Quasi Contracts: Definition, Types, Examples & Legal Implications

Quasi Contract

Edited By Ritika Jonwal | Updated on Jul 02, 2025 05:35 PM IST

A Quasi contract is a type of contract under which a party to the contract compensates the other party who has sustained loss or injury. Contract according to the Indian Contract Act 1860 means a mutual agreement between two parties. This agreement consists of promises liabilities and obligations which both parties must perform to a contract to make the discharge of the contract successful. A contract formed through mutual agreement and the parties to the contract are competent to contract is a legal contract, and a legal contract is enforceable by law. Both parties to a contract are bound by the law to perform all the promises made in an agreement, but non-performance leads to a breach of contract. Students can read all the subtopics for a deep understanding of Contract Law.

This Story also Contains

Essential Conditions to be fulfilled for a contract:
Meaning of Quasi-Contract
Working in a Quasi-Contract
Elements of a Quasi-Contract:
Landmark cases on Quasi-Contract
Different types of quasi-contractual obligations:
Difference between quasi-contract and contract
Conclusion

Quasi Contract

A contractual obligation arises in the following way, as mentioned under

Through an agreement or contract
Through the standard form of contract
Through a promise of Estoppel

Also Check,
Remedies for Breach of Contract
Contingent Contracts
Labour laws and Constitution of India
What are Intellectual Property Rights

1. Through agreement or contract

An agreement between two parties leads to a Contract. When two parties to a contract mutually agree to perform their duties and obligations it leads to a legal contract which is enforceable by the law. A contract is mutually negotiated and both parties to the contract are competent enough to come into an agreement or contract forms a legally binding contract and can be enforceable by law or the parties can be bound to perform the obligations made in a contract.

2. Through the standard form of contract

There are contracts which are pre-drafted and the pre-drafted contracts are easy to use for a contractual agreement. Companies and organizations have to go through many negotiations, agreements and contracts. So, it becomes impossible for a company to draft a new contract every time they enter into a contract with the companies. However, standard forms of contract are used to make the drafting process more efficient and time-saving.

3. Through a promise of Estoppel

According to the doctrine of Estoppel, there are some negotiations which do not form a contract or agreement and cannot be called a Contract in the strict meaning. Such type of failed contracts consists of promises between two parties which are obliged to be performed even if there is no such contract between two parties.

Essential Conditions to be fulfilled for a contract:

For the formation of a valid contract, there are some essential conditions which must be fulfilled, they are given below-

There must be two parties to an Agreement. And there should be valid acceptance and offer between the two parties.
Both the parties entering into the contract should be competent enough to enter into a contract.
In a valid contract, there should be law full consideration and a lawful object.
Free consent is essential for a valid contract. Neither party to a contract should be forced.
The contract will be termed invalid when the contract is expressly declared to be invalid in the initial process of the agreement.

Meaning of Quasi-Contract

Quasi is derived from the Latin word ‘Pseudo’ which means ‘as if’ or ‘almost’. Quasi-contracts are a contract that is a dispute resolution clause for the parties who are in a dispute. The Quasi-contract means helping the parties find an alternative way in cases when the parties are not in a contractual relationship. Quasi-contracts are based on the values of Justice, equity and good conscience.

We know that for a valid formation, certain essential elements must be fulfilled like an offer, acceptance, a mutual agreement, competency of the parties to a contract, lawful objects, etc. Quasi-contracts come into existence when the basic essential elements of a contract are missing Quasi contract is inspired by the maxim,” No man must grow rich out of another man’s loss.” which means that a party to a contract shouldn’t earn profit out of the loss of another party to a contract. And a Quasi contract is legally enforceable by law.

Quasi-Contract Example- If M receives a parcel that belongs to A, M has a legal duty to return it to A. A is entitled to sue M if he consumes all of the contents of the package for himself. In that scenario, quasi-contract law allows the court to force M to compensate A.

Working in a Quasi-Contract

In a quasi-contract, neither party the contract shows interest in coming into a contract; there are no mutual negotiations or mutual contract between the two parties. Under such a contract which is not usually a valid contract both the parties to the contract try to acquire profit by the loss sustained by the other party to the contract. The quasi-contract is legally enforceable by law.

