Void Agreements and Quasi Contracts Under Indian Contract Law: A Complete Guide

You lend ₹10,000 to a friend. No written agreement, no interest, no formal terms — just trust. He promises to pay back next month. Next month comes. Nothing. Six months later, still nothing.

Now here is another one. You accidentally transfer ₹5,000 to the wrong person on a UPI app. They know it is not their money. They spend it anyway.

In both cases, someone has been enriched at someone else’s expense. In both cases, you want your money back. But in neither case do you have a proper contract to stand on.

Can the law help you? Yes. And that is exactly what quasi contracts are designed to do.

But before getting there, we need to understand another concept that sits nearby — void agreements. Because knowing what is legally dead helps you understand why the law had to create obligations even in the absence of a proper contract.

Let us take both, one at a time.

Part One: Void Agreements

What Is a Void Agreement?

The Indian Contract Act, 1872 defines a void agreement under Section 2(g) as: “An agreement not enforceable by law.”

That is a short definition, but it carries real weight. A void agreement is not a contract. It never was. The moment it falls under a category that the law refuses to recognise, it becomes legally dead — no rights arise from it, no obligations are created, and no court will enforce it.

Do not confuse this with a voidable contract (Section 2(i)), which is a valid contract that one party can choose to cancel — for example, a contract made under coercion. Voidable means capable of being voided. Void means it is already dead, whether the parties like it or not.

Types of Void Agreements Under the Indian Contract Act

The Act specifically lists out categories of agreements that are void. Here they are, with real examples that make the logic clear.

1. Agreement by a Minor — Section 11

Any agreement made with a person below 18 years of age is void from the very beginning — void ab initio, in legal language. The Supreme Court settled this definitively in Mohori Bibee v. Dharmodas Ghose (1903).

• Why? A minor cannot form the legal intent necessary for a contract.
• Real example: A 16-year-old signs a loan agreement with a moneylender for ₹2 lakhs. Even if the minor uses the money, the moneylender cannot enforce repayment through court. The agreement is void — end of story.
• The minor cannot ratify this agreement after turning 18 either. There is no backdoor to make it valid.

2. Agreement Made Without Consideration — Section 25

As a general rule, a promise made without something in return (consideration) is not enforceable. No consideration, no contract.

Exceptions exist though:

• A written and registered promise to compensate someone who has already done something voluntarily for the promisor
• A written and registered promise to pay a time-barred debt
• Gifts — which work under a different legal regime altogether

3. Agreements in Restraint of Marriage — Section 26

Any agreement that stops a person from marrying — or restricts their freedom to marry — is void.

• Real example: A man promises his bachelor friend ₹1 lakh if he never gets married. That agreement is void. The friend can take the money and get married the next week, and there is nothing the man can do in court.
• The law treats the freedom to marry as a basic personal right that no contract can take away.

4. Agreements in Restraint of Trade — Section 27

Any agreement that prevents someone from carrying on a lawful profession, trade, or business is void.

• Real example: An employer makes an employee sign a contract saying that after leaving the job, the employee can never work in the same industry anywhere in India for the next 10 years. That clause is void under Section 27.
• Exceptions: A partner can be restrained from carrying on a competing business while the partnership exists and even after it dissolves — within reasonable limits. Sale of goodwill agreements also create an exception where the seller agrees not to operate a competing business within specified local limits.
• Non-compete clauses in employment contracts routinely face challenge under this section in Indian courts.

5. Agreements in Restraint of Legal Proceedings — Section 28

You cannot contract away your right to go to court. Any agreement that takes away this right, or limits the time within which a person can sue, is void.

• Real example: A contract clause says “any dispute must be resolved within 6 months of it arising, failing which the right to sue is extinguished.” That clause is void — the Limitation Act sets out the time limits for legal action, not private parties.
• Exception: Arbitration agreements are valid — agreeing to arbitrate a dispute instead of going to court is not the same as giving up your legal rights. It is just choosing a different forum.

