CHAPTER - II

PRINCIPLES OF QUASI - CONTRACT

History of Quasi - Contract

English Contract law developed around a form of action known

as the action of assumpsit which came into prominence in the early

sixteenth century as a remedy for the breach of informal agreements

reached by word of mouth. The Seventeenth century saw the extension

of assumpsit into what came to be called Quasi- Contract.

English lawyers did not originally distinguish between contractual

and Quasi-Contractual claims. Their classification was founded on

remedies, and the medieval registers contained precedents of writs

whose functions included both the enforcement of what are now called

contracts and occasionally, the prevention of unjust enrichment. So debt,

which lay for a certain sum, could be employed to recover not only

rent, or the price of goods sold or a loan of money, and debt was also

used to recover the miscellaneous items already mentioned, such as

penalties due under statute or by law, customary obligations and

judgment debts. Account though founded on a special relationship

between the parties, was extended, before it was superseded by debt

and then by indebitatus assumpsit, to render the defendant accountable

to the plaintiff in the absence of a special relationship between them

and exceptionally, to enable a person to recover money paid under a

mistake. But these developments were piecemeal and pragmatic. They

neither presupposed nor disclosed the growth of any general principle.

Bracton’s reference in his Tractatus to obligations quasi ex contractu

was no more than brief and meagre summary of passage in Justinian’s

Institutes, which the contemporary lawyer would certainly have found

foreign and probably have dismissed as irrelevant.

The growth of indebitatus assumpsit provided the opportunity

for the development of Quasi-contract. This action superseded debt

and account in the sixteenth century. Why and how this happened is

somewhat obscure, although the clue is certainly to be1 found in the

traditional rivalry between the Court of King’s Bench and Common

Pleas. Debt and account were returnable only in the common pleas.

Assumpsit in the King’s Bench.' The king’s Bench judges were more

progressive and were eager to manipulate assumpsit to enable it to do

the work of debt. They did this by finding that the defendant was

indebted to the plaintiff in a certain sum and had promised at the time

of the contract or afterwards, to pay that sum to him. If this promise

were broken, loss would occur and so case would lie. Most importantly

they did not require the jury to find an express promise, the promise

could be implied from the defendant’s conduct. Actions so pleaded

were known as indebitatus assumpsit. The litigants were also anxious

to bring their action in the King’s Bench, the bill procedure was cheaper,

wager of law could be avoided and they did not have to set out so

precisely the facts giving rise to the debt.

 The Common Pleas began to attack the King’s Bench use of

assumpsit. They did so on a number of grounds , the most significant

of which was that the assumpsit was a mere fiction a;nd a flagrant

attempt to avoid wager of law. It was not, however until the creation of

a new Exchequer Chamber in 1585, to review the judgments of the

King’s Bench, that it became possible to resolve the conflict between

the courts. After the decision of that chamber in 1602 in Slade’s case1

there was no further attempt to frustrate the use of assumpsit as an

alternative to debt and so the view of the King’s Bench prevailed.

In Slade’s case the promise was implied from facts sufficient to

support a writ of debt, the case was one which a modern lawyer would

characterize as contractual. Whether it influenced the extension of

assumpsit to enforce quasi-contractual actions is conjectural for the

»
notion that an executory contract in the old technical sense imported an

assumpsit in itself, does not lead logically to the implication of fictional

subsequent promises in cases where there is no contract at all. What

is certain is that by the Restoration, indebitatus assumpsit had become

fully concurrent with debt and account and since these old praecipe

writs cut across the boundaries of the modern contract and quasi­

contract, indebitatus assumpsit was employed to enforce those quasi-

contractual claims which had previously been enforced by debt and

account. In these cases the contract or promise alleged in the pleading

1. (1602) 4 Coke 92.

 was a complete fiction. It was not even a tacit though genuine promise

implied from the facts, but an entirely fictitious promise, a so-called

contract implied in law. This did not however deter the lawyers of the

time and indeed indebitatus assumpsit proved so popular that it gradually

spread beyond the boundaries of the praecipe writs. It was soon to

become available in cases of improper application of legal process, of

waiver of tort and duress of goods. By the end of the eighteenth century,

the foundations of the modern law of quasi- contract had bean laid.

