Contracts are express when their terms are stated by the parties. Contracts are implied when their terms are not so stated. The expression "implied contract" has given rise to great confusion in the law. Until recently the divisions of the law customarily made coincided with the forms of action known to the common law. Consequently, all rights enforced by the contractual actions of assumpsit, covenant and debt, were regarded as based on contracts. Some of these rights, however, were created not by any promise or mutual assent of the parties but were imposed by law on the defendant irrespective of, and sometimes in violation of, his intention. Such obligations were called implied contracts. A better name is that now generally in use of "quasi-contracts." 6 This name is better since it makes clear that the obligations in question are not true contracts, and also because it avoids confusion with another class of obligations which have also been called implied contracts. This latter class consists of obligations arising from mutual agreement and intent to promise but where the agreement and promise have not been expressed in words. Such' transactions are true contracts and have sometimes been called contracts implied in fact.7 In the present work the words implied contract will not be used to include quasi-contractual obligations.
6A "quasi-contract" is a constructive contract which is raised by law to enforce legal duties by contract action, where an express or implied contract does not actually exist. Brown's Estate v. Stair, 26 Colo. App. 140,138 Pac. 1003.
7 A "contract implied in fact" requires a meeting of the minds, an agreement, just as much as an "ex-pros contact"; the difference between the two being largely m the character of the evidence by which they are established. Lombard p. Rahilly, 127 Minn. 440, 149 N. W. 950.
In Highway Com'rs v. Bloomington, 253 III. 164, 97 N. E. 280, 284, in speaking of quasi-contracts, the Court said: "The liability exists from an implication of law that arises from the facts and circumstances, independent of agreement or presumed intention. Pracht v. Daniels, 20 Colo. 100, 36 Pac. 845. In this class of cases, the notion of a contract is purely fictitious. There are none of the elements of a contract, that are necessarily present. The intention of the parties in such case is entirely disregarded, while in cases of express and implied contracts in fact the intention is of the essence of the transaction. In the case of contracts, the parties fix their terms and set the bounds upon their liability. As has been said, in the case of contracts, the agreement defines the duty, while in the latter class of cases 'the duty defines the contract.' Hertsog v. Hertsog, 29 Pa. 465, 468; Columbus, Hooking Valley & Toledo Railway
It is important to distinguish between quasi-contracts and contracts implied in fact, not only because it is desirable for clear theoretical analysis, but also because of the differing results which may follow when an obligation is a true contract from those which follow from a quasi-contract. In the first place as quasi-contractual obligations are imposed by the law for the purpose of bringing about justice without reference to the intention of the parties, the only limit upon the power of the law to create such obligations is that they must be of such a sort as to be capable of enforcement in a contractual action; while a true contract cannot exist, however desirable it might be to have one, unless there is an expression of assent to the making of a promise. Furthermore, the measure of damages appropriate to contractual and quasi-contractual obligations differs.8
Quasi-contractual obligations are often assumed to be confined to obligations for the payment of money enforceable under common-law procedure by the common counts. There are, however, unquestionably obligations imposed by law without reference to mutual assent and enforceable only in special assumpsit as if they were actual contracts. Accuracy of reasoning requires a recognition of such obligations also as quasi-contracts.9
It is also true that quasi-contractual obligations are not so universally based on unjust enrichment or benefit as is sometimes supposed. There are many cases where the law enforces in a contractual action a duty to restore the plaintiff to a former status-not merely to surrender the benefit which the defendant has received. This is true wherever the plaintiff has a right to rescind a transaction because of the defendant's wrong, whether fraud, duress or breach of contract; and though the amount of the defendant's enrichment will frequently be identical with the amount necessary to restore the plaintiff to his former condition this is by no means always the case.10
Co. d. Gaffney, 65 Ohio St. 104, 61 N. E. 152."
See also People v. Dummer, 274 111. 637, 113 N. E. 934; W. A. Snow Iron Works v. Chad wick, 227 Mass. 382, 116 N. E. 801; Anderson v. Caldwell, 242 Mo. 201,146 S. W. 444; Miller v. Schtoss, 218 N. Y. 400, 113 N. E. 337; Morse v. Kenney, 87 Vt. 445, 89
Atl. 866; Wojahn v. Nat Union Bank, 144 Wis. 646, 129 N. W. 1068; Underbill v. Rutland R., 90 Vt. 462, 98 Atl 1017.
