Quasi Contract

Reviewed by Komal | Updated on Aug 27, 2020

What is a Quasi Contract?

A quasi-contract is a retroactive agreement between two parties who have no prior contractual commitments. A judge develops it to rectify a situation in which one side acquires something at the detriment of the other.

The contract aims to stop one side from financially profiting from the situation at the expense of the other side. Such agreements may be enforced upon approval by a party providing goods or services, though not required. Instead, acceptance generates payment expectations.

Understanding Quasi Contracts

Quasi-contracts specify one party's duty to another where the latter is in control of the property of the original party. Such parties could not actually have had an understanding with each other beforehand.

The agreement is imposed by law through a judge as a remedy when Person A owes something to Person B because they come into possession of Person A's property indirectly or by mistake. The contract becomes enforceable if Person B decides to keep the item in question without paying for it.

Since the agreement is being established in a court of law, it is legally enforceable; neither of the parties has to provide consent. The quasi-contract's aim is to make a fair outcome in a situation where one party has an advantage over another. The defendant—the party who purchased the property—must pay damages to the claimant who is the wrong party to compensate for the item's value.

The implied contract is also known as a quasi-contract. This will be handed down ordering that the defendant pay the claimant damages. The restitution, known in Latin as quantum meruit or sum earned, is measured according to the amount or extent unfairly enriched by the defendant.

Requirements for a Quasi Contract

For a judge to issue a quasi-contract, here are certain things that should be in place:

  1. One individual, the claimant, must have provided another individual, or the defendant, with the hope or belief that payment will be rendered with a tangible good or service.

  2. The defendant must have recognised, or acknowledged, the value of the item, but made no attempt or offered to pay for it.

  3. The complainant will then explain why getting the good or service without paying for it is unfair for the defendant. The plaintiff will, in other words, prove that the defendant earned wrongful enrichment.