Demise of implied contract theory.

The victory of indebitatus assumpsit over the praecipe writs was

highly beneficial to the growth of quasi- contract. But the fictitious

promise which lay at its root left a legacy of confusion which until recently

hindered the development of a law of restitution. Lord Mansfield, at

least had no doubts about the status of this so-called promise. In the

celebrated case of Moses V. Macferlan 2 counsel argued that no action

would lie because assumpsit lay oh an express or implied contract and

on the facts of the case it was impossible to presume any contract to

refund the money claimed by the plaintiff. Lord Mansfield gave this

answer:

“if the defendant be under an obligation, from the

ties of natural justice to refund, the law implies a

2. (1760) 2 Burr. 1005.

 debt, and gives this action, founded in the equity

of the plaintiff’s case as it were upon a contract

(Quasi ex contractu, as the Roman law expresses it)”

Since the forms of action continued in existence, it is not

surprising that lip-service should have continued to be paid to the notion

of Implied contract, for it was only through that fiction that quasi-

contractual claims were enforceable at all in indebitatus assumpsit. But

its demise might have been expected after the abolition of the forms of

action in the nineteenth century and the provision in the Common Law

Procedure Act 1852, that fictitious and needless averments, including

‘the statement of promises which need not be proved, as the promises

in indebitatus counts,’ were not to be pleaded.3 Yet the fiction grew

rather than diminished in importance. The abolition of the forms of

action, which had for so long provided the skeleton of the law, forced

lawyers to find some new method of classifying claims. This they found

in the dichotomy of contract and tort, and the apparently intractable

quasi- contractual claims were relegated to the status of an appendix to

the law of contract. If the historical connection of these claims with the

contractual action of assumpsit provided the justification of this step,

the means lay in giving substance to the fictitious contract by which they

were enforced and positivist fear of uncertainty encouraged lawyers to

take refuge behind a concept whose name at least was familiar. The

3. (1943) A.C. 32.

 implied contract ceased to be simply an undesirable means to a

desirable end. It became the basis of the law of quasi - contract.

The common law continued to be stratified into contract and

tort; and the assertion that the requirement of implied contract leads to

certainty is unintelligible. When is a contract to be implied? No logical

answer can be given to the question when recourse should be had to

a fiction. Moreover, study of the cases reveals that emphasis on implied

contract, and the spurious connection with contract which it implies, did

in the past inhibit discussion of substantive issues. To take but one

exam pfc, jn Sinclair Vs Brougham,4 the House of Lords held that

money deposited under contracts of deposit which were ultra vires

banking company were not recoverable in an action for money had and

received because, inter alia,

“the law cannot de jure impute promises to repay,

whether for money had and received or otherwise,

which, if made de facto, it would inexorably avoid."

This resort to implied contract prevented, any discussion of the

real point at issue, namely, whether the rule of policy which precludes

unjust enrichment should override the rule of policy which underlies the

ultra vires doctrine.5

4. (1914) A.C. 398.

5. (1996) A.C. 669.
 It was accepted that the implied contract, theory was a

meaningless and dangerous anachronism, one of the ‘ghosts of the

past,’ as Lord Atkin described it which could defeat a just claim. Greer

L.J., Lord Wright, Lord Denning, and Lord Pearce joined judges in other

common law jurisdictions in asserting that the fiction should now be

disregarded. Occasionally, judges have continued to invoke the language

of implied contract. However, in Westdeutsche Landesbank Girozentrale

V. Islington London Borough Council, Lord Browne - Wilkinson, and the

other members of the Appellate Committee, in reaching the conclusion

that Sinclair V Brougham should be overruled and that the depositors’

personal claim should have succeeded, said

“subsequent development in the law of restitution

demonstrate that this reasoning is no longer sound.

