Quasi-contract
Encyclopedia
A quasi-contract is a fictional
contract created by courts for equitable, not contract
ual purposes. A quasi-contract is not an actual contract, but is a legal substitute for a contract formed to impose equity between two parties. The concept of a quasi-contract is that of a contract that should have been formed, even though in actuality it was not. It is used when a court finds it appropriate to create an obligation upon a non-contracting party to avoid injustice and to ensure fairness. It is invoked in circumstances of unjust enrichment
, and is connected with the concept of restitution
.
Generally the existence of an actual or implied-in-fact contract is required for the defendant to be liable for services rendered, and a person who provides a service uninvited is an officious intermeddler
who is not entitled to compensation. "Would-be plaintiffs cannot deliver unordered goods or services and demand payment for the benefit....A corollary is that one who does have an enforceable contract is bound by the contract's terms: subject to a few controversial exceptions, she cannot sue for restitution of the value of benefits conferred..." However, in many jurisdictions under certain circumstances plaintiffs may be entitled to restitution under quasi-contract (as in the example of Oklahoma below).
Quasi-contracts are defined to be "the lawful and purely voluntary acts of a man, from which there results any obligation whatever to a third person, and sometime a reciprocal obligation between the parties."
pattern jury instructions, the elements of quasi-contract are:
Knowledge, the second element, is required, and if the defendant had no knowledge of the benefits, there would be no contract of any kind, even a quasi-contract.
"A quasi-contract is not really a contract at all in the normal meaning of a contract," according to one scholar, but rather is "an obligation imposed on a party to make things fair."
The Oklahoma Supreme Court
has:
of the benefit and not necessarily the subjective value that the defendant enjoys. A traditional measure of the fair market value is called quantum meruit
, for "as much as is deserved." For example, accountant prepares tax-payer's taxes, finding a way to get him an unusually large refund. Tax-payer doesn't pay accountant. Assuming a court finds no contract, tax-payer is only liable for the fair market value of tax preparation services, which is not inflated up to account for the unusually large refund he enjoyed.
Under Oklahoma
law:
The party to be charged is any defendant
, or in the case of a guarantee or surety
, a co-defendant, in a breach of contract
lawsuit
.
Compare this example with the three elements from above:
Because the owner failed to stop the plumber from installing the sprinkler system, with the intention of benefiting from the mistake, the court will create a quasi-contract. The owner's failure to refuse the plumber's service will be interpreted as an implicit agreement to pay for it and the court will treat it as if there was an actual contract. However, if the owner were away from home at the time of the installation and had no chance to stop it, he could not be held liable and the plumber will be forced to bear the costs of his mistake.
Examples of quasi-contracts vary by jurisdiction. A painter, who mistakenly paints a house with the owner's knowledge, can sue in court to get paid. A mechanic who fixes the brakes to a car as requested, but who also makes repairs to the axle (without which the brakes would not function properly), has an implied quasi-contract. A homebuilder who signs a contract with a purported agent, who actually has no authority, can recover the cost of the services and materials from the homeowner.
Legal fiction
A legal fiction is a fact assumed or created by courts which is then used in order to apply a legal rule which was not necessarily designed to be used in that way...
contract created by courts for equitable, not contract
Contract
A contract is an agreement entered into by two parties or more with the intention of creating a legal obligation, which may have elements in writing. Contracts can be made orally. The remedy for breach of contract can be "damages" or compensation of money. In equity, the remedy can be specific...
ual purposes. A quasi-contract is not an actual contract, but is a legal substitute for a contract formed to impose equity between two parties. The concept of a quasi-contract is that of a contract that should have been formed, even though in actuality it was not. It is used when a court finds it appropriate to create an obligation upon a non-contracting party to avoid injustice and to ensure fairness. It is invoked in circumstances of unjust enrichment
Unjust enrichment
Unjust enrichment is a legal term denoting a particular type of causative event in which one party is unjustly enriched at the expense of another, and an obligation to make restitution arises, regardless of liability for wrongdoing.Definition:...
, and is connected with the concept of restitution
Restitution
The law of restitution is the law of gains-based recovery. It is to be contrasted with the law of compensation, which is the law of loss-based recovery. Obligations to make restitution and obligations to pay compensation are each a type of legal response to events in the real world. When a court...
.
Generally the existence of an actual or implied-in-fact contract is required for the defendant to be liable for services rendered, and a person who provides a service uninvited is an officious intermeddler
Officious intermeddler
An officious intermeddler is a person who voluntarily, and without request or pre-existing legal duty, interjects themselves into the affairs of another, and then seeks remuneration for services or reimbursement. Example: Person "A" leaves for vacation for two weeks during the summer. Person "B"...
who is not entitled to compensation. "Would-be plaintiffs cannot deliver unordered goods or services and demand payment for the benefit....A corollary is that one who does have an enforceable contract is bound by the contract's terms: subject to a few controversial exceptions, she cannot sue for restitution of the value of benefits conferred..." However, in many jurisdictions under certain circumstances plaintiffs may be entitled to restitution under quasi-contract (as in the example of Oklahoma below).
Quasi-contracts are defined to be "the lawful and purely voluntary acts of a man, from which there results any obligation whatever to a third person, and sometime a reciprocal obligation between the parties."
Elements
According to the OklahomaOklahoma
Oklahoma is a state located in the South Central region of the United States of America. With an estimated 3,751,351 residents as of the 2010 census and a land area of 68,667 square miles , Oklahoma is the 28th most populous and 20th-largest state...
pattern jury instructions, the elements of quasi-contract are:
Knowledge, the second element, is required, and if the defendant had no knowledge of the benefits, there would be no contract of any kind, even a quasi-contract.
