Quasi-contract

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A quasi-contract (or implied-in-law contract or constructive contract) is a fictional contract recognised by a court. The notion of a quasi-contract can be traced to Roman law and is still a concept used in some modern legal systems. Quasi contract laws have been deduced from the Latin statement "Nemo debet locupletari ex aliena iactura", which proclaims that no one should grow rich out of another person's loss. It was one of the central doctrines of Roman law.

Contents

History

In common law jurisdictions, the law of quasi-contract can be traced to the medieval form of action known as indebitatus assumpsit . In essence, the plaintiff would recover a money sum from the defendant as if the defendant had promised to pay it: that is, as if there were a contract subsisting between the parties. The defendant's promise—their agreement to be bound by the "contract"—was implied by law. The law of quasi-contract was generally used to enforce restitutionary obligations. [1]

The form of action known as indebitatus assumpsit came to include various sub-forms known as the common money counts. The most important of these for the later development of the law of quasi-contract included: (i) actions for money had and received to the plaintiff's use; (ii) actions for money paid to the defendant's use; (iii) quantum meruit ; and (iv) quantum valebant . [2]

Quasi-contractual actions were generally (but not exclusively) used to remedy what would now be called unjust enrichment. In most common law jurisdictions the law of quasi-contract has been superseded by the law of unjust enrichment. [3]

Quasi-contract and contract

A quasi-contract is distinct from a contract implied in fact and may be distinguished from an explicitly agreed contract. [lower-alpha 1]

See also

Notes

  1. See for example Eighth Circuit Court of Appeals, Rambo v. South Tama County, 11 January 2008: "This is an action in contract and quasi-contract for services ... After a bench trial, the district court entered judgment for Rambo on its contract claim and denied recovery on the quasi-contract claim."

Related Research Articles

<i>Quantum meruit</i> Latin Phrase

Quantum meruit is a Latin phrase meaning "what one has earned". In the context of contract law, it means something along the lines of "reasonable value of services".

The forms of action were the different procedures by which a legal claim could be made during much of the history of the English common law. Depending on the court, a plaintiff would purchase a writ in Chancery which would set in motion a series of events eventually leading to a trial in one of the medieval common law courts. Each writ entailed a different set of procedures and remedies which together amounted to the "form of action".

Restitution and unjust enrichment is the field of law relating to gains-based recovery. In contrast with damages, restitution is a claim or remedy requiring a defendant to give up benefits wrongfully obtained. Liability for restitution is primarily governed by the "principle of unjust enrichment": A person who has been unjustly enriched at the expense of another is required to make restitution.

Assumpsit, or more fully, action in assumpsit, was a form of action at common law used to enforce what are now called obligations arising in tort and contract; and in some common law jurisdictions, unjust enrichment. The origins of the action can be traced to the 14th century, when litigants seeking justice in the royal courts turned from the writs of covenant and debt to the trespass on the case.

<span class="mw-page-title-main">Constructive trust</span> Type of legal remedy

In trust law, a constructive trust is an equitable remedy imposed by a court to benefit a party that has been wrongfully deprived of its rights due to either a person obtaining or holding a legal property right which they should not possess due to unjust enrichment or interference, or due to a breach of fiduciary duty, which is intercausative with unjust enrichment and/or property interference. It is a type of implied trust.

Failure of consideration is a technical legal term referring to situations in which one person confers a benefit upon another upon some condition or basis ("consideration") which fails to materialise or subsist. It is also referred to as "failure of basis". It is an 'unjust factor' for the purposes of the law of unjust enrichment. Where there is a "total failure of consideration" the claimant can seek restitution of the benefit by bringing an action in unjust enrichment against the defendant. Historically speaking, this was as a quasi-contractual claim known as an action for money had and received to the plaintiff's use for a consideration that wholly failed. The orthodox view is that it is necessary for any relevant contract to be ineffective, for example because it is discharged for breach, void ab initio or frustrated. However, it will be available on a subsisting contract where it does not undermine the contractual allocation of risk.

<i>Fibrosa Spolka Akcyjna v Fairbairn Lawson Combe Barbour Ltd</i>

Fibrosa Spolka Akcyjna v Fairbairn Lawson Combe Barbour Ltd[1942] UKHL 4 is a leading House of Lords decision on the doctrine of frustration in English contract law.