The common law restitutionary claim is based not

on implied contract but on unjust enrichment; in the

circumstances the law imposes an obligation to

repay rather than implying an entirely fictitious

agreement to repay...... In my Judgement, your

Lordships should how unequivocally and finally

reject the concept that the claim for moneys had

and, received is based on an implied contract, I would

overrule Sinclair V. Brougham on this point It

follows that in Sinclair V. Brougham the depositors

should have had a personal claim to recover the

 moneys at law based on a total failure of

consideration. ”

It is to be hoped that the implied contract theory is now finally,

a ghost of the past.

Traditionally English lawyers were hostile to. a law of quasi­

contract or restitution based On unjust enrichment. Until recently, powerful

dicta of great judges like Lord Mansfield 6 and Lord Wright tended to

fall on deaf ears. In Fibrosa Spolka Akeyjna Vs Fairburn Lawson

Combe Barbour Ltd,7 the latter said,

“It is clear that any civilized system of law is bound

to provide remedies for cases of what has been

called unjust enrichment or unjust benefit, that is to

prevent a man from retaining the money of or pome

benefit derived from another which it is against

conscience that he should keep. Such remedies in

English law are generically different from remedies

in contract or tort, and are now recognised, to fail

within a third category of the common law which

has been called quasi-contract or restitution.”

6. Moses Vs. Macferlan (1760) 2 Burr. 1005.

7. (1943) A.C. 32,61.
 However, following ever-increasing judicial references to

restitution and unjust enrichment, authoritative blessing was finally given

to the subject in 1991 by the House of Lords in the momentous decision

of Lipkin Gorman V. Karpnale Ltd.8 In the light of that decision it is no

longer necessary to become embroiled in the long running but arid

debate as to whether the subject exists. All attention can rightly be

focussed on its content. One approach, above all has traditionally led

to restitution being pushed into the shade of contract or tort: ’the implied

contract theory. According to this, most of the common law part of

restitution is satisfactorily explained as resting on an implied promise

by the defendant to pay the plaintiff. This area of the law is therefore

seen merely as an adjunct to the law of contract, hence the label ‘quasi-

contract.’

By implied contract theory, if the plaintiff pays the defendant

£100 under a mistake of fact, his legal remedy to recover the £ 100

rests on the defendant’s implied promise to him to pay it back. But this

approach is fictional and says nothing about why the promise should be

implied.

It is contrary to the rule of law for judges to reach decisions

without properly explaining their reasoning. This is not to say that judges

applying the implied contract theory have reached results that are

inconsistent with unjust enrichment reasoning. On the contrary, it is

8. (1991) 2 A.C.. 548.

believed that, whether language has overtly been adopted, the courts

have throughout been applying the principle of unjust enrichment. It is

not to be expected therefore that the implicit rejection of implied contract

theory in Lipkin Gorman will alter decisions at a stroke. Nevertheless

the acceptance of the unjust enrichment principle may occasionally lead

to difference in the results of cases. This is for three main reasons.

First the recognition of unjust enrichment in Lipkin Gorman was combined

with the Lords’ acceptance of a change of position defence which at

the defence stage, allows a more rigorous examination of the defendant’s

enrichment than was possible under the previous law. Secondly

recognizing unjust enrichment should enable the courts to see clearly

that certain areas of the law (most obviously, the mistake of law bar

and the general insistence that a failure of consideration be total)

represent restrictions on the pure principle of unjust enrichment which

may not withstand close scrutiny. Thirdly recognition of the principle will

bring together areas of the law (for example restitution for common law

and equitable wrongs) that might otherwise have appeared desperate

and may reveal inconsistencies that require eradication.