The quasi-contract acts as a remedy to the party who sustained the loss. The quasi-contract makes the other party liable to pay compensation to the party who has sustained loss.

A quasi-contract works on the principles of justice, equity and good conscience. A quasi-contract is enforceable by the law and the plaintiff files a suit in the court under the provisions of the quasi-contract for compensation against the loss incurred because of the unjust and unfair practices of the other party in a contract. A Supreme Court judgment on such a case is delivered by looking at the agreement of the two parties. On the court finding out that there was no such contract between the two parties, the remedies provided under the quasi-contract are laid down. Students can also read plaintiff himself is a wrongdoer in detail for a better understanding.

Elements of a Quasi-Contract:

The Important elements to form a quasi-contract are given below-

Doctrine of enrichment
Enrichment of defendant’s
The plaintiff should have incurred a loss
No intention to form a contract between the two parties

1. Doctrine of enrichment

The Doctrine of Enrichment in a quasi-contract means when a party has earned a profit on the loss sustained by the other party and there is no mutual agreement or contract between the parties. These circumstances usually occur when one party to the contract fails to perform the promises made.

2. Enrichment of defendants

The quasi-contract is mostly used when one party faces loss due to the non-performance of the other party to a contract. When one party earns profit on the Damages or loss sustained by the other party the quasi-contract comes into effect.

3. The plaintiff should have incurred a loss

To establish a quasi-contract one party or the Plaintiff must have incurred a loss because of the non-performance of the contract by the other party.

4. Non-intention to form a contract between the two parties

The main difference between an absolute contract and a quasi-contract is that in an absolute contract, both parties come into a contract through mutual negotiations and agreements whereas in a quasi-contract both parties lack the intention to come into a contract. In such circumstances when both the parties are not in a mutual agreement and the other party sustains loss the provisions of quasi-contract are used.

Also Check,
Free consent
Anticipatory and actual BOC
Doctrine of privity of contract
Undue Influence

Landmark cases on Quasi-Contract

In the case State of Rajasthan vs Basant Nahahta (2019)

In this case, the Rajasthan High Court held that the provisions of a quasi-contract come into effect when one party make a payment on behalf of another party to the contract voluntarily or involuntarily with obligations or without obligations. In such circumstances, the party who has made the payment is entitled to compensation as given under the provisions of the quasi-contract.

In the case of Kailash Nath Associates vs DDA (2015)

In this case, the Delhi High Court ruled When either party to a contract performs the duties and obligations and services in the circumstances when the other party is absent and in return earns profit then the party who has performed the duties and obligations are entitled to receive compensation under the provisions of the quasi contract.

Different types of quasi-contractual obligations:

The types of Quasi-judicial obligations are incorporated under Chapter 5 (Section 68 to Section 72) of the Indian Contract Act, of 1872.

Section 68- The delivery of goods by persons incompetent to form a valid contract-

According to Section 68 of the Indian Contract Act 1872, a person who is not competent to enter into a contract for reasons such as a person of unsound mind, a minor, or a person lawfully constrained from entering into a contract is competent enough to deliver the supply of goods and is also entitled to payment for the supply of goods of services provided.

For example- A is a person who is a minor and supplies goods or provides a service to B. Even if A is a minor if he has delivered the goods or provided the services then according to section 68 of the Indian Contract Act 1872, A is entitled to reimbursement from B

Section 69- the payment is done on behalf of another person-

Section 69 of the Indian Contract Act 1872 lays down that when a person makes a payment on behalf of another person to discharge the debt that has been incurred upon another person with the interest to protect the rights of the person who is in debt. In such circumstances, the person who made the payment to Discharge of Contracts the debt of another person to protect his right is entitled to reimbursement under section 69 of the Indian Contract Act 1872.

For Example: A took some debt from B due to a financial crisis which A is facing and A fails to pay the debt to B. C a friend of A pays the debt on A’s behalf and has discharged the debt. Now, C is entitled to reimbursement under section 69 of the Indian Contract Act 1872.

Section 70- profit earned from a non-gratuitous act-

Section 70 of the Indian Contract Act 1872 lays down that when a party earns profit from another party’s non-gratuitous act then it becomes liable for the party to compensate the other party who has performed the duties or obligations or provided the services under section 70 of the Indian Contract Act 1872.

