Law as well as justice should try to prevent unjust enrichment. Critically examine this statement....

Question: Law as well as justice should try to prevent unjust enrichment. Critically examine this statement with reference to the Quasi-Contracts. [HPJS 2019]

Find the answer to the mains question of the Law of Contract only on Legal Bites. [Law as well as justice should try to prevent unjust enrichment. Critically examine this statement with reference to the Quasi-Contracts.]

Answer

The statement "Law as well as justice should try to prevent unjust enrichment" underscores a foundational legal principle aimed at equity and fairness. In the context of quasi-contracts, this principle manifests through legal obligations that arise not from an agreement but from circumstances where one party is unjustly enriched at the expense of another. The doctrine of unjust enrichment serves as a moral and legal anchor to prevent one party from benefiting unfairly, and quasi-contracts offer the legal mechanism to restore balance.

Quasi-contracts are not actual contracts formed through mutual consent; rather, they are obligations imposed by law to prevent unjust enrichment. Under the Indian Contract Act, 1872, Sections 68 to 72 deal with quasi-contractual obligations.

The central idea is that no one should unjustly benefit at another’s expense, aligning with the maxim “Nemo debet locupletari ex aliena jactura” (no one should be enriched by another’s loss).

Section 68 – Claim for necessaries supplied to a person incapable of contracting

Ensures that the supplier of necessities to a minor or a person of unsound mind is compensated from the property of the recipient.

Section 69 – Reimbursement of person paying money due by another

Provides that a person who pays off another's legal liability is entitled to reimbursement.

Section 70 – Obligation of person enjoying benefit of non-gratuitous act

If one person lawfully does something for another, not intending it as a gift, the beneficiary must compensate.

Section 71 – Finder of goods

A person who finds goods belonging to another has the same responsibility as a bailee and is entitled to compensation for preservation.

Section 72 – Liability of person to whom money is paid or thing delivered by mistake or under coercion

Ensures that money or property received wrongly must be returned.

The doctrine of unjust enrichment bridges common law and equity, focusing not merely on legal form but on substantive justice. In State of West Bengal v. B.K. Mondal and Sons (AIR 1962 SC 779), the Supreme Court held that the state was liable to pay for the construction done on its behalf, even though no formal contract existed, as it had enjoyed the benefit.

Thus, the judiciary invokes quasi-contractual remedies to enforce restitution and prevent undue gain, even in the absence of a formal agreement.

Critical Analysis

Strengths:

• Ensures justice: Prevents exploitation and promotes fair dealing.
• Welfare principle: Protects those who act in good faith (e.g., supplying necessaries to a minor).
• Flexibility: Provides remedies in atypical legal relationships.

Limitations:

• Ambiguity in application: Determining “non-gratuitous” intent or “benefit” can be subjective.
• No damages for breach: Unlike express contracts, quasi-contracts provide only restitution, not compensation.
• Scope of enrichment: The term “unjust” is interpretative and varies case by case.

The principle that law and justice should prevent unjust enrichment finds its most practical embodiment in the doctrine of quasi-contracts. These provisions ensure that individuals or entities do not retain benefits that are morally and legally unjustified. While the framework under the Indian Contract Act is rooted in equity and serves to correct imbalances, the effectiveness of this remedy depends largely on judicial interpretation and the specific facts of each case. Nonetheless, quasi-contracts stand as a powerful tool to safeguard fairness and uphold justice in obligations outside traditional contracts.

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