In the words of Maddaugh and Me Camus,

“Giving a rational structure to the material serves

to expose anomalies in the past treatment of

restitutionary questions and facilitates the

development of doctrine which will afford similar

 treatment to cases which can now more clearly be

seen to be similar in material respects."

Principle of Unjust Enrichment

Like contract and tort there must be a law for the restoration of

benefits on grounds of unjust enrichment. There are many circumstances

in which a defendant may find himself in possession of a benefit which

in justice, he should restore to the plaintiff. Obvious examples are

where the plaintiff has himself conferred the benefit on the defendant

through mistake or compulsion. To allow the defendant to retain such

a benefit would result in his being unjustly enriched at the plaintiff’s

expense and this, subject to certain defined limits, the law will not allow.

Unjust enrichment is simply the name which is commonly given to the

principle of justice which the law recognises and gives effect to in a

wide variety of claims of this kind.

Unjust enrichment is no more vague than the tortious principle

that a man must pay for harm which he negligently causes another or

the contractual principle that pacta sunt servanda. The principle of unjust

enrichment is placed to the forefront of the American Restatement of

Restitution. Paragraph 1 states that,

“A person who has been unjustly enriched at the

expense of another is required to make restitution

to the other."
 Similar statements of principle had been made by Lord Mansfield

in a number of cases concerning the action for money had and received.

His conclusion was that

“the gist of this kind of action is that the defendant

upon the circumstances of the case is obliged by

the ties of natural justice and equity to refund the

money. ”

For many years Lord Mansfield’s views gained acceptance. But

the change of climate which encouraged or accompanied the advance

of the implied contract theory also led to reaction against his enunciation

of principle. Earlier in 1913 Hamilton L.J. had said that

“whatever may have been the case 146 years ago

we are not now free in the twentieth century to

administer that vague jurisprudence which is

sometimes attractively styled justice as between

man and man’ ”

such remarks are merely pejorative. Others are more revealing

of the error under which these critics were labouring.” In Sinclair V.

Brougham, Lord Sumner, as Hamilton L.J. had now become confessed

that
 “It is hard to reduce to one common formula the

conditions upon which the law will imply a promise

to repay money received to the plaintiff’s use.”

It is indeed impossible to produce any such common formula in

this branch, as in other branches of the law. The principle of unjust

enrichment may defy definition and yet the presence in or absence from

a situation of that which it denotes may be beyond doubt.

Lord sumner’s opinion that the scope of the action for money

had and received was fixed by the decided cases was expressed at a

time when the legacy of the forms faction inhibited the development of

the law of restitution. Few if any, English judges would now endorse it.

The insistence on any notional promise no longer closes ‘the door to

any theory of unjust enrichment in English law.’ The old common law

courts should be seen as a practical and useful if not complete or

ideally perfect instrument to prevent unjust enrichment aided by the

various methods of technical equity which are also available. The case

law now demonstrates that the courts recognise that the principle of

unjust enrichment unites restitutionary claims, and that the law is not

condemned to no further growth in this field. As Lord Goff said in

Woolwich Building Society Vs IRC 9 this growth will Continue. That

decision and others possibly recognize other ‘unjust factors’ to adopt

professor Birks’ terminology such as unconscionability.

9. (1993) A.C. 70,165.

 Lord Diplock denied the existence of any general doctrine of

unjust enrichment. He was correct to assert that the concept of

unjustment enrichment does not confer on a judge a discretion to do

whatever idiosyncratic notions of what is fair and just might dictate.

