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Quasi Contract


A quasi contract is a legal agreement created by the courts between two parties who did not have a previous obligation or agreement between them. It is established when one party unfairly receives a benefit and the other seeks to recover this. The aim of a quasi contract is to prevent unjust enrichment when a formal contract does not exist.


The phonetics of the keyword “Quasi Contract” is: kwo-zai kon-trakt

Key Takeaways

  1. Not a real contract: A Quasi Contract is not a real contract. It is a legal obligation imposed by the court to prevent unjust enrichment or unfairness. This means it doesn’t require any specific terms, conditions, or even mutual consent, unlike real contracts.
  2. Compensation for benefits received: Quasi Contracts are created by the court to ensure that one party doesn’t benefit at the expense of another party. It obligates the party that received the benefit or enrichment to compensate the other party, even if the benefit was unintended or unwanted.
  3. Imposed by law: Quasi Contracts are imposed by law and are not based on the intentions, agreement or consent of the parties involved. Rather they are imposed by the court due to specific circumstances where equity and fairness require some sort of compensation to the disadvantaged party.


A quasi contract is a significant concept in business and finance as it’s a legally-binding agreement created by the courts between two parties who lack a legitimate contract. Quasi contracts are particularly important in situations where one party would receive an unfair advantage due to goods or services being provided under the assumption of payment. By legally enforcing the quasi contract, the courts aim to prevent unjust enrichment or one party unfairly benefiting at the expense of another. This is vital in the business world as it ensures each party involved in a deal is protected and it helps maintain trust and credibility in business transactions, thus ensuring fairness and equity.


The purpose of a quasi contract is to prevent unjust enrichment of a party in a situation where an explicit contract has not been written or executed. It is a legal agreement created by the courts and is applied under circumstances wherein any sort of unjust enrichment has occurred to a party, and it needs to be compensated. This type of contract is used to ensure fair dealing and to prevent one party from gaining at the expense of another party, due to the absence of a proper, legal contract.

Specifically, quasi contracts are designed and often used in scenarios where there would not naturally be a contractual relationship. For instance, if an individual receives a benefit to which they’re not entitled, and they have not paid or provided any exchange for this benefit, the principle of quasi contract would be invoked to ensure they don’t retain this enrichment unjustly. Through a quasi contract, the court can mandate the party who unfairly benefited to compensate the other party to avoid unfair enrichment or undue loss, even though there isn’t a formal contract between them.


1. Unrequested Services: Suppose a landscaper mistakenly mows your lawn thinking it was actually part of the property of your neighbor who is their actual client. Even if you did not request for this service, you may still be required to pay under a quasi-contract, because you benefited from the service.

2. Unjust Enrichment: A person finds a valuable lost item, like an expensive watch, and returns it to the owner. The owner, knowing that the item has been found and returned, cannot unjustly enrich himself by not compensating the finder. The law may impose a quasi-contract in this situation, requiring the owner of the watch to pay a reasonable sum for the honest act of the finder.

3. Overpayment: If an employer overpays an employee due to an accounting error, a quasi-contract could be created. The rationale is that the employee should not be unjustly enriched by the overpayment and should return the excess amount. Here, a quasi-contract would effectively be forcing the employee to repay the overpaid amount.

Frequently Asked Questions(FAQ)

What is a quasi contract?

A quasi contract is a binding agreement between two parties that’s established by a court of law in order to prevent unjust enrichment when no contract exists.

When does a quasi contract come into play?

A quasi contract come into play when one party provides goods or services under circumstances where receiving payment is reasonably expected, but there’s no formal contract in place and the receiver fails to pay.

Can both parties willingly agree to a quasi contract?

No, a quasi contract is not based on the intent or agreement of the involved parties. It’s a legal construction imposed by the court to ensure fair dealings.

What are the elements of a quasi contract?

The elements of a quasi contract include: a benefit delivered by one party to another, an appreciation or knowledge by the benefiting party about the benefit, and acceptance or retention of the benefit under inequitable circumstances.

Can a quasi contract be enforceable?

Yes, a quasi contract is enforceable law, however, it depends on the individual case and if it meets the necessary elements of a quasi contract recognized by the court.

Is a quasi contract the same as a real contract?

No, a quasi contract differs from a real contract. A real contract is a voluntary agreement between two or more parties, while a quasi contract is imposed by the court regardless of the parties’ agreement.

Are quasi contracts applicable only in business law?

No, quasi contracts can be applied in any situation where one party benefits at the expense of another without a pre-agreed compensation plan.

Related Finance Terms

  • Unjust Enrichment
  • Implied-in-law Contract
  • Contractual Obligation
  • Quantum Meruit
  • Restitution

Sources for More Information

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