What is a Quasi Contract?

Quasi Contract acts as a remedy for a dispute between two parties that don’t have a contract. A quasi contract is not a traditional contract and it has a legal obligation which is decided by a judge for one party to compensate the other. The legal principle is to make one party pay the other as if a contract or an agreement already exists between them. So, the obligation of the defendant to be bound by an exchange is viewed to be implied by law.

There are certain cases where the law implies a promise and imposes obligations on one party while conferring rights to the other, even when there is no presence of essential elements of a contract. Though these promises are not legal contracts, the court recognizes them as relations resembling a contract and enforces them like a contract.

For example, X and Y enter a contract under which X agrees to deliver a basket of fruits at Y’s residence and Y promises to pay ₹ 1,500 after consuming all the fruits. However, X erroneously delivers a basket of fruits to Z’s house instead of Y’s. When Z gets home he assumes that the fruit basket is a birthday gift and consumes them. Although there is no contract between X and Z, the court treats this as a Quasi Contract and orders Z to either return the basket of fruits or pay Y.

A Quasi Contract is a term for a contract implied in law, which acts as a remedy for a dispute between two parties that don’t have a contract. Quasi Contract is a legal obligation that is decided by a judge for one party to compensate the other. Hence, it corrects a circumstance in which one party acquires something at the expense of the other. The core principles behind a Quasi Contract are justice, equity, and a good conscience which is based on the maxim “No man must grow rich out of another person’s loss”.

Geeky Takeaways:

• A quasi-contract is a remedy between two parties who have no contract with one another.
• A quasi-contract is created by a judge to correct a circumstance in which one party acquires something at the expense of the other.
• A plaintiff must have furnished an asset or service to another party such that the defendant should have known to pay for it.
• A defendant must have accepted the item but made no effort or offer to pay for it even when they knew they should.