Key Takeaways

  • A quasi contract is not an actual contract but a legal obligation imposed by courts to prevent unjust enrichment.
  • Courts may impose quasi contracts when one party benefits unfairly at another’s expense, even without a written or verbal agreement.
  • There are several types of quasi contracts, including obligations to pay for necessities, reimbursement of payments made on another’s behalf, compensation for benefits received, and wrongful conversion of goods.
  • Quasi contracts are rooted in equity and fairness, ensuring no party takes advantage of another due to the absence of a formal agreement.
  • Remedies in quasi contract cases typically involve monetary compensation (restitution) rather than enforcement of specific performance.

The different types of quasi contract are not technically contracts. Rather, it is an obligation created by law when an agreement has been overlooked. In the absence of a legally binding contract, some obligations may still be imposed by law. These obligations are similar to those created by a contract, otherwise known as quasi contracts. Typically, contracts can only be enforced when all elements of a valid contract are present. 

Types of Quasi Contracts

When someone is unable to enter into a contract, that person is not obligated to reimburse the person he or she is bound to support. Here's an example:

  • Midas was deemed unfit to raise his children. They live with their mother now and three months have passed without their school tuition being paid. Given the decree regarding his inability to raise his children, Midas cannot be made personally liable for the tuition fees.

When someone is seeking a sum of money that is bound by law for payment, he or she is also entitled to reimbursement from another. Here's an example:

  • Let's say Daniel is bound by law to make monthly child-support payments. One month, he comes up short and his friend Sally makes the payment for him. As soon as she's discharged his debt, Sally will be entitled to reimbursement from Daniel. If he does not repay her, she may want to take action against him.

Here's another example under a similar pretense:

  • Julie kept her car in Johnny's garage while he was renovating his house. As Johnny was attempting to move her car for safekeeping, he crashed it into a construction vehicle. Although Johnny took Julie's car to the repair shop, she wound up incurring a bill for $694. In this instance, Julie may be entitled to reimbursement from Johnny.

In effect, when someone does something for another or delivers something to them, without the intent of doing so gratuitously, and the other person enjoys some type of benefit from their action, the recipient will be bound to compensate the person who delivered. Here's another basic example to illustrate this point:

  • Let's say Roman went to the farmers market and then decided to visit Kris on his way home. Upon the completion of his visit with Kris, Roman forgot to take his vegetables with him. Kris, instead of returning them to Roman, decides to use the vegetables to make a delicious stir-fry. In this example, Kris must compensate Roman for his vegetables. 
  • In the same example, if Kris called Roman and asked him what he should do with the vegetables, and Roman told him to eat them, Kris would not be responsible for the cost of the vegetables.

Legal Basis of Quasi Contracts

Quasi contracts are recognized under the principle of quantum meruit, which means "as much as is deserved." Courts impose these obligations to restore fairness when one party benefits without proper justification. Unlike standard contracts that arise from mutual agreement, a quasi contract arises by operation of law. For example, if someone receives services without requesting them but knowingly accepts and benefits from them, the court may require payment to prevent unjust enrichment.

Wrongful Conversion

Whenever someone finds the goods of another and takes them into their custody, they become responsible for them. They become bound to care for those goods as anyone with prudence would. If he or she neglects the goods they've taken into their custody, they set themselves up to be labeled as guilty of wrongful conversion. 

Likewise, if the one who finds the goods does not try to locate the owner of the goods, he or she will be found guilty of wrongful conversion. Here's an example:

  • Leonard was walking to the train station and found a purse on the side of the road. Inside the purse, he found $200, a driver's license, and a notebook. At this moment, it became Leonard's responsibility to track down the owner or take the purse to the local police station. At no point does Leonard become entitled to the contents of the purse. 
  • In a different kind of example, let's say Leonard sold flowers at the local farmers market. One afternoon, a lady mistakenly left a carton of vegetables at Leonard's stand. He tried to track down the lady, to no avail. Since he didn't have a refrigerator there, he knew the vegetables would go bad. Only after he spent time trying to track down the lady did he decide to sell the vegetables she left behind. In this instance, he may not be found of wrongful conversion. 

Other Common Types of Quasi Contracts

Beyond wrongful conversion, courts have identified several situations where quasi contracts apply:

  • Obligation to Pay for Necessaries: If a person provides essentials such as food, shelter, or medical services to another who cannot contract (e.g., minors or those incapacitated), the provider is entitled to reimbursement.
  • Reimbursement for Payments Made: When one party pays a debt or legal obligation on behalf of another, they may seek repayment. For instance, if a neighbor pays your overdue property tax to prevent foreclosure, you are obligated to reimburse them.
  • Compensation for Non-Gratuitous Acts: If someone performs work or delivers goods not intended as a gift, and the recipient benefits, the law may impose a duty to pay.
  • Unjust Retention of Benefits: When one party mistakenly delivers goods or money, the recipient cannot retain them without payment or return.

These examples illustrate that quasi contracts focus on fairness rather than mutual consent.

Quasi Contract vs. Actual Contract

A quasi contract differs significantly from an actual contract:

  • Consent: Real contracts arise from mutual agreement, while quasi contracts are imposed by the court.
  • Purpose: Contracts enforce agreed terms; quasi contracts prevent unjust enrichment.
  • Enforcement: Contract remedies may include damages or specific performance, but quasi contracts typically allow restitution or reimbursement.
  • Examples: A lease agreement is an actual contract; being required to pay for mistakenly delivered goods is a quasi contract.

Remedies Under Quasi Contracts

The primary remedy in quasi contract disputes is restitution. Courts seek to restore the injured party to the position they were in before the unjust enrichment occurred. This is usually achieved through monetary compensation rather than enforcement of services or delivery of goods. For example, if a contractor mistakenly improves the wrong property, the benefiting homeowner may be ordered to pay the reasonable value of the improvements.

Frequently Asked Questions

  1. What is a quasi contract in simple terms?
    A quasi contract is a court-imposed obligation requiring payment or restitution when one party benefits unfairly at another’s expense, even without an agreement.
  2. How is a quasi contract different from a regular contract?
    A regular contract requires mutual consent, while a quasi contract is imposed by law to prevent unjust enrichment.
  3. What are the main types of quasi contracts?
    Examples include obligations to pay for necessaries, reimburse payments made on another’s behalf, compensate for benefits received, and wrongful conversion of goods.
  4. Can quasi contracts be enforced in court?
    Yes, courts enforce quasi contracts by ordering restitution or repayment, ensuring fairness between the parties.
  5. Why are quasi contracts important in law?
    They fill gaps where no valid contract exists, ensuring fairness and preventing one party from unfairly profiting at another’s expense.

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