What is the difference between Contracts and Quasi Contracts?

This article contains the differences between Contracts and Quasi Contracts.

Contracts

  1. A contract is a contract between two parties. In contract, always there is an agreement between the parties.
  2. In contract, always there is an agreement between the parties.
  3. In contract, the parties must give their consent to it.
  4. In contract, the liability exists between the parties by the terms of the parties.
  5. Examples: A sells his house to B for certain consideration. It is a contract. The consumers purchase the goods and services from the shop-owners.
  6. It is created by the operation of the contract.
  7. It is right in rem, and also right in personam.
  8. Sec. 2(h) of the Indian contract act, 1872, defines contract: “an agreement enforceable by law is a contract”.
  9. The word “contract” is divided from the Latin “contractum” which gives meaning “drawn together” or “consensus ad idem (identity of minds). Thus the meaning of “contract” is a drawing together of two or more minds to form a common intention giving rise to an agreement”.
  10. 10. Essentials:
    • Free consent;
    • The parties must be competent;
    • There must be lawful consideration and lawful object;
    • The agreement must not expressly be declared to be void; and
    • If the law in force requires, it must be registered.
  11. Example: A enters into a hotel and eats some food. It is the liability of A to pay the consideration for food. It is an implied contract. The contract is implied in fact. It is a true contract.

Quasi Contracts

  1. A quasi-contract is not a real contract. Quasi contracts are also known as “constructive contracts” or “certain relations resembling those created by contracts”.
  2. Where as in quasi-contract, there is no agreement between the parties.
  3. Where as in quasi-contract, the parties do not consent.
  4. In quasi-contract, the liability exists independent of the agreement and rests upon equity, justice and good conscience.
  5. Example: A is a lunatic. He has some property. B-son of A, met an accident. Moved by the pitiable condition of the boy-B, X spends Rs. 1,000/- for B’s treatment. X can claim this amount from A and his property.
  6. It is imposed by law. It is not created by the operation of the contract.
  7. It is right in personam. I.e. strictly available against a person and is not available against the entire world.
  8. Salmond defines quasi contracts: “there are certain obligations which are not in truth contractual in the sense of resting on agreement, but which the law treats as if they were”.
  9. Lord Mansfield explained that law as well as justice should try to prevent “unjust enrichment”. I.e. enrichment of one person at the cost of another. He explains: “it is clear that any civilized system of law is bound to provide remedies for cases of what has been called unjust enrichment or unjust benefit, i.e. to prevent a man from retaining the money of, or some benefit derived from, another which it is against conscience that he should keep. Such remedies in contract or tort, and are now recognized to fall within a third category of the common law which has been termed as quasi-contract or restitution”.
  10. Essentials:
    • It is imposed by law. It is not created by contract;
    • It is a right in personam;
    • The person who incurs expenses is entitled to receive money (unjust enrichment); and
    • It is raised by a legal fiction.
  11. Example: A- a publisher entrusts to B a printer to print a book. Half of the printing work is completed. Then B finds that the book is libelous one and he may be prosecuted by the state. He stops the work. What would be his position? Then came’s the doctrine of “quasi-contracts”. It gives reasonable remuneration for the services actually rendered by B. B is entitled to get reasonable remuneration from A for the work completed. Here it becomes “a contract implied in law”. It is a quasi-contract.