- Equitable Flexibility: Equity tends to deal with the question of what is fair, but its flexibility often puts it at variance and in conflict with clearly defined legal principles. This tension may be prone to unpredictable outcomes and probable inconsistencies in the general legal framework.

- Legal Certainty: This reliance on the principles of equity is likely to undermine the predictability and certainty that the rigorously applied legal rules bring about, hence affecting the needs of parties by way of clear and consistent legal guidance.

CASE LAWS

State of Madhya Pradesh v. Bhailal bhai (1964)

In the case of State of Madhya Pradesh v. Bhailal bhai, the Supreme Court, in 1964 interpreted Section 72 of the Indian Contract Act, 1872, relating to refundability of sales tax paid under a mistake. The ruling went that once the public authority receives money which was paid under a mistake of law, the said authority is bound by law to refund the money. The respondent paid the tax in question on account of a mistaken understanding of law.

Moses v. Macferlan

In the case of Moses v. Macferlan, Lord Mansfield expounded the underlying principles of Quasi-Contractual obligations. He observed that the law as well as justice should intercede in order to avoid unjust enrichment, where one person benefits at the cost of another or retains money or benefits accruing from another person in such manner as is considered unconscionable as being retained.

Sales Tax Officer v. Kanhaiya Lal Sara

It was held by the Supreme Court in Sales Tax Officer v. Kanhaiya Lai Sara that every payment made under a mistake, whether factual or legal, is recoverable without any limitation under Section 72 of the Indian Contract Act. In that case, a firm had paid the sales tax liability under the UR Sales Tax laws for forward transactions. Subsequently, the Allahabad High Court decided that such laws were ultra vires. The Supreme Court, however, held the firm's right to recover the amount it had wrongfully paid as tax.

Conclusion

Quasi-contract may thus be summed up as a form of legal redress whereby a party is enabled to recover, in money or in kind, from another who has been unjustly enriched. It is a judicially imposed remedy for the prevention of unjust enrichment, as opposed to an actual contract. The principles of quasi-contracts are based on fairness and equity, applied ubiquitously in situations where a party has gained a benefit for which he has not given adequate consideration, and restitution is mandated.

• Quasi-Contract vs. Contract: Include examples of how courts differentiate between the two.

• Quasi-Contract vs. Tort: Discuss the overlap between quasi-contract and tort law, particularly in cases of unjust enrichment.

Address potential criticisms of the doctrine of quasi-contract, such as its uncertainty and the difficulty in defining "unjust enrichment."

Discuss the available remedies for quasi-contractual claims, including restitution, damages, and equitable relief.