But as Lord Brownie Wilkinson said in the Woolwich Building

Society case, although,

“As yet there is in English law no general rule giving

the plaintiff a right of recovery from a defendant who

has been unjustly enriched at the plaintiff’s expense,

the concept of unjust enrichment lies at the heart of

all individual instances in which the law does give a

right of recovery. ”

In professor Dawson’s words

“the aims of .... this common enterprise are

obviously to scale down the apparently unlimited

mandate of the general clause to restructure it into

distinct subordinate norms that become intelligible

and manageable through their narrowed scope and

function. ”
 As in other subjects, in restitution recourse must be had to the

decided cases in order to transfer general principle into concrete rules

of law. As Lord Wright once said of Lord. Mansfield's famous dictum

in Moses Vs Mackt'eclan,

“like all large generalizations it has needed and

received qualifications in practice. The standard of

what is against conscience in this context has

become more or less canalised or defined but in

substance the juristic concept remains as Lord

Mansfield left it ”

A close study of the English decisions and those of other

common law jurisdictions, reveals a reasonably developed and

systematic complex of rules. It shows that the unjust enrichment is

capable of elaboration and refinement. It presupposes three things:

1. First the defendant must have been enriched by the receipt of a

benefit

2. Secondly that benefit must have been gained at the plaintiff’s expense

3. Thirdly it would be unjust to allow the defendant to retain that benefit.

These three subordinate principles are closely interrelated and

cannot be analysed in complete isolation from each other. Examination

of each of them throws much light on the nature of restitutionary claims

and the principles of unjust enrichment.

1. Enrichment

A restitutionary claim is for the benefit, the enrichment gained

by the defendant at the plaintiffs expense, it is not one for loss suffered.

As will be seen, in English law the concept of benefit is not synonymous

with that of objective enrichment (in the sense that the wealth of the

defendant has increased) but also embraces expense saved and

'requested for performance.’

Success of the plaintiffs claim may depend on the nature of the

benefit conferred. Different principles govern claims arising from the

payment of money from claims based on the receipt of services or the

delivery of goods. Moreover at one time it was thought that a plaintiff

had to demonstrate that the defendant had gained a positive, as distinct

from a negative benefit.

“Today few would deny that the saving of expense

is a legal as well as an economic benefit So if you

use my electrical equipment without my consent you

must compensate me for its use even though I may

never have used it.10

10. (1952) 2 QB.

a. Money

The most common example of a positive benefit is money which

has the peculiar character df a universal medium of exchange. The

mere receipt of money is therefore a benefit to the recipient with delivery.

The defendant may also benefit if money is paid not to him but to a

third party to his use. But at common law he will only benefit if the

plaintiff's payment discharges a debt which he owes to a third party.

It is not easy to discharge another’s debt in English law. This will occur

only if the debtor authorised or subsequently ratified, the payment. There

are few exceptions to this principle, which appears to be of little merit,

now that debts are freely assignable. The most important common law

exceptions are where the plaintiff is compelled to make the payment by

compulsion of law and if he pays because he has an interest in the

defendant's property which he wishes to protect.

b. Services

The receipt of money always benefits the defendant. But

services may not do so. From their very nature services cannot be

restored and the defendant may never have wished to receive them or

at least to receive them if he had to pay for them . As Pollock C.B.

laconically once remarked “one cleans another’s shoes, what can the'

other do but put them on?” For that reason, the common law originally
concluded that a defendant could be said to have benefited from the

receipt of services only if he had requested them.

A true request will normally lead to the conclusion that the

defendant who requested the services has contractually bound himself

to pay for them. But a defendant who is not contractually bound, may

have benefited from services rendered in circumstances in which the

court holds him liable to pay for them. Such will be the case if he freely

accepts the services. He will be held to have benefited from the services

rendered if he, as a reasonable man, should have known that the plaintiff

who rendered the services expected to be paid for them and yet he did

not take a reasonable opportunity open to him to reject the proffered

services. Moreover, in such a case he cannot deny that he has been

unjustly enriched.

