Key Takeaways

  • Quasi contracts are court-created obligations meant to prevent unjust enrichment when no actual contract exists.
  • U.S. law treats quasi contracts as legal obligations, not true contracts, since consent is not required.
  • Common quasi contract examples include emergency medical treatment, mistaken payments, and reimbursement for preserving another’s property.
  • Legal sections (such as 68–72) outline obligations when minors, lost property, coercion, or mistakes are involved.
  • Quasi contracts differ from express or implied contracts because they are imposed by law rather than mutual agreement.

Types of quasi contract in business law include any agreement established by the court system between two parties who were not previously obliged to one another for any reason. Quasi-contracts are ordered by a judge in situations in which one party has another person's property and thus must provide restitution because he or she has unjustly benefited at the other party's loss.

This type of contract does not need agreement to be legally valid, unlike other contracts. Quasi-contracts are sometimes called constructive contracts and are not used in cases where an actual contract is already implied or in writing.

U.S. Examples of Quasi-Contracts

The United States does not actually consider a quasi-contract a contract. Rather, they are legal obligations that are designed to support public policy or prevent one party from being unjustly enriched at the loss of another. A contract requires consent in the U.S. to be legally valid. For example, if you receive medical treatment while unconscious, you are unable to consent to the care but still must pay the hospital bill. This constitutes a quasi-contract.

A quasi-contract can only be imposed if these conditions are met:

  • One party gave another party a valuable item or service in exchange for an implied promise of payment
  • The item was received and the party agreed to pay for it, but failed to do so
  • The plaintiff is able to prove that the defendant received unjust enrichment by breaking the promise to pay

Common Types of Quasi Contracts

Courts typically recognize several main types of quasi contracts, each designed to remedy different forms of unjust enrichment:

  1. Supply of Necessaries (Section 68): When essentials such as food, clothing, or shelter are provided to a person unable to contract (like a minor or mentally incapacitated person), the provider must be compensated.
  2. Payment by Interested Person (Section 69): If someone pays another’s debt to protect their own interest—for example, a tenant paying the landlord’s overdue mortgage to avoid eviction—they are entitled to reimbursement.
  3. Obligation to Pay for Non-Gratuitous Acts (Section 70): If services or goods are provided with an expectation of payment, and the recipient benefits from them, the law requires compensation even without a prior agreement.
  4. Responsibility of Finder of Goods (Section 71): A person who finds and takes custody of lost property has duties similar to a bailee and may recover reasonable expenses incurred in preserving the property.
  5. Payment or Delivery by Mistake or Coercion (Section 72): If money or property is delivered under error or coercion, the recipient must return it. For example, overpayment of taxes or receiving funds by mistake must be corrected.

These categories ensure fairness and discourage unjust enrichment, forming the backbone of how courts apply quasi contract principles.

Laws Governing Quasi-Contracts

One law about quasi-contracts is Section 68. This states that if a person who cannot enter a contract or anyone that person supports is given something of value, the person who provides the item in question must be reimbursed.

For example, if a minor is supported financially by another person, the latter individual must be reimbursed with the minor's property. The minor's parent or guardian will also be held financially responsible. However, a claim cannot be made unless the individual in question is able to pay it back.

Another relevant law is Section 69, which requires a person to pay back money given to him by another person. Let's say you live in a rental house owned by a landlord. The bank is going to seize the house because the landlord has failed to pay the mortgage. If you pay the past-due amount so your lease will not be terminated, your landlord is legally required to reimburse you for that amount.

If you receive a joint legal fine with another person and only one person has the money to pay, the other person will be responsible for the whole amount and is not legally entitled to reimbursement.

If you save another person's property from natural disaster, that person must compensate you unless the court finds that you did so with gratuitous intention.

Section 71 law governs quasi-contracts associated with those who find lost items. If you keep something you found on the ground that belongs to someone else, you must return it by law and cannot use it for your own purposes.

Let's say you find a diamond ring on the floor of a business. You give it to the business owner, who places an advertisement in an attempt to find the owner of the ring. If no one claims the ring for several weeks, the business owner must return it to you. However, you are responsible for reimbursing the business owner for the cost of placing the newspaper ad.

If you own a store and a customer leaves something behind, you are liable if the item then gets lost or stolen if you know it has been left behind but fail to demonstrate ordinary care.

Section 72 law refers to the liability that exists when someone is paid or receives property under coercion or accidentally. This amount must be returned or repaid.

For example, if you overpay your taxes because of error, the authorities are required to reimburse you for the amount in question. If someone coerces you to purchase something, they are legally required to reimburse you.

Keep in mind that Section 72 concerns both mistakes of law and mistakes of fact. In both cases, the property in question must be restored.

Quasi Contract vs. Implied and Express Contracts

Quasi contracts differ from other contract types in several important ways:

  • Express Contracts: These involve explicit terms, either oral or written, where both parties agree voluntarily.
  • Implied Contracts: These arise from conduct or circumstances that show a mutual intent to be bound, even without written terms.
  • Quasi Contracts: Unlike the other two, these do not stem from agreement or conduct. Instead, they are obligations imposed by law to correct inequity.

For example, an express contract exists if you hire a contractor and sign a written agreement. An implied contract may arise if you order a meal at a restaurant and are expected to pay. A quasi contract example would be if someone mistakenly deposits money into your account; even though no contract exists, the law obligates you to return it.

Advantages and Limitations of Quasi Contracts

Advantages:

  • Prevents unjust enrichment and promotes fairness.
  • Provides a legal remedy in situations where no valid contract exists.
  • Protects vulnerable parties such as minors or incapacitated persons.
  • Encourages ethical behavior by requiring restitution.

Limitations:

  • Remedies are limited to reimbursement or compensation, not damages for lost opportunities.
  • Courts must carefully evaluate whether the enrichment was truly unjust.
  • Cannot override valid contracts; if a real contract exists, quasi contract principles do not apply.
  • May create complexity in proving benefit and expectation of payment.

Frequently Asked Questions

  1. What is a quasi contract example in business law?
    A common quasi contract example is when a supplier provides essentials like food to a minor or if someone mistakenly pays another’s debt; the law requires repayment.
  2. How does a quasi contract differ from an implied contract?
    An implied contract arises from conduct showing mutual consent, while a quasi contract is imposed by law without consent to prevent unfair benefit.
  3. Can quasi contracts award damages?
    Generally, quasi contracts only provide restitution (repayment or reimbursement), not broader damages for lost profits or opportunities.
  4. What laws govern quasi contracts?
    Sections 68–72 cover scenarios such as supplying necessaries, mistaken payments, coercion, and obligations of finders of lost property.
  5. Are quasi contracts enforceable in U.S. courts?
    Yes, but they are treated as legal obligations, not actual contracts. Courts impose them to ensure fairness when no contract exists.

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