Quasi-Contract Types: Everything You Need to Know
Quasi-contract types are when one party has an obligation to another party that's imposed by the law and separate from the agreement between the two parties.3 min read
2. Quasi Contract Type: Obligation to Pay for Nongratuitous Act
3. What Is a Contract?
4. What Are Implied Contracts?
5. What Are Quasi-Contracts?
Updated October 27, 2020:
Quasi-contract types are when one party has an obligation to another party that's imposed by the law and separate from the agreement between the two parties. If one person isn't capable of entering into a contract, the supplier can recover the property's price from the incapable person.
Quasi Contract Type: Payment by an Interested Person
Someone who's interested in monetary payment from another person who's bound by law to pay them is entitled to be reimbursed by the other person. For example, if a consignee had a fire in their vehicle during transit and suffered loss, the insurer can claim the loss so they can get compensated.
Quasi Contract Type: Obligation to Pay for Nongratuitous Act
If a person does something under the law for another person or delivers them something without having the intention of doing it gratuitously, the receiver is bound by law to pay the giver for delivering their product or service. If a tradesperson accidentally leaves their goods at another person's house, that person can't treat them as their own unless they pay for them. According to Section 71 of the Indian Contract Act 1872, someone who finds goods that don't belong to them and takes them has similar responsibilities as a bailee.
This section states that anyone who receives something that was delivered under coercion or by accident needs to return or repay it. For example, say a railroad company won't deliver specific goods to a consignee except if they get paid for the illegal charge of the carriage. The consignee will then pay the sum that was charged to receive the goods that he's estimated to recover, which means many of the charges were illegal.
What Is a Contract?
There are three different types of business contracts, which include the following:
- Implied contracts
- Express contracts
A contract is an agreement that's legally enforceable between two or more parties. It's often a written document, but it can also be verbal in some cases. Written contracts are the method that's preferred since they offer the most legal protection to both parties. Some contracts need to be in writing, such as sales agreements, business contracts, and lease agreements. Express contracts can be either an oral or written agreement between the two parties. They can also be formed orally if a written agreement isn't necessary according to the statute of frauds.
What Are Implied Contracts?
Implied contracts are based on the conduct of the parties. If one or more parties have an intent to enter into the agreement, the contract can be implied even if there's no oral or written agreement. Implied contracts aren't any less binding than express contracts are.
What Are Quasi-Contracts?
A quasi-contract is a type of contract and acts to have the same results as a regular contract does, but it's not considered a contract in the traditional sense. Instead, this is formed by the court so unjust enrichment can be avoided. These are often used in situations where there's no implied or express contract that will cause an unjust result. It is a form of equitable relief and lets the plaintiff recover the value that a defendant might not be obligated to pay otherwise. This contract is formed by a court order instead of an agreement the parties make.
The contract will become a quasi-contract when there aren't any official agreements between the parties when it comes to payment disputes over services or goods. The goal in creating these contracts is to prevent a party from benefiting from a situation when they shouldn't. This type of contract can offer less recovery than a regular contract, however. This is due to a traditional contract having their agreement terms laid out with both parties agreeing to them, even if it is just a verbal agreement.
In a quasi-contract, there will be just enough recovery to prevent a party from being unjustly riched. In a regular contract, a party can recover everything they're entitled to, in addition to labor costs or other materials needed to complete the project that was originally agreed upon, but that's it.
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