The recognition of free acceptance so defined is in principle

objectionable for it erodes the right of a person to determine his own

choices only if he has requested services can he be said to have chosen

and gained a benefit. If a principle of free acceptance is recognized,

a defendant may be compelled to pay for services which he asserts

honestly if perversely, are of no benefit to him or he may be indifferent,

not caring one way or the other, whether the services are rendered or

not Again the defendant may concede that the services are beneficial

but plead that he had more important things on which to spend his

money. But in these exceptional circumstances, the burden should be

on the defendant who is not the reasonable man immediately to tell the

plaintiff that he is perverse, indifferent or that he has more important

things to do with his money. If he does not do so, he cannot deny that

he has gained a benefit.

The principle enshrined in the concept of free acceptance is the

most satisfactory explanation of those decisions which recognised the

plaintiffs claim that his services, which had not been requested had

benefited the defendant. Many of the successful claims have arisen in

the context of ineffective contracts. A plaintiff who rendered services

under a contract which was void because the parties had not agreed on

essential terms was awarded a sum which was what the services were

worth, a builder who did extra work thinking that a contract was about

to be made recovered a reasonable price and the High Court of Australia

has granted a restitutionary claim for services rendered under a contract

which was executed but was unenforceable by action.

Positive and Negative Benefits

Benefits may be positive or negative. The notion of an objective

benefit is uncontroversial, a defendant is benefited positively and

objectively where he receives something tangible, an end product, that

can be realised in money. The receipt of money, land or chattels are

examples of positive objective benefits.

 Benefits may also be negative. It may be their reluctance to

accept this point that explains why some scholars have turned to the

‘unjust sacrifice’ view. A defendant is benefited negatively or objectively

where saved an expense that he could reasonably have incurred. The

receipt of services, the use of another’s land or chattels or the discharge

by another of one’s legal obligations are examples of negative objective

benefits. Although these do not constitute realisable gains, they are

equally valuable. So where the. services comprise the cutting of hair or

the writing of a book or the building of a house, the defendant can be

said to be objectively benefited.

It is not enough simply to establish objectively that the defendant

has been benefited whether positively or negatively. For the law must

be concerned with the issue of benefit in relation to the particular

defendant. So what is important in restitution is whether the particular

defendant has been benefited. It is to cater for this individuality of

value, there are two main tests of benefit

a) Incontrovertible benefit

b) Free acceptance

Incontrovertible benefit

No reasonable man could seriously deny that he has been

benefited. The receipt of money is the most obvious example of an

incontrovertible benefit. More problematic is the application of this

concept other than to the receipt of money. As regards positive benefit,

only those that have been realized; converted into money are

incontrovertibly beneficial. Goff and Jones include readily realisable

benefits so that the receipt of improvements to chattels are treated as

incontrovertibly beneficial even though the defendant has not sold them.

Turning to negative benefits, the saving of legally or factually

necessary expense is incontrovertibly beneficial. The defendant would

inevitably have had to incur such expense and therefore cannot

reasonably deny that he has been benefited by not having to do so.

Discharging another’s legal liability is therefore incontrovertibly

beneficial.

The defendant will not usually be regarded as having been

benefited by the receipt of services or goods unless he has accepted

them with an opportunity of rejection and with actual or presumed

knowledge that they were paid for. According to Birks a free acceptance

occurs where a recipient knows that a benefit is being offered to him

non-gratuitously and where he, having the opportunity to reject, elects to

accept. But Burrows argues that free acceptance was not clearly

established by authority and is unwarranted in principle. According to

him the most important test, outside incontrovertible benefit, is whether

the defendant bargained for the objective benefit thereby manifesting a

positive desire, and willingness to pay for it. Moreover, once the
defendant has bargained for services or goods, there is a rebuttable

presumption that receipt of even a part of those services or goods is

not merely objectively beneficial but is beneficial to the defendant.

Garner also rejects free acceptance. Beatson too rejects free

acceptance.

2. At the expense of the plaintiff

The second concept of general principle of unjust enrichment is

that the benefit, the enrichment must be gained at the plaintiff’s expense.

