Types of Quasi Contract in Business Law
Types of quasi contract in business law include any agreement between two parties who were not previously obliged to one another for any reason.3 min read
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
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.
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