Quasi Contract: Definition, Example and Related Terms

A quasi contract is a legal agreement that the courts create between two parties who never had a real contract. This is done to prevent one party from being unjustly enriched, or unfairly benefiting, at the expense of another. The idea behind a quasi contract is to create fairness and justice when the actual contract does not exist or is not legally valid. It's like a safety net to make sure someone doesn't get to keep something they didn't rightfully earn.

Quasi contracts are often used in business situations. For example, if a company mistakenly delivers goods to the wrong address, the person who received the goods may be required to return them or pay for them under a quasi contract. The courts create this quasi contract to prevent the person from being unjustly enriched by the goods they did not order or pay for.

In commercial contracts, a quasi contract can also be used if a service was provided but not paid for. For instance, if a consultant provides advice to a company but the company refuses to pay, a court may create a quasi contract requiring the company to pay for the services received. This prevents the company from benefiting from the consultant's advice without paying for it.

The important thing to note is that a quasi contract is not a real contract. It does not require the agreement of both parties. Instead, it is created by the court to ensure fairness and prevent unjust enrichment. As a commercial contracts manager, it's important to understand the concept of quasi contracts to know how to handle situations where a real contract does not exist or is not legally valid.