In many cases it will not be difficult to discharge the burden of

demonstrating that it has been so gained; it will be evident that the

plaintiff has paid money, rendered services or delivered goods to the

defendant. However in two situations, the benefit has been gained at

the plaintiffs expense is more complex. These are a) where the benefit

was gained from the third party b) where the benefit was gained from

the defendant’s wrongful act

a) Benefit gained from a third party

T pays money to D; a stranger, intending thereby to discharge

a debt which he owes P. D makes no payment to P. T’s debt remains

undischarged and T can normally recover his payment from D, the

consideration for the payment having wholly failed. It must follow that P

never had any claim against D. D has not gained his benefit at P’s
expense, the benefit has been gained at T’s expense. It is T, not P,

who has suffered the loss. The conclusion that P has no claim against

D is, as a general rule, a wise one. At one time it was held that P’s

claim failed because there was no privity between P and D. As Prof.

Dawson said the invocation of the fiction of privity reflected dimly felt

situation that it was a mistake to become involved in these multiparty

confusions when quasi-contract would short circuit a series of inter­

connected transactions without joinder of the parties at intermediate

stages. For example take the case where T mistakenly gives £ 300 to

D, intending to give P that sum. If T demands the money from D before

he has paid it to P, D cannot resist that demand. T is allowed to

change his mind. The gift to P is still imperfect and for that reason P

has no claim against either T or D. Again T mistakenly pays D thinking

that he is his creditor or his creditor’s agent; or his creditor is infact P.

D becomes insolvent before T and P discover the true facts. If it were

held that T’s payment had the effect of discharging the debt owed to P,

P would have to look to an insolvent D, not to a solvent T, for

reimbursement. P would have good reason to feel aggrieved if that

were the case.

However there are situations where P has successfully recovered

from D the sum which T paid to D and where D’s gain was

commensurate with P’s loss. There are a number of old cases where

D had usurped P.’s office and where he was obliged to make restitution

of the sums which he had received from T “in the way of profits.” There
are other examples in the reports where D has been held to be

accountable because he had assumed to act with P's authority, for

example purporting to be his agent or his executor. It is not clear what

is the basis of these decisions. The fact that D was liable to make

restitution to P suggests T’s obligation to P was thereby discharged.

Any other result would be bizarre. If T’s debt to P was not discharged,

T would be able to recover his payment from D, on the ground of mistake

or total failure of consideration. On this hypothesis D may find himself

in the position of having to make restitution both to P and T. There are

the cases on attornment. If T transferred a ‘fund’ to D to hold to the

use of P, and D assented so to hold it then it is well established that

D must hold the fund to P’s use if he has by some act attorned to P.

In the nineteenth century unconvincing attempts were made to rationalize

the case law by finding a contract between P and D. Today these

cases are of very limited importance.

It may well be that they find their way into the modern law of

restitution, simply because, in the seventeenth century, indebitatus

assumpsit superseded account which had formerly been P’s appropriate

writ. The happiest explanation of this body of law is that the act of

attornment is effective to vest the equitable title in the fund in the plaintiff.

There is an isolated English dictum which suggests that, if T

dies intending to bequeath P £ 300, but by mistake, bequeathed £ 300

to D, then P is entitled to restitution from D. This is fragile authority.

The bequest is imperfect and unless the will can be rectified, to perfect

it would frustrate the policy embodied in the Wills Act 1837.

A fiduciary may receive a bribe from a third party or he may

divert an opportunity from a third party to himself which equity decrees

should have been acquired for his principal. He holds any asset gained

thereby as a constructive trustee. Equity deems the opportunity to

belong to the principal from the moment of its acquisition. It does so,

not only to prevent the fiduciary's unjust enrichment but to deter all

fiduciaries from the temptation of using their fiduciary office for their

own profit.

b. Benefits gained from wrong doing

The benefit gained by the defendant is the loss suffered by the

plaintiff, for he has paid money, rendered services or delivered goods

which the defendant has received from the plaintiff. In contrast if the

plaintiffs claim is based on the defendant’s wrongful act, there may or

may not be an equation between what the plaintiff has lost and what the

defendant wrongdoer has gained.

