Social Justice in Quasi Contracts

Introduction:

Of all the legal setups in the world, the Law of Contracts is fundamental to all of them. The reason being, it is the most primary and most applicable law in daily transactions. Contracts form the basis of almost all the fields of law, prominently the commercial and banking fields. During the 13th-century number of writs developed in England were contractual and quasi-contractual.[1] Quasi-contract was the outcome of the writ of assumptions which was based on the writ of account. It is Lord Mansfield who is given the due credit of establishing the concept of Quasi Contracts in England.[2] He explained that the law, as well as social justice, should try to prevent “unjust enrichment.” In simple terms, unjust enrichment is termed as the enrichment of one person at the cost of another. Hence by establishing the concept of Quasi Contracts, he also established the principle of natural justice and equity.

There are many situations in which law, as well as Justice, is required so that an individual can be mandated to perform an obligation, although he/she hasn’t either broken any contract or committed any tort.

History

The Indian Contract of 1872[3] deals with the laws related to contracts. It is important to note that the law was introduced by the Britishers and it is the English law that also introduced the concept of Quasi Contracts. surprisingly the Indian Contract Act of 1872 does not contain the word, Quasi Contract. But it does have some specific sections which are based on the concept of Quasi-contracts.

As the meaning suggests Quasi means halfway or partial. Every contract has two parts, the first is the formative and the second consequential. The formative part gives a procedure as to how a contract is formed sequentially. There is a proposal, acceptance which forms a promise. A set of promises forms an agreement. In furtherance to the same, if the agreement is enforceable by law it then becomes a valid contract. On the other hand, the consequential part results in the discharge of contract, performance, breach of contract, or anticipatory breach of contract. The consequential part gives rise to the rights and liabilities of the parties. To have a valid contract both parts should be present. Thus the addition of formative and consequential parts gives rise to a valid or absolute contract.

But under certain circumstances, the formative part of the contract is absent, which means there is no proposal or acceptance or promise or any kind of consideration but the consequential elements are present and certain relations are created between the parties. These relations resemble those created by an absolute or valid contract. Thus, Quasi Contracts are those relations resembling those created by a contract. The nature of the obligation of the party defines the type of the Quasi Contract. Different types of Quasi Contracts (According to the relevant sections of the Indian Contracts Act of 1872) are explained in the following manner.

Types of Quasi Contracts

Section 68 to section 72 of the Indian Contracts Act deal with the different types of Quasi Contracts.[4] They are as follows,

1. Necessaries supplied to person incapable of contracting (Section 68)
2. Reimbursement of person paying money due by another, in payment of which he is interested (Section 69)
3. Obligations of persons enjoying the benefit of the non-gratuitous act (Section 70)
4. Obligations arising out of finder of goods (Section 71)
5. Obligations arising out of money paid under coercion, mistake, or voidable contract (Section 72)

As mentioned above, the word Quasi Contract has not been explicitly mentioned in the act but these sections specify the same.

Social Justice and Quasi Contracts

“Social Justice is the view that everyone deserves equal economic, political and social rights and opportunities.”[5] Moreover, the holy book Bible advocates social justice. “Give justice to the weak and the fatherless; maintain the right of the afflicted and the destitute,” (Psalm 82:3). “Learn to do good; seek justice, correct oppression; bring justice to the fatherless, and please the widow’s cause,” (Isaiah 1:17).[6]“Thus it is well-established fact that the notion of social justice has been implanted deeply in our roots. The concept of contract could not be kept alienated from this notion. Thus we find the blend of these two principles. As mentioned above the Quasi Contracts come into place as a result of the consequential elements of the contract. The principle of unjust enrichment is the foundation of social justice in Quasi-contracts. Until the application of this theory, the jurist could feel the evident loophole under the proposition of natural justice and equity. This argument can be backed by the old cases of Fibrosa SpolkaAkeyjna v. Fairbairn Lawson Combe Barbour Ltd[7] of the then House of Lords. It was this case in which Lord Wright lent support to Lord Mansfield’s theory of unjust enrichment. Hence this is considered as the starting point of inclusion of Social Justice in Quasi Contracts. Since then the subsequent judgments have adopted the principle of Social Justice also called Unjust Enrichment in cases involving Quasi Contracts.

