Quasi contracts: obligations created by law, not by agreement

Meaning. A contract needs offer and acceptance, capacity, free consent and lawful consideration. In some situations none of these is present, there is no agreement and no promise, and yet the law puts a duty on one person and gives a matching right to another. The courts treat such a relation as resembling a contract and enforce it as if it were one; hence the name quasi (that is, resembling) contract. In India they are also described as relations resembling those created by contract, and the Indian Contract Act, 1872 sets them out in sections 68 to 72. They rest on equity, justice and good conscience: nobody should grow rich out of another person's loss, which is the doctrine of unjust enrichment.

Why it is not a contract at all. The statement is correct on this point. A quasi contract resembles a contract in its result but not in the way it comes into being:

Example: a customer of a Noida finance company pays the same monthly instalment twice through UPI. The company never promised to refund anything and no refund was ever agreed, yet it must return the second payment. Its duty comes from the law alone.

It is an obligation which the law creates: the five cases. The Act imposes the obligation in five situations:

1. Necessaries supplied to a person incapable of contracting (section 68). Where a person who cannot contract, or anyone he is legally bound to support, is supplied with necessaries suited to his condition in life, the supplier is entitled to be reimbursed from that person's property. Example: a grocer in Indore supplies monthly provisions suited to his station to a man of unsound mind living alone; the grocer is reimbursed out of the man's property.
2. Payment by an interested person (section 69). Where someone else is legally bound to pay a sum and a person who has an interest in its being paid pays it for that reason, the payer can recover it from the one who was bound. Example: a tenant pays his landlord's overdue property tax to stop the municipality selling the building in which his shop is let; the landlord must repay him.
3. Benefit of a non-gratuitous act (section 70). Where a person lawfully does something for another, or delivers something to him, not intending to do so gratuitously, and the other enjoys the benefit, the other must compensate him or restore the thing. If the circumstances show that the act was meant to be gratuitous, as where a person saves another's property from fire intending no charge, nothing is payable. Example: a courier wrongly leaves a carton of printer cartridges at a Gurugram office, which uses them as its own; the office must pay for them.
4. Finder of goods (section 71). Someone who comes across another's goods and takes charge of them is placed under the same responsibility as a bailee. Example: a commuter who picks up a laptop left on a Delhi Metro seat and takes it home holds it with a bailee's responsibility.
5. Money paid or a thing delivered by mistake or under coercion (section 72). The person who receives it must repay or return it. Payments made under any kind of mistake are recoverable, and coercion here is read widely, to include oppression and extortion, not only coercion as defined in section 15. The double instalment in the example above falls here.

In none of these cases did the parties agree to anything: the liability arises from the situation in which the law finds them.

Remedy (section 73). Although no contract exists, the law gives a contract-like remedy. The paragraph of section 73 on obligations resembling contract states that when such an obligation "has been incurred and has not been discharged", the person injured by the failure may recover the same compensation from the party in default as if that party had contracted to discharge it and had broken his contract.

Features.

1. Origin: the obligation is imposed by law and does not come from any agreement of the parties.
2. Basis: a legal duty, not a promise, is what binds the party.
3. Against whom: the right lies against a particular person or persons, not against everyone; in this it is like a contractual right.
4. Subject: the right is always to money, and generally, though not always, to a liquidated sum.
5. Enforcement: a suit lies for its breach just as it would for breach of a complete contract.

Conclusion. The statement is right. A quasi contract lacks every element of an agreement, so it is not a contract at all; it is an obligation that the law itself creates, in the five cases of sections 68 to 72, to prevent one person from being unjustly enriched at another's expense, and section 73 enforces it as if it were a contract.