quasi contract

DEFINITION: The phrase “quasi contract,” also known as a “contract implied in law,” refers to judicial ruling that serves as a resolution for disagreements between two parties who have no formal contract.

Unlike an ordinary legal contract, a quasi contract does not derive from mutual agreement. Rather, it is established by a court’s decision to settle a dispute in favor of one party rather than another.

ETYMOLOGY: The concept of a “quasi contract,” if not the phrase, is already attested in Roman law, where it has been inferred from the well-known Roman legal principle which states: “nēmo dēbet locuplētari ex aliēnā iacturā [no one ought to be enriched by another’s loss].”

During the Middle Ages, the idea of quasi contract emerged as an explicit legal concept. Known by the Latin phrase “indebitatus assumpsit [being indebted made the promise],” this principle is essentially identical to that of a quasi contract.

 The principle of a quasi contract is also firmly established in the English common law tradition.

The English adverb “quasi”meaning “in some sense” or “to some degree”—is attested from the seventeenth century. It derives from the Latin adverb quasi, meaning “as if,” “as it were,” or ”approximately.”

The English noun “contract” is attested from the fourteenth century. It derives—via Middle English contracten and Middle French contracter, meaning “to agree upon”—from the Latin past participle contractus, of the verb contraho, contrahere, meaning “to draw together,” “to collect,” or “to unite.”

USAGE: In essence, a quasi contract is an ex post facto judicial ruling aimed at rectifying a situation in which one party to a dispute is judged to have taken unfair advantage of the other. It is meant to serve the function of a contract drawn up before the fact, when such a contract is missing.

For example, a quasi contract might be enforced in a situation in which one party receives goods or services it did not explicitly solicit or contract for in writing.

Nevertheless, upon accepting the goods or services, the buyer creates a legal obligation, or implied contract, to pay the seller that provided the goods or services.

A quasi contract may be said to enforce such an implied contract.

This legal doctrine serves as a method of compelling one party to a dispute to compensate the other as though a regular written contract or agreement between the parties existed.

In other words, the defendant’s responsibility to adhere to his obligations created by a transaction is interpreted as implicitly mandated by law. Historically, quasi contracts have been primarily used to enforce restitution for damages incurred by the plaintiff.

Once a quasi contract has been established by a court of law, the latter issues a directive which compels the defendant to provide restitution to the plaintiff.

This restitution, called “quantum meruit” in Latin (meaning “the amount deserved”) is computed based on the extent to which the defendant was unfairly benefited.

This type of legal contrivance is also sometimes referred to as a “constructive contract.” The reason is that it is “constructed” by a judge in cases where no pre-existing contract exists between the parties involved.