A quasi contract may be defined as a legal obligation arising out of the receipt of a benefit for which there has been no actual promise to pay the retention of which without compensation would be unjust. The law therefore raises the obligation to pay for it.
A quasi contract is not a contract at all, and may in fact exist in cases in which there is not only no resemblance to a contract, but under circumstances that completely rebut such an idea, for instance, theft cases. Why is it then that we use the word quasi contract (like contract) ?
148. Hertzog v. Hertzog, 29 Pa. St. 465.
We have seen that there is civil liability where one breaks an obligation arising out of agreement (the law of contracts) ; and civil liability where one breaks an obligation imposed upon him by the general law (the law of torts), and this, offhand, might seem to cover the entire field of civil liability; and it is quite thinkable that in the development of the law of torts, that which we now call quasi contract might have been included; and, indeed, we will see that under some circumstances one may sue in tort or quasi contract at his election.
In the history of the English common law there developed the theory of the "form of action" in bringing suit, whereby any suitor had to find a form of action established by precedent to fit his case, and it was a rigid adherence to this theory which was partially responsible for the development of courts of equity. Two kinds of forms of action to enforce personal liability developed, the actions ex delicto (tort actions) and the actions ex contractu (contract actions) and there were a number of each. Now, if one had received a benefit that he ought to pay for, a refusal to pay for which would result in his unjust enrichment at another's expense, the court readily saw that the injured person should have his remedy - yet there was no formal action to fit his case. So, the courts permitted his suit upon the theory that out of the receipt of the benefit, the law would imply a contract to pay for it, and thus permitted an action ex contractu to be brought - and so came to be the so-called class of contracts known as quasi contracts, or contracts implied in law as distinguished from contracts implied in fact, which we have considered in the last section and which are true contracts.
The theory was extended to embrace cases in which there was a tortious taking of property - cases in which a tort action (trover) could be brought, or the plaintiff could "waive the tort and sue in contract."
The following examples will illustrate the theory of quasi contract - note that the contractual intent is wanting, yet the plaintiff sues on a quasi contract or contract implied in law. These cases may be divided into the following classes:
(1) Cases in which money is paid or other property parted with under a mistake of fact.
Example 66. A pays money to B, under the belief that B is C. A can recover this money from B, although there may be no fraud on B's part. In the same way if A through error of calculation overpays his debt, he may recover the over payment. In these cases, the recipient may be acting in perfect honesty so that he cannot be charged with a tort, and there is no actual promise to repay. The recovery is on quasi contractual basis.149
(2) Benefit conferred under contract broken by plaintiff.
If a contract has been broken by plaintiff, he cannot sue thereon. But suppose he has conferred benefits thereunder; in some jurisdictions he is allowed to sue on quasi contractual basis. See subject discussed in chapters on Discharge of Contracts, post.
(3) Property parted with under compulsion and protest.
Example 67. A telephone company charges a rate which B believes to be excessive and unwarranted under the company's franchise. But B cannot get telephone service without paying the rate demanded. He pays under protest. He may recover upon showing that the charge was illegal.150
149. Devine v. Edwards, 101 111. 138.
(4) Benefit conferred through "dutiful intervention."
A being in a strange locality is killed. It becomes necessary for someone to go to expense. B, an undertaker, does so. He may recover from the estate.151
150. Chicago R. Co. v. Chicago Coal Co., 79 111. 121.
151. Patterson v. Patterson, 59 N. Y. 574.