For example- A parks his car in the shade down a tree and when a severe storm comes it damages the car that was parked in the shade. B is a neighbour to A and being a good neighbour B on witnessing the damages done by the tree removes the tree in such circumstances, A enjoys the non-gratuitous act of B and there was no agreement between A and B to save the car from the storm so now A is entitled to pay a reasonable amount to B for hid non-gratuitous act.

Section 71- Obligations on finder of goods

According to Section 71 of the Indian Contract Act 1872 a person finds the goods and takes custody of the certain goods, the person not being the owner of the goods and the goods are owned by someone else which he does not know of. In such a case it is the responsibility of the finder of the goods to take good care of the goods until it is delivered to the actual owner of the goods. The founder of the goods is also obliged to return the goods to the owner rightfully without any damage to the goods found. While the goods were in the custody of the founder any damage was done to the goods then he was liable to compensate the owner of the goods.

For Example- A finds a golden ring in the streets, and A takes custody of the ring while the owner of the ring is not known to A. Now, A has to take good care of the ring until the rightful owner of the ring is found. And if any damages are incurred to the ring while it was in the custody of A then A will be liable to compensate B the rightful owner of the ring if any damages are incurred to the ring.

Section 72- Payment done by mistake or Coercion in Contract Law

According to section 72 of the Indian Contract Act 1872 When a person by mistake or coercion delivers any goods or makes any payment to another person then the person who has received the goods or received the payment is obliged to return the goods or the goods to the rightful owner or the transferer without damaging it. If the goods get misplaced or the paid amount is spent then the person who has received the goods or received the payment is liable to compensate the owner.

For example: A who intends to pay an amount to B mistakenly pays it to C. After A gets to know that he made a mistake by transferring the amount to C he informs B to pay back his money. In such circumstances, B must pay back the money to A.

Difference between quasi-contract and contract

The Quasi-contract is a contract under the Indian Contract Act 1872, which is similar to a normal contract but leaves some differences. The below given table mentions the differences between Quasi-contract and contract.

S.No.	Quasi contract	Contract
1	A quasi-contract is Not a real contract	A contract is a mutual agreement between two or more parties that forms a valid contract
2	In a quasi-contract, there is no agreement between the two parties	In a contract, there’s always agreement between two parties
3	The consent of the parties is not fundamental in a quasi-contract	In a contract Parties consent is fundamental it shouldn’t be done forcibly
4	In a quasi-contract, there is no contract in operation is needed to conduct it	The contract is important for its conduct in an absolute contract
5	A quasi-contract is only implied by law.	A contract can be expressed or implied
6	In a quasi-contract, the judge implies the obligations	In a contract, the parties to the agreement imply the agreement.

Conclusion

The quasi-contracts are a tool for the court to provide justice and to prevent unlawful and unjust enrichment of a party's benefits from the expenses incurred by another party. The concept of quasi-contract is based on the values of justice, equity and good conscience. The concept of quasi-contract is drafted under sections 68 to 72 of The Indian Contract Act 1872.

With passing time and trends the provisions given under the quasi-contract have become very important for the seekers of justice and also the corporates, banks and businesses to save themselves from such unjust enrichment.

Frequently Asked Questions (FAQs)

1. What is a Quasi-Contract?

An obligation imposed by law to prevent unjust enrichment is known as a quasi-contract. This is also known as a constructive contract or an implicit contract under the law.

2. What is a Quasi-Contract?

A quasi-contract is a legal concept where a court imposes obligations on parties as if they had a contract, even though no formal agreement exists. It's based on the principle of unjust enrichment and aims to prevent one party from unfairly benefiting at another's expense.

3. What is the role of consent of parties in quasi-contracts?

This is the most unique and fundamental principle of a quasi-contract is that there is no mutual consent between two parties in a quasi-contract.

4. What are the different Kinds of quasi-contracts?

The different Kinds of quasi-contracts are:

The delivery of goods by persons incompetent to form a valid contract-
the payment is done on behalf of another person
profit earned from a non-gratuitous act
Obligations on finder of goods
Payment is done by mistake or coercion

5. Difference between contract and quasi- contract?

A quasi-contract is a settlement that mimics a contract, whereas a contract is a real agreement between two or more parties. In a quasi-contract, neither party's consent is required; in a contract, both parties freely provide their consent.