Contract compared
In contracts, it is the consent of the contracting parties which produces the obligation; in quasi-contracts no consent is required, and the obligation arises from the law or natural equity, on the facts of the case. These acts are called quasi-contracts, because, without being contracts, they bind the parties as contracts do."A quasi-contract is not really a contract at all in the normal meaning of a contract," according to one scholar, but rather is "an obligation imposed on a party to make things fair."
The Oklahoma Supreme Court
Oklahoma Supreme Court
The Supreme Court of Oklahoma is one of the two highest judicial bodies in the U.S. state of Oklahoma and leads the Oklahoma Court System, the judicial branch of the government of Oklahoma....
has:
Liability
The defendant's liability under quasi-contract is equal to the value of the benefit conferred by the plaintiff. The value is the fair market valueFair market value
Fair market value is an estimate of the market value of a property, based on what a knowledgeable, willing, and unpressured buyer would probably pay to a knowledgeable, willing, and unpressured seller in the market. An estimate of fair market value may be founded either on precedent or...
of the benefit and not necessarily the subjective value that the defendant enjoys. A traditional measure of the fair market value is called quantum meruit
Quantum meruit
Quantum meruit is a Latin phrase meaning "what one has earned". In the context of contract law, it means something along the lines of "reasonable value of services".In the United States, the elements of quantum meruit are determined by state common law...
, for "as much as is deserved." For example, accountant prepares tax-payer's taxes, finding a way to get him an unusually large refund. Tax-payer doesn't pay accountant. Assuming a court finds no contract, tax-payer is only liable for the fair market value of tax preparation services, which is not inflated up to account for the unusually large refund he enjoyed.
Under Oklahoma
Oklahoma
Oklahoma is a state located in the South Central region of the United States of America. With an estimated 3,751,351 residents as of the 2010 census and a land area of 68,667 square miles , Oklahoma is the 28th most populous and 20th-largest state...
law:
The party to be charged is any defendant
Defendant
A defendant or defender is any party who is required to answer the complaint of a plaintiff or pursuer in a civil lawsuit before a court, or any party who has been formally charged or accused of violating a criminal statute...
, or in the case of a guarantee or surety
Surety
A surety or guarantee, in finance, is a promise by one party to assume responsibility for the debt obligation of a borrower if that borrower defaults...
, a co-defendant, in a breach of contract
Breach of contract
Breach of contract is a legal cause of action in which a binding agreement or bargained-for exchange is not honored by one or more of the parties to the contract by non-performance or interference with the other party's performance....
lawsuit
Lawsuit
A lawsuit or "suit in law" is a civil action brought in a court of law in which a plaintiff, a party who claims to have incurred loss as a result of a defendant's actions, demands a legal or equitable remedy. The defendant is required to respond to the plaintiff's complaint...
.
Examples
An example of a quasi-contract is the case of a plumber who accidentally installs a sprinkler system in the lawn of the wrong house. The owner of the house had learned the previous day that his neighbor was getting new sprinklers. That morning, he sees the plumber begin installing them in his own lawn. Pleased at the mistake, he says nothing, and then refuses to pay when the plumber hands him the bill, claiming that he never agreed to pay for the sprinklers. If the plumber can prove that the man knew that the sprinklers were being installed mistakenly on his property and failed to prevent the installation, the court would make him pay under a quasi-contract theory. If that knowledge could not be proven, he would not be liable.Compare this example with the three elements from above:
- The plumber conferred a benefit on the owner by installing the sprinkler system.
- The owner accepted the installation of the sprinkler system by not stopping the plumber when he first noticed the mistake.
- Without payment, the owner will unfairly benefit at the expense of the mistaken plumber.
Because the owner failed to stop the plumber from installing the sprinkler system, with the intention of benefiting from the mistake, the court will create a quasi-contract. The owner's failure to refuse the plumber's service will be interpreted as an implicit agreement to pay for it and the court will treat it as if there was an actual contract. However, if the owner were away from home at the time of the installation and had no chance to stop it, he could not be held liable and the plumber will be forced to bear the costs of his mistake.
Examples of quasi-contracts vary by jurisdiction. A painter, who mistakenly paints a house with the owner's knowledge, can sue in court to get paid. A mechanic who fixes the brakes to a car as requested, but who also makes repairs to the axle (without which the brakes would not function properly), has an implied quasi-contract. A homebuilder who signs a contract with a purported agent, who actually has no authority, can recover the cost of the services and materials from the homeowner.
See also
- ContractContractA contract is an agreement entered into by two parties or more with the intention of creating a legal obligation, which may have elements in writing. Contracts can be made orally. The remedy for breach of contract can be "damages" or compensation of money. In equity, the remedy can be specific...
- Officious intermeddlerOfficious intermeddlerAn officious intermeddler is a person who voluntarily, and without request or pre-existing legal duty, interjects themselves into the affairs of another, and then seeks remuneration for services or reimbursement. Example: Person "A" leaves for vacation for two weeks during the summer. Person "B"...
- Promissory estoppel
- Unjust enrichmentUnjust enrichmentUnjust enrichment is a legal term denoting a particular type of causative event in which one party is unjustly enriched at the expense of another, and an obligation to make restitution arises, regardless of liability for wrongdoing.Definition:...
- Implied in fact contractImplied in fact contractAn implied-in-fact contract is a contract agreed by non-verbal conduct, rather than by explicit words. As defined by the United States Supreme Court, it is "an agreement 'implied in fact'" as "founded upon a meeting of minds, which, although not embodied in an express contract, is inferred, as a...