8 See infra, Sec.Sec. 1470-1473.
9An illustration of such an obligation may be found in the law of implied warranty.
There are in our system of law, and in other systems of law, two ways in which promises may be made binding and thereby become contracts. One way is by giving the transaction a certain form, the other is by compliance with requisites based on the essential nature of the transaction rather than on the form which it takes.11 In the Roman law as well as in the early German and in the English law, the validity of formal contracts was established before contracts of the latter sort were recognized. Formal contracts in our system of law are-
(1) Promises under seal.
Judgments have often been classified as contracts of record, but this is due to the fact that a judgment could be sued upon in an action appropriate to the enforcement of contractual liability. There is no element of promise in a judgment. Contracts in writing have been given by statute in some States some of the attributes of contracts under seal, and to this extent have become formal contracts.12
The Roman law required as a general rule that an agreement in order to be binding should take the form of a stipulation; but to this rule there were considerable exceptions. The modern Civil law has entirely abandoned the requisite of form as a general basis for the validity of contracts, and the mere expressed will of the parties however declared is sufficient to create a contractual obligation,13 subject to some statutory exceptions.14 A cause or motive for the contract is indeed required in the French code 15 and in many of the codes based upon it,16 but as a spirit of liberality or the "satisfaction of a sentiment of generosity " is sufficient cause 17 the requirement amounts simply to an inhibition of agreements based on illegality, mistake or fraud; and in the German code 18 and some other modern codes, the requirement is altogether omitted.19 Sec. S. Contracts under seal.
10 See infra,Sec.1478 et seq.
11That is, for a simple contract, there mart be mutual assent and con-sideration
12 See infra, Sec.218.
13 Windscheid, Lehrbuch, Sec. 312; Bur-gerliohes Gesetsbuch, Sec.Sec. 116 et seq., 145.
14 Notarial authentication is requisite for the validity of some contracts.
The formality recognized by the English law as giving legal force to a promise is a seal. Centuries before the recognition of simple contracts, promises under seal were held binding.20 They were variously called deeds, specialties, or covenants, A seal was a legal formality essential for the transfer of property in many cases, and the words "deed" and "specialty," both include transfers under seal, as well as promises under seal. The word "covenant," on the contrary, is appropriate only to promises under seal. Contracts under seal were enforced at common law by the action of covenant unless the contract was for the payment of a fixed sum of money. In that case debt was the exclusive remedy until the seventeenth century.21 Afterwards covenant became a concurrent remedy.22 Sec. 6. Recognizance.
A recognizance is an acknowledgment in court by the recognizor of an obligation that he is bound to a certain payment subject to the condition that on the performance of a specified act the obligation shall be discharged. As a recognizance is in terms an undertaking and is created by the act of the recognizor, it is properly classified as a contract.23 Sec. 7. Negotiable instruments.
15 Code Civil, Art. 1131, 1133.
16 See Lorensen, 28 Yale L. J. 621.
17 Lorombiere, Obligations, Art. 1131, Sec. 2.
18 Burgerliches Genetsbuch, Sec. 305.
19 Lorensen, 28 Yale L. J. 021, 642.
20This was established before the end of Edward I's reign. Pollock ft Maitland'a History of Eng. Law (2d ed.), 219.
21 21Ames, 2 Hair. L. Rev. 56.
22 3 Bl. Coram. 154.
23See National Surety Co. v. Nasnegotiable instruments. Certain formal requisites are necessary in order to constitute a writing a bill exchange or promissory note.23a If these requisites are complied with, the contract represented by the writing is a formal contract. Such instruments are in vogue throughout the commercial world and the rules of law applicable to them under our system of law and under the civil law prevailing on the Continent of Europe are in most respects the same. The English and American law of negotiable instruments have, however, been much affected by the law of simple contracts, and some principles not originally applicable to negotiable instruments have been attached to them in this way. It is still true, however, that no adequate understanding of the law of bills and notes is possible without recognizing that, they are formal contracts-mercantile specialties.24 Assumpsit and debt were the proper remedies for the enforcement of liabilities on negotiable instruments.25