<span class="mw-page-title-main">English contract law</span> Law of contracts in England and Wales

English contract law is the body of law that regulates legally binding agreements in England and Wales. With its roots in the lex mercatoria and the activism of the judiciary during the industrial revolution, it shares a heritage with countries across the Commonwealth, from membership in the European Union, continuing membership in Unidroit, and to a lesser extent the United States. Any agreement that is enforceable in court is a contract. A contract is a voluntary obligation, contrasting to the duty to not violate others rights in tort or unjust enrichment. English law places a high value on ensuring people have truly consented to the deals that bind them in court, so long as they comply with statutory and human rights.

The English law of unjust enrichment is part of the English law of obligations, along with the law of contract, tort, and trusts. The law of unjust enrichment deals with circumstances in which one person is required to make restitution of a benefit acquired at the expense of another in circumstances which are unjust.

Change of position is a defence to a claim in unjust enrichment which operates to reduce a defendant's liability to the extent to which his or her circumstances have changed as a consequence of an enrichment.

<span class="mw-page-title-main">United States contract law</span>

Contract law regulates the obligations established by agreement, whether express or implied, between private parties in the United States. The law of contracts varies from state to state; there is nationwide federal contract law in certain areas, such as contracts entered into pursuant to Federal Reclamation Law.

<i>Attorney General v Blake</i> English contract law case on damages for breach of contract

Attorney General v Blake[2000] UKHL 45, [2001] 1 AC 268 is a leading English contract law case on damages for breach of contract. It established that in some circumstances, where ordinary remedies are inadequate, restitutionary damages may be awarded.

<span class="mw-page-title-main">Baltic Shipping Company v Dillon</span> Judgement of the High Court of Australia

Baltic Shipping Company v Dillon, the Mikhail Lermontov case, is a leading Australian contract law case, on the incorporation of exclusion clauses and damages for breach of contract or restitution for unjust enrichment.

The English law of Restitution is the law of gain-based recovery. Its precise scope and underlying principles remain a matter of significant academic and judicial controversy. Broadly speaking, the law of restitution concerns actions in which one person claims an entitlement in respect of a gain acquired by another, rather than compensation for a loss.

<i>Slades Case</i> Case in English contract law that ran from 1596 to 1602.

Slade's Case was a case in English contract law that ran from 1596 to 1602. Under the medieval common law, claims seeking the repayment of a debt or other matters could only be pursued through a writ of debt in the Court of Common Pleas, a problematic and archaic process. By 1558 the lawyers had succeeded in creating another method, enforced by the Court of King's Bench, through the action of assumpsit, which was technically for deceit. The legal fiction used was that by failing to pay after promising to do so, a defendant had committed deceit, and was liable to the plaintiff. The conservative Common Pleas, through the appellate court the Court of Exchequer Chamber, began to overrule decisions made by the King's Bench on assumpsit, causing friction between the courts.

<i>Westdeutsche Landesbank Girozentrale v Islington LBC</i> English legal case

Westdeutsche Landesbank Girozentrale v Islington LBC[1996] UKHL 12, [1996] AC 669 is a leading English trusts law case concerning the circumstances under which a resulting trust arises. It held that such a trust must be intended, or must be able to be presumed to have been intended. In the view of the majority of the House of Lords, presumed intention to reflect what is conscionable underlies all resulting and constructive trusts.

An action for money had and received to the plaintiff's use is the name for a common law claim derived from the form of action known as indebitatus assumpsit. The action enabled one person to recover money which has been received by another: for example, where a plaintiff paid money to the defendant while labouring under a mistake of fact or where there was a total failure of consideration. The action was a personal action only available in respect of money, rather than other benefits. Where the benefit received by the defendant was services or goods, the appropriate action was a quantum meruit or a quantum valebant, respectively.

<i>Exall v Partridge</i>

Exall v Partridge (1799) 101 ER 1405 is an English unjust enrichment law case, concerning enrichment through discharge of a debt, and the unjust factor of legal compulsion to give another a benefit.

Relfo Ltd v Varsani [2014] EWCA Civ 360 is an English unjust enrichment law case, concerning to what extent enrichment of the defendant must be at the expense of the claimant.

<i>Moses v Macferlan</i>

Moses v Macferlan (1760) 2 Bur 1005 is a foundational case in the law of restitution holding that in certain circumstances such as when money is paid by mistake, for failed consideration or under oppression; the law will allow the money to be recovered.

References

  1. See generally, Sir John Baker, An Introduction to English Law History (4th ed)
  2. See generally, Sir John Baker, An Introduction to English Legal History (4th ed)
  3. See generally, Mitchell et al, Goff & Jones Law of Unjust Enrichment (8th ed, 2011); Carter et al, Mason & Carter's Restitution Law in Australia (2nd ed, 2008); Graham Virgo, The Principles of the Law of Restitution (3rd ed, 2015)

Further reading