Key Difference Between Contract and Quasi-Contract

Let us first study about contracts and quasi-contracts before delving into the differences between them.

Contract is a collaboration involving more than one parties. Contracts are formed between parties with legal concerns and goals in mind. A quasi-contract is imposed legally to prevent undue enrichment. As a result, we refer to it as a contract implied by law.

Contracts are frequently entered into on a daily basis. Consider the following situation: When you go to a restaurant and order hot coffee, you enter into a contract. Similarly, when you order something online, you enter into a contract.

This post will explain the difference between a contract and a quasi-contract.

Contract and Quasi Contract

What is a Contract?

A contract is a written or oral agreement between two or more parties that generates a legal obligation.

Contract terms are legally enforceable, with clearly specified penalties and remedies if the contract is broken. A breach of contract is a failure to perform any element of the contract without a valid reason.

When two or more parties make an offer, examine it, and accept it, a contract is formed.

Required Elements for a Contract

To be enforceable, a contract must contain six basic elements:

  • Offer . A promise made by one party to another that they will or will not do something in the future. For example, I will pay you $3,500 to purchase your vehicle.
  • Acceptance . Usually matches the terms of the offer—an indication, whether in words or deeds, that both parties agree to the contract’s conditions.
  • Awareness . Evidence that both parties understand and agree on “the core essence of the contract.”
  • Consideration . A contract differs from a gift since it removes the voluntary aspect of the act/non-act by requiring something of value in exchange for the promise.
  • Capacity . Each contract signatory has proved “legal ability” to understand what they are signing.
  • Legality . All contracts are governed by the laws of the jurisdiction in which they are made.

Discharge of Contract

The termination of the contract-related responsibilities of the contract’s parties is referred to as discharge of contract. The parties are released from the contract at the time of its discharge. The various methods of contract discharge are as follows:

  • Performance: It can be actual performance or attempted performance.
  • Mutual Agreement: It may include novation, recission, alteration and remission.
  • Impossibility of performance: The impossibility can be existing at the time of contract or it can be a supervening impossibility.
  • Lapse of time
  • Operation of law
  • Breach: It can be an actual breach or anticipatory breach.

Also ReadDifference Between Contract and Agreement

What is Quasi Contract?

A quasi-contract is a legal arrangement that describes one party’s commitment to another party if the former has the latter party’s property, i.e., something is acquired by one party at the expense of another. These are created by the court to avoid unfair enrichment of any party’s overpayment for a good or service. Because the court makes these decisions, no party can dispute with them and is obligated to follow them.

Principles

It is founded on the ideas of equity and justice. This means that no one will be able to gain an unfair advantage at the expense of another.

Features of Quasi Contract

The following are the features:

  • Typically, quasi-contracts grant the right to money.
  • Because there is no contract or mutual consent among the parties, it is imposed by law and is not the result of any agreement.
  • They are founded on equity, a good conscience, fairness, and natural justice principles.

Kinds of Quasi-Contract

In terms of rights, the following types of quasi-contracts exist:

Recover the cost of the supplies provided.

A person who supplied necessary services to an incompetent party or a person dependent on that incompetent party has the right to recover those services from the incompetent party’s property. In this context, the term ‘necessaries’ refers to objects that are required to sustain a specific person’s state, degree, or status.

Recover money paid for someone else

A person who makes a payment on behalf of another person who is legally obligated to pay it. The person who makes the payment then has the right to reclaim it from the party on whose behalf he made the payment.

Make amends for the gratuitous conduct.

In this scenario, rights to recover arise when three conditions are met:

  • The act or thing is lawfully performed or delivered.
  • A person who performed the act or provided the item has no intention of doing so for free.
  • The individual to whom such an act is performed or the item is delivered has benefited from it.

Goods finder’s responsibility

An individual who discovers and takes possession of goods belonging to another individual. The finder of items bears the same responsibilities as a bailee.

Receiver in case of mistake or coercion

If a person pays money or delivers anything to another person by mistake or under duress, the later must reimburse or restore the former’s money or item.

Compensation for quasi-contract failure

Any individual injured as a result of a failure to perform a quasi-contract has the right to seek compensation from the defaulting party, just as in the event of a normal contract.

Key Differences

  • A fundamental contract consists of an offer and acceptance with free consent. A quasi-contract, on the other hand, is not a contract at all because it lacks one or more contract features.
    In the case of a contract, the obligation arises from the parties’ agreement. In the case of a quasi-contract, the duty arises from the operation of law based on the principle of equity.
    A basic contract has all of the necessary parts of a valid contract. A quasi-contract, on the other hand, lacks key contract characteristics.
  • The assent of the parties in a contract is free and voluntary. In contrast, the parties’ consent is not voluntary.
  • In the case of a contract, the parties’ liability is defined by the terms and conditions that have been agreed upon. In the case of a quasi-contract, the parties’ culpability arises from their actions. Furthermore, it is founded on morality, natural justice, equity, and a clear conscience.
  • The parties create a contract voluntarily. A quasi-contract, on the other hand, is created by law.
  • In the case of a contract, the parties have both rights in rem (against the entire world) and rights in personam (against the parties themselves) (against the person or enterprise). In the case of a quasi-contract, however, give the party the right in personam (against the person or enterprise).

Comparison Table

Sr.NoContractQuasi contract
1Two or more parties will come together for common intention and generate an agreement.Not a real contract.
2It is always an agreement between the parties.No agreement between parties.
3Parties will give their consent.Parties’ consent is not required.
4Liability exists between parties by terms.Liability is independent of agreement.
5It is created by the operation of a contract.It is not created by the operation of a contract.
6It includes right in rem and right in personal.It includes only right in personal.
7It has free consent.It is imposed by law.
8Parties must be competentA person who is entitled will receive the incurred expenses.
9Lawful considerations and lawful objects.It is raised by legal fiction.

Conclusion

Overall, a contract is an agreement between people that generates and defines duties. A quasi-contract, on the other hand, is a legal alternative to a contract.