6. Agreements with Uncertain Meaning — Section 29

If the terms of an agreement are so vague that nobody can figure out what the parties actually agreed to, the agreement is void.

• Real example: “I will sell you some goods at a reasonable price sometime.” What goods? How many? When exactly? What counts as “reasonable”? A court cannot enforce this because it cannot determine what was agreed.
• Certainty is not optional in a contract. Courts need to be able to understand and apply the terms.

7. Wagering Agreements — Section 30

Betting and wagering agreements are void. You cannot go to a civil court in India to recover a gambling debt.

• Real example: Two friends bet ₹50,000 on the outcome of an IPL match. One wins. The other refuses to pay. The winner has no legal remedy — a court will not enforce a wagering agreement.
• Exceptions: Lotteries run by state governments under authorising statutes are valid. Horse racing bets, in some states where specifically permitted, are also outside Section 30’s reach.
• Note: This makes gaming and fantasy sports app disputes tricky legal territory, and courts continue to grapple with where these platforms fall.

8. Agreements to Do Impossible Acts — Section 56

An agreement to do something that is physically or legally impossible is void from the start.

• Real example: A agrees to bring back someone who has died, in exchange for payment. Physically impossible. Void.
• A separate rule applies when an act becomes impossible after the contract is formed due to events outside anyone’s control — this is the Doctrine of Frustration, also under Section 56. In those cases, the contract becomes void from the moment the impossibility arises.

Effect of a Void Agreement: Section 65

If a contract is discovered to be void after one party has already received some benefit under it, that party must restore the benefit or compensate the other party. The law does not allow someone to walk away with an unjust gain simply because the agreement turned out to be void.

Part Two: Quasi Contracts

What Is a Quasi Contract?

A quasi contract is not a contract at all. There is no agreement, no offer, no acceptance, no consideration. Nothing that looks like a contract from the outside.

But the law treats the situation as if a contract existed — because someone has received a benefit they are not entitled to keep, and allowing them to keep it would be unjust.

The legal principle underneath quasi contracts is: no one should be enriched unjustly at another person’s expense. In Latin — nemo debet locupletari ex aliena jactura. Courts have applied this principle in India for well over a century.

Quasi contracts are covered in Sections 68 to 72 of the Indian Contract Act, 1872. Each section creates a specific obligation without any agreement between the parties.

Types of Quasi Contracts

1. Supply of Necessaries to a Person Incapable of Contracting — Section 68

If someone supplies necessaries (food, shelter, medicine, clothing) to a person who cannot contract — a minor or a person of unsound mind — they can recover the cost from the property of that incapable person. Not from the person themselves, but from their estate or property.

• Real example: A shopkeeper supplies groceries to a household run by a 15-year-old whose parents are abroad. The parents cannot claim it was a minor’s void agreement and refuse to pay. The shopkeeper can recover from the minor’s property.
• This makes practical sense. If nobody could recover the cost of necessaries supplied to minors, no one would supply them. The result would be worse for the very people the law is trying to protect.

2. Payment Made by an Interested Person — Section 69

If one person pays money that another is legally obligated to pay, the person who paid can recover that amount from the one who was actually liable.

• Real example: Rohan owns land. The government threatens to attach the land because Rohan has failed to pay a tax that his tenant Suresh was legally supposed to pay under their lease. Rohan pays the tax to save his property. He can recover that amount from Suresh.
• The payer must be interested in the payment — meaning they had something to lose if they did not pay. A stranger who volunteers to pay someone else’s dues for no reason cannot use Section 69.

3. Obligation to Pay for Non-Gratuitous Acts — Section 70

If a person does something for another, not intending to do it as a gift, and the other person benefits from it — the beneficiary must pay for it.

