A quasi contract, also known as an implied-in-law contract, is a legal concept that is used when there is no formal contract between two parties. It is a type of contract that is not based on an agreement between the parties, but rather on the court’s perception of fairness and justice. In this article, we’ll discuss what a quasi contract is, how it differs from a formal contract, and when it may be used in legal proceedings.
Definition of a Quasi Contract
A quasi contract is a legal concept that is used to create obligations between two parties, even if there is no formal contract in place. Unlike a formal contract, which is based on an agreement between the parties, a quasi contract is based on the principles of equity and fairness.
In a quasi contract, one party is obligated to provide some benefit or service to the other party, and the other party is obligated to pay for that benefit or service. The obligation arises because it would be unfair for one party to receive a benefit or service without paying for it.
Difference between a Quasi Contract and a Formal Contract
The key difference between a quasi contract and a formal contract is that a quasi contract does not require an agreement between the parties. Instead, it is based on the court’s perception of fairness and justice.
In a formal contract, both parties agree to the terms of the contract, and those terms are legally binding. If one party breaches the contract, the other party can sue for damages or seek specific performance to enforce the terms of the contract.
In a quasi contract, however, there is no agreement between the parties. Instead, the court creates an obligation based on what it perceives to be fair and just. This means that a quasi contract may be used even if one party did not intend to create a contract.
When Can a Quasi Contract Be Used?
A quasi contract may be used in a variety of situations where one party has received a benefit or service from another party without a formal contract in place. Here are a few examples:
Unjust Enrichment:
If one party receives a benefit at the expense of another party, and it would be unjust for the first party to keep that benefit without compensating the other party, a quasi contract may be used to create an obligation to pay for the benefit.
Quasi-Contracts for Necessaries:
If one party provides necessities, such as food, clothing, or shelter, to another party who did not have the ability to pay for them, a quasi contract may be used to create an obligation to pay for those necessities.
Negotiations:
If two parties negotiate for the sale of goods or services, but do not reach a formal agreement, a quasi contract may be used to create an obligation to compensate the other party for any benefits received during the negotiation process.
Elements of a Quasi Contract
In order for a quasi contract to be created, there are several elements that must be present. These include:
Benefit Conferred:
One party must have provided a benefit or service to the other party.
Expectation of Payment:
The party providing the benefit or service must have expected to be compensated for that benefit or service.
Unjust Enrichment:
It would be unjust for the other party to retain the benefit or service without compensating the first party.
Limitations of Quasi Contracts
While quasi contracts can be useful in situations where there is no formal contract in place, they have several limitations. For example, quasi contracts cannot be used to enforce agreements that violate the law or public policy.
Additionally, quasi contracts may not be used in situations where there is already a contract in place. If there is a formal contract between the parties, that contract will govern their relationship, and a quasi contract cannot be used to override its terms.
Finally, quasi contracts are typically only used when there is no other remedy available. If there is a legal remedy available, such as a breach of contract claim, a quasi contract may not be necessary.
Conclusion
A quasi contract is a legal concept that is used to create obligations between two parties, even if there is no formal contract in place. It is based on principles of equity and fairness, and is used to prevent unjust enrichment. While quasi contracts have limitations and are not appropriate in all situations, they can be a useful tool in ensuring that parties are treated fairly and justly in situations where a formal contract is not in place.