Liability to pay for non-gratuitous acts
Section 70 of the Indian Contract Act, 1872
In one minute
A person does work for you, or hands you goods, expecting to be paid. There is no valid contract. You accept the work or goods and use them. Section 70 says you must pay for them, or give them back.
Three conditions must be met: a lawful act, no intention to give it free, and a benefit that you enjoyed. In exams, the three conditions and State of West Bengal v. B.K. Mondal & Sons earn the marks. In real life, it protects contractors and suppliers whose contract fails for a technical reason.
Exam focus
- Frequency: No data
- Usually asked as: No data
Legal provision
- Section 70: where a person lawfully does anything for another person, or delivers anything to him, not intending to do so gratuitously, and such other person enjoys the benefit of it, the latter must make compensation to the former for the thing done or delivered, or restore it.
- Illustration (a): A, a tradesman, leaves goods at B's house by mistake. B treats the goods as his own. He is bound to pay A for them.
- Illustration (b): A saves B's property from fire. A is not entitled to compensation from B, if the circumstances show that he intended to act gratuitously.
Meaning and definition
Section 70 is the widest of the five quasi-contractual claims. It covers any lawful act or delivery that was not meant as a gift. A "gratuitous" act is one done free of charge, as a favour or gift. A "non-gratuitous" act is one done in the expectation of payment.
The reason for the rule is unjust enrichment. The person who accepted the benefit should not keep it for nothing. The Supreme Court said in State of West Bengal v. B.K. Mondal & Sons that the section applies to "cases where there is no valid contract". The claim is for compensation or restoration. It is not for damages for breach of contract.
The flowchart shows the questions that a court asks.
- 1. Did the claimant lawfully do something for the other person, or deliver something to him?No: there is no claim.
- 2. Did he act without intending it as a gift?No, it was meant as a gift: there is no claim (illustration (b)).
- 3. Could the other person have refused or returned the thing, and did he instead accept and enjoy the benefit?No, he had no choice or did not accept: there is no claim.
- 4. Is there a valid contract that fixes the payment for the same work?Yes: the claim lies under the contract and not under section 70.
- 5. All the tests are met.The other person must pay compensation for the thing done or delivered, or restore the thing.
Detailed explanation
Step 1: the act must be lawful
The claimant must "lawfully" do something or deliver something. The Supreme Court in State of West Bengal v. B.K. Mondal & Sons explained that the thing must not be done fraudulently or dishonestly, and it must not be done gratuitously. It also held that "lawfully" only means that a lawful relationship is born when the other person accepts and enjoys what is done.
The act is lawful if no law forbids doing it or taking its benefit. In that case the State argued that it could not be made to pay because its officers had not followed the formalities of section 175(3) of the Government of India Act, 1935. The Court held that the formalities govern contracts. They do not forbid the State from taking the benefit of work done at its request.
Step 2: the act must not be meant as a gift
The claimant must not intend to act gratuitously. The court reads this from the circumstances. A contractor who submits an estimate and a bill, and who has done similar work for payment before, plainly expects to be paid. A neighbour who helps in an emergency, out of goodwill, does not.
Example. Ravi saves Anitha's furniture from a fire in her godown because he is a friend. He cannot later claim a fee. Section 70 gives nothing for an act meant as a favour (illustration (b)).
Step 3: the other person must voluntarily accept the benefit
This condition protects the person who is asked to pay. The Court said that the person made liable "always has the option not to accept the thing or to return it". Liability arises only when he voluntarily accepts the thing or enjoys the work done.
This also explains why section 70 does not cover services imposed officiously on another person. For a minor, the Court noted that he is excluded from section 70 because his case is provided for by section 68, and he cannot voluntarily accept a benefit.
Example. A tradesman leaves goods at B's house by mistake, and B treats them as his own. He has accepted and enjoyed them and must pay (illustration (a)). If B had sent them back at once, section 70 would not apply.
Step 4: what the claimant gets
The claim is for compensation for what was done or delivered, or for the return of the thing. It is not a claim for specific performance, and it is not a claim for damages for breach, because there is no contract. The Court in Mulamchand v. State of M.P. (1968) said that the obligation rests on "a third category of law, namely, quasi-contract or restitution".
A request from an officer is not an element of section 70. An invalid request is no request at all, and the court judges the parties as if there were no contract.
Step 5: Government and the formalities of Article 299
The Government of India Act, 1935 required contracts of the State to be made in a prescribed form (section 175(3)). Article 299(1) of the Constitution now plays the same role. The Court in B.K. Mondal held that the State is subject to section 70 like any citizen, and that section 70 supplements these formalities. Without it, the working of Government would suffer when officers must act urgently or by letter.
Step 6: when a contract exists, section 70 does not apply
If a valid contract fixes the payment, the claimant must sue on the contract. In Alopi Parshad and Sons Ltd. v. Union of India (1960) the Court said that quantum meruit is awarded where the price is not fixed by a contract. The Court in Mahanagar Telephone Nigam Ltd. v. Tata Communications Ltd. (2019) noted that each section in this chapter assumes there is no contract, and held that a dispute under a purchase order was governed by section 74 and the contract cap.
