Quasi Contract: Definition, Importance & Features Explained

What Is a Quasi Contract in Law?

A quasi-contract refers to a retroactive arrangement between two parties, where there was no prior obligation contractual commitment between them. It can also be defined as the rights and liabilities between two parties where there is no formal contract. A quasi-contract is also referred to as an implied contract.

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Quasi Contract history

The law of quasi-contract is medieval when it was known as indebitatus assumpsit.

Quasi Contract example

Suppose, Mohan Lal and Ramapati enter a contract under which Mohan Lal agrees to deliver a case of sweets at Ramapati’s home in exchange for Rs 1,000. By mistake, Mohan Lal delivers the case at Suresh’s home instead of Ramapati’s. Suresh consumes the sweets, thining it a gift from someone. Even though there is no contract between Mohan Lal and Suresh, the court would treat it a quasi-contract and orders Suresh to either return the sweets or pay Mohan Lal.

Quasi Contract types

Supply of necessities to incapable persons
Payment by way of a fascinated character
Obligation to pay gratuitous non-acts
Responsibility of finder of goods
Payment of delivery via mistake or coercion

Quasi-contract elements

The essential elements of a quasi-contract are a benefit conferred upon defendant by plaintiff, appreciation by defendant of such benefit, and acceptance and retention by defendant of such benefit under such circumstances that it would be inequitable to retain the benefit without payment of the value thereof.

Quasi-contract importance

A quasi contract is a vital agreement developed between two parties who weren’t involved in any sort of a contractual commitment beforehand. A quasi-contract is usually developed under law, to maintain fairness between two parties or to remedy a situation where one party acquires something in a manner that is detrimental to the other. This contract is essential to prevent the possibility of any financial gains for any party at the cost of the other.

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What is the need for quasi contract?

A quasi contract defines the responsibilities of one party towards the other, in which the latter has the rights over the assets of the former. This form of agreement arises legally and is enforced through a judge, in a situation where, say, A owes something to B because they came into possession of something owned by A, unintentionally or due to some error. The law then comes into force if B decides to forcefully take up A’s property without any payment.

As this contract is enforced legally, neither of the parties is required to give consent. The sole objective of this agreement is to eliminate any chances of giving undue advantage to one party over the other. In the example, given above, B (which came into possession of the property), needs to pay compensation to A for the value of the property.

The term implies contract also refers to the quasi-contract. The agreement requires the defendant to pay for the damage to the claimant.

See also: Tips to deal with illegal possession of property

Features of quasi contract

Quasi contracts provide the right to money.
It is imposed by law in the absence of a contract or mutual consent between the concerned parties.
Quasi contracts, at their core, are based on the principles of equity and justice.

Prerequisites for quasi contract

A judge would consider certain things, while issuing a quasi-contract:

The claimant side would have provided the defendant party with the hope of paying them in the form of indirect goods or services.
The defendant needs to acknowledge the net value of the asset but did not make any efforts to pay for it.
The claimant side would justify their stand as to why providing goods and services, as well as not getting any compensation is unfair with respect to the defendant’s side. Hence, the judgement would prove the defendant earned using unlawful measures.

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Quasi contract: Advantages

Prevents one party from taking undue advantage of the other party.
Since it is imposed by law, all the parties must follow it.

Quasi contract: Disadvantages

This contract is not useful if one of the parties was expecting a profit on a deal.

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