Section 68 – 72 of Indian contracts Act, 1872, deals with certain relations resembling those created by contract. It incorporates those obligations which are known as quasi contracts under English Law. The basis of the obligations is that no one should have unjust benefit at the cost of the other. In an action for unjust enrichment, the following essentials have to be proved:

1. The defendant has been enriched by the receipt of a benefit
2. The enrichment is at the expense of the plaintiff.
3. The retention of the enrichment is unjust.

The Indian Contract Act deals with the following quasi-contractual obligations:

1.     Claim  for  necessaries    supplied to a  person  incompetent to contract (Section 68):

Where one person supplies necessaries suited for the condition in the life of a person, who is incompetent to contract (For example, minor or lunatic) or to anyone whom such incompetent person is legally bound to support (For example, to a lunatic’s wife or children), the person furnishing such supplies is entitled to a reimbursement from the property of such incompetent person.

Illustration: A supplies B, a lunatic, with necessaries suited to his condition in life. A is entitled to be reimbursed from B’s property.

2.     Reimbursement of money paid , due by another (Section 69):

Reimbursement of a person paying money due by another in payment of which he is interested. A person, who is interested in payment of the money, which another is bound by law, to pay and who therefore pays it, is entitled to be reimbursed by the other.

Two essentials:                                  

1. One person is interested in payment of the money and therefore he pays it; while,
2. Another person is bound by law to pay the same, but he fails to pay.

3.     Obligation of person enjoying benefit of non-gratuitous Act

(Section 70):  for   applications  of   this   section,  the   following conditions are to be satisfied.

1. A person lawfully do something for another person or should deliver something to him;
   1. The person making the payment or delivering the thing must not do so gratuitously, that is, he should expect payment for the same; and
   1. The other person should enjoy the benefit of this payment or delivery of the thing.

When all the above conditions are satisfied, the person receiving the benefit becomes bound to pay compensation to the person conferring.

• No intentions to do act gratuitously, when the person does not intend to do it gratuitously, but expects payment for the same on doing such act, he can ask for compensation under Section 70.
• Enjoyment of benefit by the defendant is necessary: the voluntary acceptance of the benefit of the work done or the thing delivered is the foundation of the claim under section 70.

• Unjust benefit to the defendant necessary: Sec 70 is found on the principle that one should not gain unjust enrichment at the cost of the other. If there is no unjust gain obtained in any transaction, Sec 70 has no application.

Application of Sec 70 against government:

Sec 70 prevents unjust enrichment and it applies as much to individuals as to corporations and government. If the services rendered or goods supplied to the government are under a purported contract, which does not materialize because of non-fulfillment of the formalities prescribed in Art. 299 of the Constitution, the government can still be made liable to compensate for the same under Sec 70 of the Contract Act, if it has enjoyed the benefit of what has been done under the purported contract.

Sec 70 cannot be invoked against a Minor:

A minor’s agreement being void ab initio, he cannot be made liable under Sec 64 and 65 of the Contract Act. But if necessaries are supplied to a minor, his estate can be made liable under the Sec 68. It has been held that no action can be brought against a minor to recover compensation from him under Sec 70. Sec 70 cannot be invoked against a minor. Firstly, the Section covers every “Person” whether he is competent to contract or not. Secondly, there is nothing in law which debars a minor from enjoying the benefit of the act done by another person.

4.     Responsibility of the finder of goods:

Sec 71 contemplates still another quasi contractual situation, i.e., when a person is a finder of goods belonging to another and takes the goods to his custody and is in the position of a bailee with all responsibility. Every bailee has a following duties:-

• Duty or reasonable care (Sec 151-152)
  • Duty not to make unauthorized use (Sec154)
  • Duty not to mix (Sec 155)
  • Duty to return (Sec 156)
  • Duty not to set jus tertli (right of third person) Sec 165-167

• Duty to return increase (Sec 163)

5.     Liability of a person getting benefit under mistake or coercion (Sec 72)

• Unjust benefit under mistake: Section 72 covers a situation where money has been paid, or anything delivered by one person to another either by mistake or under coercion.
• Money paid or anything delivered under mistake: According to Art.265 of the Constitution, no tax shall be levied or collected except by the authority of law. Law here means only valid law. Sec 72 and the same ought to be refunded by the government because the government cannot be allowed to unjustly enrich itself by retaining the tax so received.
• Money not recoverable where there is no enrichment of the defendant. If the receiver of the money has no longer the same with him, and has further paid it under a similar mistake, he cannot be required to repay the same.
• Unjust benefit under coercion: Sec 72 permits the money paid or anything delivered, either by mistake or under coercion, to be recovered back.
• Compulsion of law is not coercion.