Quasi Contract: Everything You Need to Know
The term “quasi contract” refers to an agreement that exists between two parties who have not previously had obligations to each other.4 min read
The term “quasi contract” refers to an agreement that exists between two parties who have not previously had obligations to each other. This agreement is created by the court system, specifically imposed by a judge, in order to correct a situation in which one party owes something to the other party because they are in possession of that person's property.
People who are involved in a quasi-contract do not create the agreement themselves. Since it is imposed by the court, the individuals do not need to agree to the contract for it to be legally enforceable. Quasi-contracts enforce fairness when one party benefits unjustly through a loss to another.
Quasi-contracts are also called implied contracts. When they are imposed, the defendant must pay an amount of restitution to the wronged party, or the plaintiff. This repayment is known as quantum meruit and is based on the amount of the money or value of the item that the defendant acquired unfairly.
Another name for a quasi-contract is a constructive contract. It may be created when there is no existing true contract. However, if a real contract exists, which may be implied or in writing, a quasi-contract may not be imposed.
Quasi-Contracts Through History
The first example of quasi-contracts originated in the Middle Ages from a law called indebitatus assumpsit. If the plaintiff had been paid money or been given property by the defendant, with the agreement that the defendant was paying the plaintiff in exchange for a service or other form of property, the court recognized that an implied contract existed and therefore used indebitatus assumpsit to make sure reparations were made. This quasi-contract was most commonly used to enforce agreements regarding restitution.
There are several requirements that must be met in order for a quasi-contract to be imposed:
- The plaintiff must have provided a service or given an item with value to the defendant, with the implied promise that they would receive payment in exchange.
- The defendant must have agreed to this promise and received the item or service, but failed to pay.
- The plaintiff must explain to the court why it is unfair that the defendant received the service or item of value without paying the plaintiff. Therefore, unjust enrichment on the defendant's part took place.
What Is Unjust Enrichment?
When the term “unjust enrichment” is used, it means that one party has received some type of benefit either by accident or because of another person's bad luck. The unjustly enriched party has received a service or item without paying or earning it. Therefore, it is morally incumbent upon him to either return it or pay for it.
There are five things that must be proven in order for unjust enrichment to take place:
- The defendant has received a service or item from which they have benefited.
- The plaintiff has been disadvantaged or suffered a loss as a result of this unfair benefit to the defendant.
- The plaintiff must prove that the benefit was received unfairly.
- There is no apparent reason for the benefit to have been received, nor for the defendant's disadvantage because of it.
- The defendant has not made any attempt to provide repayment or restitution.
The restitution that is given to the plaintiff when unjust enrichment has taken place is whatever payment is needed to fairly compensate the plaintiff for the service or item that the defendant received, thereby creating an injustice. This can be either payment for the service or item or the return of the item, whichever is more practical and appropriate.
Contracts That Are Implied-In-Law vs. Implied-In-Fact
A contract that is implied-in-law was not intended to be created, at least by one of the parties, but should be created by a judge in order to promote justice. A contract that is implied-in-fact is a contract that is unwritten but still exists between the parties due to a consensual transaction, and may be enforced in court.
The difference between the two may seem complicated, but it is important in terms of legal enforcement. For one thing, courts may not enforce a quasi-contract against the federal government. The doctrine of Sovereign Immunity prevents the federal government from being sued without its consent.
However, if the contract is determined to be implied-in-fact, a court could rule that consent was given. A quasi-contract does not claim that there was an unwritten agreement in effect and would therefore not be enforceable against the government.
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