§ 1.20 Contract and Quasi Contract Distinguished

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A distinction has long been suggested between contracts ''implied in fact'' and contracts ''implied in law.'' A contract that is implied in fact has just been discussed in the preceding sections; it is one sort of an express contract. Something very different is meant by the term contract ''implied in law.'' It is an obligation that is created by the law without regard to expressions of assent by either words or acts. Some confusion was caused by the use of the term ''implied contract'' to refer to such different kinds of obligation; and the tendency is now strong to substitute the term ''quasi contract'' in place of the term ''contract implied in law,''n1 and, perhaps adding to the confusion, is the tendency to substitute the term ''restitution'' for both of these terms. In this area there is a profusion of terms that are nearly, but not quite, synonymous. For example, although the Restatement (Second) of Contracts defines ''quasi-contracts,''n2 it seems never to use the term in its statement of the law. Instead, when it directly engages quasi-contractual rights and remedies, it employs the term ''restitution.''n3 In so doing, it widens the gulf between the academic lawyer and the majority of the legal profession. Only in relatively recent times, with the publication of the Restatement of Restitution in 1937, has ''restitution'' become a term of art. The term encompasses rights at law known as quasi-contractual rights and certain equitable rights that perform similar functions, particularly rights to the creation of constructive trusts. ''Unjust enrichment'' is occasionally used as a synonym for restitution; one sometimes hears of a ''law of unjust enrichment.'' Its primary use, however, should be to state an ultimate fact: ''because X was unjustly enriched, X must make restitution.''

A contract ''implied in law'' is a fictitious contract. The fiction was created to fit certain actions into the writ of assumpsit. A contract ''implied in fact'' is a true contract that arises from the tacit agreement of the parties. Because students, practitioners, and even Blackstone were confused by the distinction between the two kinds of implied contracts, pioneering scholars Keenern4 and Woodwardn5 sought to extirpate the term ''contract implied in law'' from legal usage and to substitute for it the term ''quasi contract,'' which was borrowed from Roman law and only rarely used in the common law before 1893.n6 Although the new term ''quasi contract'' took hold, the older term successfully resisted extirpation to the further confusion of law students and lawyers. Because so many quasi-contractual actions are brought in the common counts, the term quantum meruit is sometimes used as the equivalent of the term quasi contract.n7 Of course, it is not an equivalent term.n8

The term ''quasi contract'' is directly derived from the Roman law, in which obligations were classified as arising ex contractu or quasi ex contractu and ex delicto or quasi ex delicto. The term has the merit of helping to avoid the older confusion by reason of its unaccustomed and foreign form. It has the demerit of being wholly non-descriptive and also of actually continuing a similar confusion. The term quasi is introduced as a weasel word, that sucks all the meaning of the word that follows it; but this is a fact that the reader seldom realizes.

A quasi-contractual obligation is one that is created by the law for reasons of justice, without any expression of assent and sometimes even against a clear expression of dissent. Because this is true, it might be better not to use the word ''contract'' at all. Contracts are formed by expressions of assent. Quasi contracts quite otherwise. The legal relations between contractors are largely dependent upon the interpretation of their expressions of assent. In quasi contract the relations of the parties are not dependent on such interpretation. Where, however, there is an enforceable express or implied in fact contract that regulates the relations of the party or that part of their relations about which issues have arisen, there is no room for quasi contract.n9 Quasi contract, however, often arises in the context of a true contract or of an agreement that is not a binding contract. If the true contract between the parties is avoided for duress, fraud or the like, or is discharged because of impossibility or frustration, or never came into being because of indefiniteness of its subject matter, or is unenforceable, quasi contract is often employed to resolve the rights of the parties.

While there is a great variety of quasi-contractual obligations and probably numerous sound ways to classify them, one great and fundamental dichotomy should be deemed essential: quasi contract as a source of primary rights versus quasi contract as a remedy.n10 This division is best clarified by illustration. If A, a stranger, unofficiously pays the funeral bill for the burial of X's spouse, A may recover the reasonable costs from X. n11 There was no antecedent right-duty relationship between A and X. The law of quasi contract dictates, however, that X must reimburse A despite the absence of any preexisting duty owed by X to A. It is, then, the body of law known as quasi contracts that is the source of X's obligation, and the source of A's correlative primary rights, as well as of A's remedy. If X and A had entered into a contract whereby A had agreed to render services for X, A's rights would be defined by the law of contracts. These rights may be termed primary rights. In the event that X breaches the contract, the law gives A certain secondary (remedial) rights which either supplement the primary rights or substitute for them entirely. One of the remedial rights is a right to restitution, often termed ''quasi contract.''