A quasi-contract (or implied-in-law contract) is a fictional contract created by courts for equitable, not contractual purposes.[1] 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.[2][3][4] It is invoked in circumstances of unjust enrichment,[4] 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..." [5] 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."[6]
Contents |
According to the Oklahoma pattern jury instructions, the elements of quasi-contract are:
- Plaintiff furnished / rendered valuable goods / services to Defendant with a reasonable expectation of being compensated;
- Defendant knowingly accepted the benefits of the goods / services; and
- Defendant would be unfairly benefited by the services / receiving the goods if no compensation were paid to the Plaintiff.[7]
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.[3]
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."[3]
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.[7]
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. 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 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.[7]
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.
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:
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.[3] 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.[2] 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.[4]