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Quasi-contract law 

A quasi-contract, also called an implied-in-law contract,[1] is a legal substitute for a contract. A quasi-contract is a contract that should have been formed, even though in actuality it was not. It is used when a court wishes to create an obligation upon a non-contracting party to avoid injustice and to ensure fairness.[2] [1] [3] It is invoked in circumstances of unjust enrichment.[3]

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."[4] It "is not legitimately done, but the terms are accepted and followed as if there is a legitimate contract."[5]

Contents

Elements

According to the Oklahoma pattern jury instructions, the elements of quasi-contract are:

  1. Plaintiff furnished / rendered valuable goods / services to Defendant with a reasonable expectation of being compensated;
  2. Defendant knowingly accepted the benefits of the goods / services; and
  3. Defendant would be unfairly benefited by the services / receiving the goods if no compensation were paid to the Plaintiff.
—[6]

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.[1]

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.citation needed

"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."[1]

The Oklahoma Supreme Court has:

described the distinction between a contract and a quasi-contract in T & S Inv. Co. v. Coury, 593 P.2d 503 (Okla. 1979), as follows: A "quasi" or constructive contract is an implication of law. An "implied" contract is an implication of fact. In the former the contract is a mere fiction, imposed in order to adapt the case to a given remedy. In the latter, the contract is a fact legitimately inferred. In one the intention is disregarded; in the other, it is ascertained and enforced. In one, the duty defines the contract; in the other, the contract defines the duty. (quoting from Berry v. Barbour, 279 P.2d 335, 338 (Okla. 1954)).

—Oklahoma Uniform Jury Instructions, § 23.10 citing cases therein at [6].

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 value of the benefit and not necessarily the subjective value that the defendant enjoys.citation needed A traditional measure of the fair market value is called quantum meruit, for "as much as is deserved."citation needed 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.citation needed

Under Oklahoma law:

The measure of damages in a quasi-contract action is the amount which will compensate the party aggrieved for the detriment proximately caused thereby, and, if the obligation is to pay money, the detriment caused by the breach in the amount due by the terms of the obligation.

—Welling v. American Roofing & Sheet Metal Co., Inc., 617 P.2d 206, 209-210 (Okla. 1980), cited at [6].

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.

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 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. Will the man be held liable for payment? Yes, if it could be proven that the man knew that the sprinklers were being installed mistakenly, the court would make him pay because of a quasi-contract. If that knowledge could not be proven, he would not be liable.citation needed

There are many more examples of quasi-contracts. A painter, who mistakenly paints a house with the owner's knowledge, can sue in court to get paid.[1] A mechanic who fixes the brakes to a car as requested, but who also fixes the axle, has an implied quasi-contract.[2] For a casual job, there is almost never a written contract, but often a quasi-contract.[5] 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.[3]

See also

Notes

  1. ^ a b c d e E. Marshall Wick, Notes for BUS 447, Gallaudet University, found at Gallaudet University Website. Accessed June 30, 2008.
  2. ^ a b Answers.com Website. Accessed Juen 30, 2008.
  3. ^ a b c American Law Encyclopedia Website. Accessed June 30, 2008.
  4. ^ The Lectric Law Library's Lexicon.
  5. ^ a b Legal Explanations Website. Accessed June 30, 2008.
  6. ^ a b c Oklahoma Uniform Jury Instructions, Civil, Chapter 23, Article PART ONE, Section Instruction 23.10 - QUASI-CONTRACT (QUANTUM MERUIT OR QUANTUM VALEBANT), found at Oklahoma Uniform Jury Instructions Website. Accessed June 30, 2008.
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