What is a Quasi Contract?
A quasi contract is a retroactive arrangement between two parties who have no previous obligations to one another, created by a judge to correct a circumstance in which one party acquires something at the expense of the other. The contract aims to prevent one party from unfairly benefiting from the situation at the other party's expense. These arrangements may be imposed when goods or services are accepted, though not requested, by a party—and the acceptance then creates an expectation of payment.
Example of a Quasi Contract
A classic quasi-contract circumstance might be created by the delivery of a pizza to the wrong address—that is, not to the person who paid for it. If the individual at the incorrect address fails to fess to the error, and instead keeps the pizza, he or she could be seen legally as having accepted the food, and thus be obliged to pay for it. A court could then rule to issue a quasi contract that would require the pizza recipient to pay back the cost of the food to the party who purchased it—or to the pizzeria, if it subsequently delivered a second pie to the purchaser. The restitution mandated under the quasi contract aims for a fair resolution of the situation.
A quasi contract is a court-imposed document designed to prevent one party from unfairly benefiting at another party's expense, even though no contract exists between them.
The Origin of the Quasi Contract
Under common-law jurisdictions, quasi contracts originated in the Middle Ages under a form of action known, in Latin, as indebitatus assumpsit, which translates to "being indebted" or "to have undertaken a debt." This legal principle was the courts' way of making one party pay the other as if a contract or agreement already existed between the two parties; the defendant’s obligation to be bound by the contract is seen as implied by law. From its earliest uses, the quasi contract was typically imposed in order to enforce restitution obligations.
Requirements for a Quasi Contract
Certain aspects must be in place for a judge to issue a quasi contract:
- One party, the plaintiff, must have furnished a tangible item or service to another party, the defendant, with an expectation or implication that payment would be given.
- The defendant must have accepted—or acknowledged receipt of—the item of value, but made no effort or offer to pay for it.
- The plaintiff must then express why it would be unjust for the defendant to receive the good or service without paying for it; in other words, to establish that the defendant received unjust enrichment.
Considering the example above, the individual who ordered the pizza and paid for it would have every right to demand payment from the individual who actually received the pizza; the first individual being the plaintiff, the latter being the defendant. A quasi contract, also known as an implied contract, would be handed down, requiring the defendant to pay restitution to the plaintiff. The restitution, known in Latin as quantum meruit (or "amount earned"), is calculated according to the amount or the extent to which the defendant was unjustly enriched.