Three conditions must be met:

• The act must not be done gratuitously (not as a favour or charity)
• The other person must have enjoyed the benefit of the act
• The person who did the act must not have intended to do it for free
• Real example: Priya, a contractor, mistakenly improves a boundary wall on her neighbour’s property instead of her own, thinking it is her wall. The neighbour uses the improved wall. Priya can recover the cost because the neighbour received a benefit and Priya did not intend to act gratuitously.
• The person need not have asked for the benefit. Receiving it and enjoying it is enough.

4. Liability of Person to Whom Money Is Paid or Thing Delivered by Mistake or Under Coercion — Section 72

This is the most practically common quasi contract situation. If someone receives money or goods:

• By mistake — they must return it
• Under coercion — they must return it
• Real example (mistake): You accidentally transfer ₹10,000 to the wrong bank account. The recipient has no legal right to keep it. Section 72 creates an obligation to return it, even without any contract between you.
• Real example (coercion): A municipal body illegally levies an extra tax, and a trader pays under protest to avoid having his goods seized. He can recover that amount under Section 72, even if he signed a receipt, because the payment was made under coercion.
• The Supreme Court has held in multiple cases that a payment made under “mistake of law” also falls under Section 72, meaning ignorance of legal rights that leads to an overpayment can also be recovered.

5. Finder of Goods — Section 71

A person who finds goods belonging to someone else, and takes them into their custody, has the same responsibilities as a bailee (someone who holds goods on another’s behalf). They must:

• Take reasonable care of the goods
• Try to locate the true owner
• Not use the goods for their own benefit
• Return the goods when the owner is found
• Real example: You find a wallet in a shopping mall. You take it home. You are now legally responsible for its safekeeping and for making reasonable efforts to find the owner. If the wallet gets damaged in your custody due to your negligence, you are liable.
• If the true owner cannot be found after reasonable efforts, and the goods are perishable, the finder may sell them. If the owner can be found, the finder can claim compensation for expenses incurred.

Void Agreements vs Quasi Contracts

These two concepts live in the same legal neighbourhood — situations where there is no proper enforceable contract — but they serve entirely different purposes.

Point	Void Agreement	Quasi Contract
Nature	An agreement that the law refuses to recognise	An obligation the law creates without any agreement
Origin	Parties tried to make a contract — and failed	No attempt at a contract at all
Legal status	Dead from the start — no rights, no duties	Creates rights and duties imposed by law
Governing sections	Sections 24–30, 56 of the Indian Contract Act	Sections 68–72 of the Indian Contract Act
Basis	Specific categories of unenforceable agreements	Principle of unjust enrichment
Example	A bet on a cricket match — unenforceable	Money paid by mistake — must be returned
What the law does	Refuses to give it effect	Steps in and creates an obligation where none existed

The Principle That Ties Quasi Contracts Together: Unjust Enrichment

Every quasi contract provision — from necessaries supplied to a minor all the way to money received by mistake — rests on the same moral logic: you should not be allowed to profit from someone else’s loss without a lawful reason to do so.

Courts in India have consistently applied this principle. The Supreme Court in State of Rajasthan v. Basant Nahata and several other decisions has held that the doctrine of unjust enrichment is a foundational principle in Indian contract law, not just a technicality.

It is also worth knowing that quasi contractual obligations are sometimes called restitutionary obligations — meaning the law is trying to restore the status quo, to put things back where they were before the unjust benefit was received.

Why Both Concepts Matter in Everyday Life

Void agreements and quasi contracts are not just law school topics. They show up constantly in real transactions:

• A landlord’s overbroad non-compete clause in a commercial lease — potentially void under Section 27
• A business partner who paid the company’s overdue government tax to avoid a freeze — can recover under Section 69
• An app that accidentally charges you twice — you have a quasi contractual right to the refund under Section 72
• A wildly vague service contract with no defined deliverables — likely void under Section 29
• A minor who took delivery of goods under a purchase agreement — the supplier can still recover from the minor’s property under Section 68

Knowing these provisions can save you from losing money, signing away rights you did not intend to give up, or failing to recover what is legitimately yours.