October 7, 2022

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How is Quasi Contract Different from Standard Contract?

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In many senses, contracts are different from Quasi Contracts; the major is that contracts are lawfully bound, but the latter is not. Here is the comparison between the two.

Talking about Contracts, they are a promise to make an agreement that will get enforced by the law. If there is a contract, both parties get legally bound by the agreement. A Quasi Contract is a specific relationship similar to that created by contracts.

In a business where there is no contract between the parties, the law creates certain rights and obligations similar to those of the contract. Contracts are promises that will get enforced. The law provides remedies if a contract is broken or recognises the fulfilment of a contract as a duty.

Quasi-contracts differ from commonly referred to as contracts as they consist of each expression in words, and in the latter, goals get formed by the parties’ performances.

What is a Contract?

An agreement between two or more parties creates enforceable or lawfully recognised obligations. Contracts come from where the duty is done or will get performed in the future due to a promise made by one of the parties. For it to become a legal obligation as a contract, the promise must get exchanged for fair consideration.

Adequate consideration is the advantage or disadvantage of a party that receives it, which appropriately and fairly appeals to make a promise/contract.

 

What are Quasi Contracts?

English law first identified quasi-contractual obligations; the founders of the Indian Contract Law amended it and defined it in the Law as a certain kind of relationship created by contracts. Therefore the elements contained in the English Quasi-contract are also available in the Indian Contract Act.

Although the Indian Contract Act of 1872 does not define a quasi-contract, it refers to a similar relationship of contracts. Meanwhile, a quasi-contract can get defined as an exchange in which there is no contract between the parties; the law generally creates certain rights and obligations similar to those created by the contract.

According to section 69 of Indian Contract Act, the procedural term ‘quantum meruit’ has been persistent and is sometimes used as a synonym for the common expression ‘quasi-contract’ refers to any financial claim for amortisation.

Basically, in other words, a contract that is legally binding on the grounds of equality without a consent statement is equal. A Quasi Contract is formed through a situation that puts obligations or responsibilities on the parties legally instead of the consent given to the terms of the contract.

There are many instances where the law and justice require that a person gets required to guarantee an obligation, even though he has not breached any contract or committed any act of abuse.

It shows that one cannot get the wrong benefits at the expense of another person. Such obligations are often defined, in search of a better or more appropriate term, such as Quasi-Contractual Obligations. A Quasi Contract is formed through the performance of one party to the other without any legal binding.

 

What are the liabilities under Quasi-Contract?

Typically, the quasi-contract doctrine gets used in disputes regarding overpayment of goods delivered or services provided. If no contract is valid between the parties, the main question arising from such cases is the defendant’s obligation.

Since this doctrine aims to prevent the unfair enrichment of one party at the expense of another, the damage is usually limited to the number of services rendered or delivered goods cost.

According to section 69 of Indian Contract Act, the accountability of a party that has enjoyed unfair benefits gets limited to the value of that benefit alone.

 

Quasi Contract and Implied-In-Fact Contract

A characteristic feature of quasi-contract is the absence of contract or similar consent between the parties. Quasi-contracts are confused with implied-in-fact contracts.

The contracts referred to as Implied-In-Fact are not contracts in the literal sense, as they do not have a written agreement. In the latter case, even if there is no contract between the parties as stated in the facts, the actions and words of the parties are equivalent to agreeing on a disputed issue.

 

An example illustrates the difference between the two:

A went to the doctor for treatment. Here, there is a consensus between A and the doctor. As he Awaits medical treatment, the doctor expects payment from A for his services.

It is an example of a contract mentioned as Implied-In-Fact, where the parties’ conduct has raised the same consent. However, according to the contract, the parties to the dispute did not even know each other. Therefore, there is no question of agreement between them.

 

Conclusion

Contract means a legally binding agreement, and the agreement contains the same promises between the two parties. In the case of a contract, both parties get lawfully bound by a promise made. An undertaking contract can come in the following ways:  standard form agreements, and promissory estoppel.

Quasi Contract is the law’s agreement that states the type of evidence established by which the plaintiff may claim, but the obligation arises lawfully.

Although the defendant will not intend to take any responsibility, the law will impose an obligation because the avoidance of unfair gain depends on the plaintiff’s expense.

It has been recognised that these contracts and quasi-contracts are critical issues, and the concept revolves around agreement and bonds between the parties.