6. What is Quasi Contract in Business Law?

A quasi-contract is a legal requirement in business law that forbids one party from unfairly profiting from another. It is sometimes referred to as a constructive contract or an implicit contract under the law. When one party gains something at the other's expense, a judge may issue a retroactive judgment known as a quasi-contract to address the situation.

7. How does a quasi-contract differ from a regular contract?

Unlike a regular contract, a quasi-contract is not formed by mutual agreement between parties. Instead, it's imposed by law to prevent unjust enrichment. There's no offer, acceptance, or consideration involved, which are essential elements of a regular contract.

8. What is the primary purpose of quasi-contracts?

The primary purpose of quasi-contracts is to prevent unjust enrichment. They ensure fairness by requiring a party who has received a benefit to pay for it, even in the absence of a formal agreement.

9. What is unjust enrichment in the context of quasi-contracts?

Unjust enrichment occurs when one party unfairly benefits at the expense of another without legal justification. In quasi-contracts, it's the basis for imposing an obligation on the enriched party to compensate the other party.

10. Are quasi-contracts actually contracts?

No, quasi-contracts are not true contracts. They're legal fictions created by courts to prevent unjust enrichment. The term "contract" is used because the obligations imposed are similar to those in a contract, but they arise from law rather than agreement.

11. Can quasi-contracts be formed between family members?

Yes, quasi-contracts can be formed between family members, but courts are often hesitant to impose them in familial situations. They typically assume that services provided within a family are done out of love and affection rather than with the expectation of payment.

12. Can a quasi-contract be formed if one party explicitly refuses to pay for goods or services?

Generally, no. If a party explicitly refuses to pay for goods or services before receiving them, a quasi-contract usually won't be imposed. The law assumes that the providing party was aware of the risk and chose to proceed anyway.

13. Can you give an example of a situation where a quasi-contract might be applied?

A common example is when someone mistakenly receives goods or services they didn't order. If they use or benefit from these, a court might impose a quasi-contract requiring them to pay for the benefit received, even though they never agreed to do so.

14. What is quantum meruit and how does it relate to quasi-contracts?

Quantum meruit, meaning "as much as deserved," is a legal principle often associated with quasi-contracts. It refers to the reasonable value of services provided when there's no formal agreement on price. Courts may use quantum meruit to determine the amount owed in a quasi-contractual situation.

15. What's the difference between an implied-in-fact contract and a quasi-contract?

An implied-in-fact contract is a true contract inferred from the parties' conduct, where their actions suggest they intended to form an agreement. A quasi-contract, on the other hand, is not a true contract and is imposed by law regardless of the parties' intentions.

16. Can a quasi-contract override a valid express contract?

No, a quasi-contract cannot override a valid express contract. If there's an existing valid contract between parties, the terms of that contract will govern their relationship, and a court won't impose a quasi-contract.

17. What are the key elements required for a quasi-contract?

The key elements for a quasi-contract are: 1) A benefit conferred upon the defendant by the plaintiff

18. Can a quasi-contract be formed if the benefit was conferred by mistake?

Yes, quasi-contracts can be formed when benefits are conferred by mistake. In fact, this is a common scenario for quasi-contracts, as the law seeks to prevent unjust enrichment even when the benefit was unintentionally provided.

19. What role does equity play in quasi-contracts?

Equity plays a crucial role in quasi-contracts. These obligations are imposed based on principles of fairness and justice to prevent unjust enrichment. Courts use their equitable powers to create these obligations when strict application of contract law would lead to unfair results.

20. How does the concept of voluntariness affect quasi-contracts?

Voluntariness is important in quasi-contracts. If a party voluntarily confers a benefit without expectation of payment, a court is less likely to impose a quasi-contract. The law generally doesn't require payment for unsolicited benefits freely given.

21. Can quasi-contracts be applied in emergency situations?

Yes, quasi-contracts are often applied in emergency situations. For example, if a doctor provides emergency treatment to an unconscious person, a quasi-contract might be imposed to ensure the doctor is compensated for their services.