The three conditions at a glance
| Condition | What it means | Example |
|---|---|---|
| Lawful act or delivery | Something done or delivered for another, not forbidden by law and not done dishonestly | Building a shed at the State's request |
| Not meant as a gift | The claimant expected payment, judged from the circumstances | A contractor who sends an estimate and a bill |
| Benefit enjoyed | The other person could refuse or return, and voluntarily accepted and used it | The State takes over and uses the shed |
Don't confuse: section 70, a contract and a gift
All three involve something being given for another. They differ in the promise and the claim.
| Point | Contract | Section 70 | Gift or favour |
|---|---|---|---|
| Promise to pay | Yes, express or implied | No promise needed | None |
| Basis of claim | The agreement | Acceptance and enjoyment of a non-gratuitous benefit | None |
| Relief | Price, damages or specific performance | Compensation or restoration | None |
Inside the idea. A firm repairs a stretch of a municipal road on an official's oral request, expecting the usual rate. No valid contract exists. The municipality opens the road and uses it for months. It must pay under section 70.
Just outside it. A volunteer cleans a temple tank for free on a festival day. He meant it as a gift, so he cannot later ask the trust to pay.
Common mistakes
- Thinking that section 70 needs a defective contract. It applies even when there was never any contract.
- Claiming damages for breach under section 70. The claim is for compensation or restoration.
- Forgetting that the receiver must have a choice and must voluntarily accept the benefit.
- Using section 70 where an express contract fixes the price. The claim then lies under the contract.
Apply it
Problem
Sai Constructions builds a compound wall for a Government school in Warangal on the oral request of the District Education Officer. No contract is executed in the form that Article 299(1) of the Constitution requires. The school uses the wall for two years. The Government refuses to pay the bill of Rs 4,50,000, saying there was no valid contract. Can Sai Constructions recover?
Issue. Is the Government liable under section 70 despite the absence of a valid contract?
Rule. Where a person lawfully does something for another, not intending to act gratuitously, and the other enjoys the benefit, the other must pay compensation (section 70). The formalities for Government contracts do not stop a claim under section 70 (B.K. Mondal).
Application. Building the wall was lawful. Sai Constructions is a firm of builders and sent a bill, so it did not mean the work as a gift. The school could have refused the wall, but it used the wall for two years. All three conditions are met.
Conclusion. Sai Constructions can recover reasonable compensation for the wall under section 70. It cannot sue on the invalid contract or claim damages for breach.
Leading case laws
- State of West Bengal v. B.K. Mondal & Sons (1962)
Facts. In 1944 a firm of contractors built a kutcha road, guard room, office, kitchen and rooms at Arambagh and storage sheds at Khanakul for the State's Civil Supplies Department. It claimed Rs 19,325 on two unpaid bills. The contracts did not satisfy section 175(3) of the Government of India Act, 1935.
Principle. Section 70 has three conditions, and it applies where there is no valid contract. The State had accepted and used the work, so it had to pay. AIR 1962 SC 779.
Why it matters. It is the leading case on section 70. The State appeal failed, and the Court dismissed it with costs.
- Mulamchand v. State of M.P. (1968)
Facts. The Supreme Court considered a section 70 claim against a State where the contract did not comply with section 175(3). (1968) 3 SCR 214.
Principle. The claimant cannot sue for specific performance or for damages, because there is no contract. His claim rests on quasi-contract or restitution.
Why it matters. It states the nature of the section 70 claim.
- Alopi Parshad and Sons Ltd. v. Union of India (1960)
Facts. Agents supplied ghee under a contract, and an arbitration award gave them a quantum meruit sum. The Supreme Court set the award aside. (1960) 2 SCR 793.
Principle. For work done under a contract that fixes the payment, a quantum meruit claim cannot replace the contract rate.
Why it matters. It marks the limit of section 70 and of quantum meruit.
- Mahanagar Telephone Nigam Ltd. v. Tata Communications Ltd. (2019)
Facts. MTNL retained money from Tata Communications' bills under a purchase order that capped liquidated damages at 12 per cent. The Supreme Court decided on 27 February 2019.
Principle. The Court said each section in this chapter assumes no contractual relationship. It held that section 74 governed, so only the contract figure could be claimed and the excess was refunded.
Why it matters. It supports the rule that a party governed by a contract must claim under the contract.
How to write this answer in the exam
5-mark answer
- State section 70 in your own words.
- List the three conditions.
- Give the Act's illustrations (a) and (b).
- Add B.K. Mondal in one line.
10-mark answer
- Place section 70 among the quasi-contractual claims.
- Explain each of the three conditions, with the voluntary acceptance safeguard.
- Explain the claim: compensation or restoration, not damages.
- Explain Government contracts and the formalities of section 175(3) and Article 299.
- State the limit: no section 70 claim when a contract governs.
- Close with B.K. Mondal, Mulamchand and Alopi Parshad.
Key points to remember
- Section 70 has three conditions: a lawful act, no intention to give it free, and a benefit enjoyed.
- The receiver must be free to refuse or return, and must voluntarily accept.
- The claim is for compensation or restoration, not damages for breach.
- It applies where there is no valid contract, including a Government contract made without the prescribed form.
- It does not apply where a valid contract fixes the payment.
- A minor is outside section 70 because section 68 provides for his case.
Quick self-test
1. What three conditions does section 70 require?
The claimant lawfully did something for, or delivered something to, another. He did not mean it as a gift. The other person enjoyed the benefit.
2. A neighbour saves your goods from a fire out of goodwill. Can he claim payment?
No. He acted gratuitously (illustration (b)).
3. Can the State escape section 70 because its officers did not follow the form for Government contracts?
No. It must pay if it voluntarily accepted and enjoyed the work (B.K. Mondal).