As mentioned above Section 68 of the Indian Contract Act of 1872 deals with Necessaries supplied to a person incapable of contracting. This section aims to provide social justice to the minor (people below the age of 18 are incompetent to form a contract). According to this section if an individual supplies necessities to a minor he is entitled to receive a reimbursement from the minor. Although Section 11 of the Indian Contract Act prohibits incompetent people from entering into a contract. Moreover, a contract with a minor is declared as void ab initio (void from the beginning). People although intending to provide necessities to needy minors would prevent themselves from doing so because the action is barred by law. Moreover, they wouldn’t want to put themselves in such a legal trap. Section 63 of the Indian Contract Act does social justice to the minors as well as to the other party in two ways. Firstly by making a provision for reimbursement provides social justice to the minor and unsound mind and also protects them from exploitation. On the other hand, it also protects the rights of the opposite party by not giving unjust enrichment to minors or unsound people. Hence both the party’s interest has been taken into consideration. It is important to note all the above propositions work in the case where an individual has supplied “necessities” to the minor or person with an unsound mind. For example, if person A supplies 10 suits to a defendant who is a school-going boy. When the boy becomes major, Plaintiff demanded the price of 10 suits, the defendant refused to do so. The Honorable court held that the minor is not liable to pay for 10 suits because it was excessive of necessaries suited to life. Thus what are necessities, which are suited to life, is a question of fact. It is dependent upon the standard of a person. It is a relative term, which changes as per the situation.

Comparative analysis of Quasi Contracts between the India and Philippines

The above-mentioned information and the relevant sections from the Indian Contract Act explain the nature, scope, and social justice in Quasi Contracts. this section of the research paper aims to analyze social justice in Quasi Contracts. India is a common law country. Common law is a legal system that mainly depends on precedents or case laws and the Common law jurisprudence was established by the Britishers.[8] Whereas the Philippines is considered to be a country having the features of both civil as well as common law systems.

4, Article 1157, Civil Code of the Philippines explains Quasi Contracts in detail. The first difference between the two legal systems is that the Indian Contract doesn’t have the word Quasi Contracts in it while the Philippines does. The above mentioned explains Quasi Contracts as “judicial relations arising from certain lawful, voluntary and unilateral acts under which the parties become bound to each other based on the principle that no one shall be unjustly enriched or benefited at the expenses of another.”[9] Quasi Contracts in the Philippines are based on 2 principles.

1. SolutioIndebiti, it exists when;
2. Something is received;
3. When there is no right to demand it;
4. It was unduly delivered by mistake.
5. Negotiorum Gestio, Which exist when one:
6. Voluntary takes charge of the agency or management of the business or property of another.
7. Without any power from the latter.[10]It is clear that the law in

The Philippines does take cognizance of Unjust Enrichment. This establishes the element of Social Justice in Quasi Contracts in the Philippines. Hence in the above mentioned a comparative analysis can be done and it can be concluded that the element of Social Justice in Quasi Contracts is common in both countries.

Conclusion

The Indian Contract act as well as the Civil Code of the Philippines ensures social justice in the Quasi Contracts. It uses the fundamental principle of Unjust Enrichment while explaining the concept of Quasi Contracts. As the word itself suggests quasi means partial in nature. Numerous sections in both these acts provide and specify the contractual obligations of the party to ensure justice although the contract is quasi and the formative part of the contract is absent. It can be also concluded that the principle of social justice in Quasi Contracts is common in common law countries as well as civil law countries. According to me, concepts like quasi-contracts are formulated by the law itself to prevent people from taking undue advantage of the loopholes existing in the system. It does evidently results in establishing social justice. Attempts like these by the law itself highlight it’s accommodative nature and also reflects it’s responsibilities to ensure justice in society. Quasi-contracts as a bridge of delivering social justice and safeguarding individual rights against unjust enrichment or undue advantage. The ultimate aim of including the element of social justice in Quasi-contracts is to uphold the jurisprudence of justice and equity and to safeguard the interest of innocent and honest individuals.

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References:

[1]Thorne, S. E. The Yale Law Journal 46, no. 8 (1937): 1439-441. Accessed June 23, 2021. doi:10.2307/792170. https://www.jstor.org/stable/792170?seq=1#metadata_info_tab_contents

[2]ibid

[3]The Indian Contract Act, 1872, No 9, Acts of Parliament, 1872 (India).

[4] Ibid

[5]The San Diego Foundation, https://www.sdfoundation.org/news-events/sdf-news/what-is-social-justice/ (Last visited June 23, 2021).

[6]Shared Hope Organization, https://sharedhope.org/2018/06/04/biblical-justice-and-social-justice/ (Last visited June 23, 2021).

[7]Fibrosa SpolkaAkeyjna v. Fairbairn Lawson Combe Barbour r Ltd 1943 AC 32 (HL)

[8]Investopedia, https://www.investopedia.com/terms/c/common-law.asp (Last visited on June 23, 2021).

[9]The Oblivion Blog, https://obliconblog.wordpress.com/2017/04/02/article-1157/ (Last visited on June 23, 2021).

[10] ibid