22. What is the significance of "acceptance" in quasi-contracts?

In quasi-contracts, "acceptance" refers to the retention or use of benefits by the recipient. It's a key element in establishing that it would be unjust for the recipient to retain the benefit without payment.

23. How do courts balance the principles of unjust enrichment and freedom of contract in quasi-contractual cases?

Courts must carefully balance these principles. While they seek to prevent unjust enrichment, they also aim to respect parties' freedom of contract. Quasi-contracts are typically imposed only when it's clear that allowing the enrichment would be against principles of justice and fairness.

24. Can quasi-contracts be formed in employment situations?

Yes, quasi-contracts can arise in employment situations, particularly when services are provided without a formal agreement. However, courts are cautious in such cases to avoid undermining established employment law principles.

25. What is the role of "knowledge" in establishing a quasi-contract?

Knowledge or appreciation of the benefit received is typically a required element for a quasi-contract. The recipient should be aware that they're receiving a benefit for which payment would normally be expected.

26. What is the significance of "benefit" in quasi-contracts?

The concept of "benefit" is crucial in quasi-contracts. There must be a measurable advantage or gain received by the defendant for a quasi-contract to be imposed. The benefit forms the basis of the unjust enrichment that the law seeks to remedy.

27. Are quasi-contracts recognized in all legal systems?

While the concept of preventing unjust enrichment is widely recognized, not all legal systems use the term "quasi-contract." Civil law systems, for example, might address similar situations under different legal doctrines.

28. Can a minor be held liable under a quasi-contract?

Generally, minors can be held liable under quasi-contracts, but only for necessities. This is an exception to the general rule that minors can't be bound by contracts. The rationale is to ensure that minors can obtain essential goods and services.

29. How do courts determine the value of benefits in quasi-contractual claims?

Courts typically use the principle of quantum meruit to determine the value of benefits in quasi-contractual claims. This involves assessing the reasonable value of the goods or services provided, often based on market rates or industry standards.

30. What defenses are available against quasi-contractual claims?

Common defenses against quasi-contractual claims include: the defendant didn't receive a benefit, the plaintiff conferred the benefit officiously (unnecessarily), the benefit was a gift, or that recognizing the claim would be against public policy.

31. Can quasi-contracts be applied in international law?

The concept of quasi-contracts or similar principles to prevent unjust enrichment exists in many legal systems, but its application in international law can be complex due to differences in legal traditions and the lack of a unified global legal system.

32. What is the relationship between quasi-contracts and the law of obligations?

Quasi-contracts fall under the broader category of the law of obligations. They represent a type of obligation that's imposed by law rather than arising from agreement (contract) or wrongdoing (tort).

33. How do quasi-contracts differ from promissory estoppel?

While both quasi-contracts and promissory estoppel can create obligations without a formal contract, they differ in their basis. Quasi-contracts prevent unjust enrichment, while promissory estoppel enforces a promise that was reasonably relied upon to prevent injustice.

34. What is the difference between quasi-contracts and implied warranties?

Quasi-contracts are obligations imposed by law to prevent unjust enrichment, while implied warranties are guarantees that the law reads into certain types of contracts or sales transactions, even if not explicitly stated.

35. How do quasi-contracts relate to the concept of estoppel?

While both quasi-contracts and estoppel can create legal obligations without a formal agreement, they operate differently. Quasi-contracts focus on preventing unjust enrichment, while estoppel prevents a party from denying a fact or promise that another has relied upon.

36. Can corporations be subject to quasi-contracts?

Yes, corporations can be subject to quasi-contracts. Like individuals, corporations can be required to pay for benefits they've received to prevent unjust enrichment, even in the absence of a formal agreement.

37. How do quasi-contracts relate to the concept of good faith?

While good faith is not a direct element of quasi-contracts, the principle underlies the concept. Quasi-contracts are imposed to ensure fair dealing and to prevent parties from benefiting in bad faith from situations where no formal agreement exists.

38. What is the role of intention in quasi-contracts?

Unlike in regular contracts, the intention of the parties is not a crucial factor in quasi-contracts. These obligations are imposed by law based on the circumstances, regardless of whether the parties intended to enter into a contractual relationship.

39. Can a quasi-contract be formed for illegal activities?

Generally, no. Courts will not impose quasi-contractual obligations for illegal activities, as this would go against public policy. The law doesn't seek to enforce or provide remedies for illegal acts.

