What is a Quasi Contract?
A contract implied in law is also called a quasi-contract, a legal remedy for a situation where two parties have no contract. Still, one party benefits unfairly from the other. A quasi-contract is not a real contract but a judicial decision that one party should pay the other. This way, a quasi-contract prevents the unjust enrichment of one party at the cost of the other.
This kind of legal obligation may arise when a party receives goods or services they did not ask for but accept them anyway. The acceptance then implies that the receiving party should pay the providing party.
Understanding Quasi Contract
A quasi-contract is a legal obligation imposed by a court when there is no actual contract between two parties, but one party has gained something at the expense of the other. A quasi-contract is also called a contract implied in law or a constructive contract. The purpose of a quasi-contract is to prevent unjust enrichment and ensure fairness.
A quasi-contract arises when one party possesses the property of another party without their prior consent. The property could have been transferred by mistake or without an intention to create a legal relationship. The court will then order the party with the property to compensate the original owner.
The parties' consent is not required for a quasi-contract, as it is created by law and not by agreement. The court will determine the compensation amount based on the quantum meruit principle, which means "as much as he deserves." The compensation will be equal to the value of the property or the benefit received by the party who has the property.
Advantages of a Quasi Contract
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It prevents one party from taking undue advantage of the cost of other parties. This happens because quasi-contracts are based on the unjust enrichment principle.
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Quasi-contracts are created by the court. Therefore, no other parties involved disagree and everyone has to comply with the contracts.
Requirements for a Quasi Contract
In order to issue a quasi-contract, it is necessary to fulfill the following requirements -
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The plaintiff must have delivered services or tangible goods to the defendant, expecting payment in return.
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Additionally, the plaintiff must demonstrate that the defendant would unfairly benefit from receiving the goods or services without compensating for them.