What Is a Quasi Contract?

What Is a Quasi Contract?

Let me explain what a quasi contract is—it's essentially a court-forged agreement between two parties who never had a formal contract in place. You might hear it called an implied-in-law contract, and it serves as a remedy for disputes where no actual contract exists. As a judge, I would decide on this legal obligation for one party to compensate the other, making it a retroactive fix to situations where one party gains something at the other's expense.

These setups come into play when goods or services are accepted by someone, even if they weren't specifically requested. Once accepted, it creates an expectation that the provider gets paid.

Key Takeaways

Remember, a quasi contract is a backward-looking remedy for parties without a contract. Judges create it to correct imbalances where one acquires benefits unfairly. For it to apply, the plaintiff must have provided something valuable that the defendant knew they should pay for, and the defendant accepted it without offering payment.

Understanding Quasi Contracts

In common-law systems, quasi contracts trace back to the Middle Ages with the Latin term indebitatus assumpsit, meaning you've taken on a debt. This was the courts' method to force one party to pay another as if a contract had always been there. The obligation is implied by law, and from the start, it enforced restitution—ordering the defendant to pay back the plaintiff an amount called quantum meruit, based on how much the defendant was unjustly enriched.

We also call this a constructive contract because a judge builds it when no real contract exists between parties. But if there's already an agreement, no quasi contract gets created—it's unnecessary.

Purpose

The point of quasi contracts is to set obligations when one party gets a benefit or property from another without any agreement. If someone gives you something of value, knowingly or not, the assumption is a reasonable person would pay, return it, or compensate. These contracts protect the giver from being exploited and stop others from getting unjustly enriched.

Legality

Since it's built in court, a quasi contract is legally binding without either party agreeing to it. Its goal is fairness when one has an advantage over the other—the defendant pays restitution to the plaintiff to cover the item's value.

Requirements

For a judge to issue one, certain elements must align: the plaintiff suffers a loss from transferring something, the defendant accepts and keeps the value without trying to pay, and the plaintiff proves unjust enrichment. It can't be a gift, and the defendant must have had a choice to accept or reject the benefit.

Quasi Contract vs. Contract

Quasi contracts are only implied in law, ordered by a judge, with no actual contract existing—they're remedies for unjust enrichment disputes. Regular contracts can be express with clear terms both agree to, or implied through mutual assent without explicit words, initiated by the parties themselves, and they form a legal agreement that's enforceable.

Types of Quasi Contract

Under the Contract Act of 1872, sections 68 to 72 outline types like supplying necessities to incapables with recovery from their property, reimbursing payments made on another's behalf, compensating for lawful non-gratuitous acts, responsibilities of finders of goods like bailees, and repaying mistaken or coerced payments.

Advantages and Disadvantages of Quasi Contracts

On the plus side, they follow the unjust enrichment principle to stop one party from gaining unfairly, acting as a safeguard for innocent providers and ensuring compensation through binding court orders. Drawbacks include not applying in all cases, like negligent or unnecessary benefits, and limiting recovery to only what's received—no extra damages. If there's an express agreement, profits must be forfeited, and relief requires proving losses from the defendant's breach.

What Are Quasi Contracts?

Simply put, it's an implied or constructive contract where a court orders the defendant to pay restitution to the plaintiff when no real contract was there.

What Is a Quasi Contract in Simple Words?

It's a court-created obligation between parties, not from their agreement, to avoid one getting enriched unfairly.

What Is an Example of a Quasi Contract?

Say Person A verbally agrees to pay Person B $100 to help move, but cancels after B shows up and skips another job—a judge might impose a quasi contract for B to get paid if it's deemed unjust.

The Bottom Line

In essence, a quasi contract makes the defendant act as if a contract existed with the plaintiff to prevent unjust enrichment from circumstances or misfortune, rendered by a judge post-facto without a prior formal deal.