40. How do quasi-contracts interact with the principle of autonomy in contract law?

Quasi-contracts can be seen as an exception to the principle of autonomy in contract law. While contract law generally respects parties' freedom to choose their contractual obligations, quasi-contracts impose obligations without regard to the parties' intentions.

41. What is the statute of limitations for quasi-contractual claims?

The statute of limitations for quasi-contractual claims varies by jurisdiction. In many places, it's treated similarly to breach of contract claims, but it's important to check local laws as it can sometimes be classified differently.

42. What is the relationship between quasi-contracts and restitution?

Quasi-contracts and restitution are closely related. Restitution is often the remedy provided in quasi-contractual situations, requiring the unjustly enriched party to return the benefit or its value to the other party.

43. Can quasi-contracts be applied retroactively?

Yes, quasi-contracts can be applied retroactively. In fact, they often are, as they're typically imposed after the benefit has already been conferred and retained.

44. How do quasi-contracts relate to the concept of constructive trusts?

Both quasi-contracts and constructive trusts are remedial devices used to prevent unjust enrichment. While quasi-contracts typically involve an obligation to pay, constructive trusts involve an obligation to return specific property.

45. Can quasi-contracts be formed in the context of intellectual property?

Yes, quasi-contracts can be applied in intellectual property contexts. For example, if someone uses another's intellectual property without permission but derives benefit from it, a court might impose a quasi-contract requiring payment.

46. Can quasi-contracts be applied in cases of abandoned property?

Quasi-contracts might be applied in cases of abandoned property if someone expends resources to maintain or improve the property. However, laws regarding abandoned property vary widely and often have specific statutory provisions.

47. How do quasi-contracts interact with the doctrine of privity in contract law?

Quasi-contracts can sometimes appear to conflict with the doctrine of privity, which states that only parties to a contract can enforce it. Quasi-contracts may impose obligations on parties who never agreed to contract with each other, effectively bypassing privity concerns.

48. Can quasi-contracts be applied in cases of mistaken identity?

Yes, quasi-contracts can be applied in cases of mistaken identity. If a benefit is conferred on the wrong person due to a mistake, and that person retains the benefit, a court might impose a quasi-contract to prevent unjust enrichment.

49. What is the relationship between quasi-contracts and the law of restitution?

Quasi-contracts are closely related to the law of restitution. In fact, in some jurisdictions, the law of restitution has largely replaced the concept of quasi-contracts, addressing similar situations under the broader principle of unjust enrichment.

50. How do quasi-contracts relate to the concept of negotiorum gestio in civil law systems?

Negotiorum gestio in civil law systems is similar to quasi-contracts in common law. Both concepts deal with situations where one party manages the affairs of another without their knowledge or consent, and may be entitled to compensation.

51. Can quasi-contracts be applied in cases involving public utilities?

Yes, quasi-contracts can be applied in cases involving public utilities. For instance, if a person uses utility services without a formal agreement, a court might impose a quasi-contract requiring payment for the services received.

52. What is the significance of "inequity" or "injustice" in quasi-contractual claims?

The concepts of inequity or injustice are central to quasi-contracts. Courts will only impose these obligations when allowing the recipient to retain the benefit without payment would be unfair or against principles of justice.

53. How do quasi-contracts interact with the principle of consideration in contract law?

Quasi-contracts don't require consideration, which is a necessary element in formal contracts. This is one of the key differences between quasi-contracts and regular contracts, allowing courts to impose obligations even when no bargained-for exchange has occurred.

54. Can quasi-contracts be applied in cases of unsolicited services?

Generally, quasi-contracts are not applied for truly unsolicited services. The law is reluctant to require payment for benefits that were neither requested nor knowingly accepted. However, exceptions may exist in emergency situations or where the recipient knowingly accepts and retains the benefit.

55. How do quasi-contracts relate to the concept of implied terms in contract law?

While both quasi-contracts and implied terms can create obligations not explicitly agreed upon, they differ significantly. Implied terms are read into existing contracts based on the presumed intentions of the parties, while quasi-contracts are imposed by law regardless of the parties' intentions, to prevent unjust enrichment.