The plaintiffs claim may be based on the wrongdoer’s unjust

enrichment at his expense; for example a tort feasor may have converted

and sold the plaintiffs chattel or a fiduciary may have exploited the trust

property. There may then be an equation between the plaintiffs loss

and the defendant’s gain. But there may be no such equation. The

defendant may have made a gain from his wrongful act in circumstances

where the plaintiff suffered no or little loss. The plaintiffs claim must

then be founded on the defendant’s wrong, not on the ground that he

was unjustly enriched at the plaintiffs expense. None the less, he may

seek, not damages for loss suffered, but a restitutionary remedy, namely

that the defendant makes restituion of the benefit gained from the

wrongful act.

But not all wrongdoers are liable to make restitution. A plaintiff

may be wronged but his only claim will be for compensation for loss

suffered. A person, who has wrongfully repudiated his contractual

obligations, has never been required to disgorge his gain. Again not

all torts ground a restitutionary claim. In Stoke-on-Trent City Council

Vs W & F Wass Ltd.11 the Court of Appeal concluded that damages

were an adequate remedy even though the defendant had infringed the

plaintiff’s title to property. In contrast, even an honest fiduciary, who

profits from his fiduciary position, in circumstances where the

beneficiaries of the trust could not have made that profit, is a constructive

trustee of that profit. Equity is most protective of the interests of the

beneficiaries of a trust and does so by granting them compensatory or

restitutionary relief. Equity’s remedies are intended to deter a fiduciary

contemplating even the possibility of a breach of fiduciary duty, as well

as to strip the fiduciary of an unjust enrichment.

11. (1988) 3 All E.R. 394.

 Public policy similarly demands that criminals shall not benefit

from their crimes. For this reason they cannot succeed under the will

of a person whom they murdered. But it is uncertain whether they must

disgorge an enrichment made from the sale of their story to a tabloid.

C) Unjust Retention of the Benefit

It is not in every case where a defendant has gained a benefit

at the plaintiffs expense that restitution will be granted. It is only when

a court concludes it would be unjust for him to retain the benefit that he

must make restitution to the plaintiff. It is therefore necessary to give

content to the concept of unjust enrichment. The grounds and

boundaries of restitutionary claims were originally formed by the old

forms of action. For that reason money claims have hitherto been

treated differently from claims based on services rendered and goods

supplied. Now a days it is possible to identify substantive categories

which form the basis of the restitutionary claim that the defendant has

received a benefit which it is unjust for him to retain.

Quasi contractual claims

Quasi-contract is that part of restitution which stems from the

common ‘indebitatus counts’ for money had and received and for money

paid and from quantum meruit and quantum valebat claims. Law of

quasi-contract is seen to fall more appropriately within a wider body of

principles known as the law of restitution. The law of restitution

encompasses the law of quasi-contract together with a number of other

mainly equitable doctrines based on aspects of the law with respect to

trusts, fiduciary duties, tracing, acquiescence, contribution, subrogation

and so on. There are many restitutionary claims which are outside the

scope of quasi-contract.

This study deals only with quasi-contractual claims. Quasi-

contractual claims are those which fall within scope of actions for money

had and received or for money paid or of quantum meruit or quantum

valebet which are founded on the principle of unjust enrichment. The

action for money had and received lay to recover money which the

plaintiff had paid to the defendant on the ground that it had been paid

under a mistake or compulsion or for a consideration which had wholly

failed.

Hence, this thesis is confined only to the following Quasi-

contractual claims, namely

1. Claims for money paid under mistake

2. Claims for benefits conferred under compulsion

3. Claims under necessity

4. Claims under ineffective transactions

5. Claims against wrong-doers and

6. the defences