Cheat Sheet: Quasi Contract

1. Basic Concepts

1.1 Definition and Nature

1.2 Distinction from Actual Contract

2. Types of Quasi-Contractual Relations

2.1 Section 68: Necessaries Supplied to Person Incapable of Contracting

• Supply must be suited to condition in life of incompetent person
• Includes food, clothing, lodging, medical treatment, education
• Luxuries are not covered under necessaries

2.2 Section 69: Reimbursement of Person Paying Money Due by Another

• Example: Co-owner paying full property tax entitled to recover proportionate share from other co-owners
• Payment must not be voluntary but under legal compulsion or interest
• Payer must have interest in making payment

2.3 Section 70: Obligation of Person Enjoying Benefit of Non-Gratuitous Act

• Leading case: State of West Bengal v. B.K. Mondal & Sons - contractor entitled to compensation for work done though contract unenforceable
• Not applicable if act done gratuitously or without lawful authority
• Benefit must be actually enjoyed by other person

2.4 Section 71: Responsibility of Finder of Goods

• Finder cannot sue for reward unless offered
• If goods are perishable or owner cannot be found with reasonable diligence, finder may sell
• Before sale, reasonable notice must be given when practicable
• Finder entitled to retain out of proceeds: expenses + cost of sale

2.5 Section 72: Liability for Money or Goods Received by Mistake or Coercion

• Originally covered only mistake of fact; now includes mistake of law post-amendment
• Leading case: Shankarlal Naranlal v. Chimanlal Nihalchand - payment under mistake of law recoverable
• Burden to prove mistake lies on person seeking recovery
• Money paid voluntarily with full knowledge cannot be recovered

3. Key Principles and Elements

3.1 Unjust Enrichment

3.2 Quantum Meruit

3.3 Essential Conditions for Quasi Contract

• No actual contract exists between parties
• One party confers benefit on another or prevents loss
• Benefit retention without compensation would be unjust
• Recipient knows or should reasonably know about the benefit
• Law implies obligation to restore or compensate

4. Remedies and Enforcement

4.1 Available Remedies

4.2 Limitation Period

• Claims under quasi contract: 3 years from date when right to sue accrues
• Governed by Article 113 of Limitation Act, 1963
• Time begins when benefit conferred or money paid becomes known

4.3 Defenses Available

5. Important Case Laws

5.1 Leading Judgments

5.2 Application Principles from Precedents

• Mere receipt of benefit not sufficient; recipient must have accepted benefit knowingly
• Voluntary services without request not compensable unless necessity exists
• Officious intermeddler cannot claim under quasi contract
• Payment must be under legal compulsion or by person interested in payment
• Mistake must be material and causative of payment

6. Distinctions and Comparisons

6.1 Quasi Contract vs. Bailment

6.2 Quasi Contract vs. Tort

6.3 Quantum Meruit vs. Damages

7. Special Situations and Applications

7.1 Government Contracts

• Quantum meruit applies even when government contract void for want of authority
• Work executed in good faith must be compensated
• Constitutional provisions do not bar quasi-contractual claims
• Reasonable value determined based on market rates and prevailing conditions

7.2 Partial Performance

• Where contract partly performed and becomes void, party performing entitled to compensation
• Applies under Section 70 for non-gratuitous acts
• Must prove work done was lawful and other party enjoyed benefit
• Compensation proportionate to work completed

7.3 Mistake of Law vs. Mistake of Fact

8. Practical Points for Exam

8.1 Section-wise Quick Reference

8.2 Common Exam Scenarios

• Minor purchasing necessaries: Section 68 applies, recovery from property only
• Co-owner paying entire tax: Section 69 applies, entitled to proportionate contribution
• Contractor performing work under void contract: Section 70 applies, quantum meruit claim available
• Finding lost goods: Section 71 applies, duties as bailee + lien for expenses
• Payment under mistake or coercion: Section 72 applies, entitled to restitution

8.3 Key Terms to Remember

• Nemo debet locupletari ex aliena jactura - foundational maxim
• Quantum meruit - reasonable remuneration for work done
• Unjust enrichment - core principle underlying all quasi contracts
• Non-gratuitous act - act done not as gift but expecting return
• Necessaries - goods/services necessary according to person's station in life
• Restitution - restoration of benefit wrongfully obtained