Legal Definitions - implied-in-law contract

An implied-in-law contract, also known as a quasi-contract, is not a true agreement formed by the explicit or implicit consent of the parties. Instead, it is a legal obligation imposed by a court to prevent one party from unfairly benefiting at the expense of another. The court creates this "contract" to ensure fairness and justice, even when there was no actual intention by the parties to enter into a contractual relationship. The core principle is to prevent "unjust enrichment," meaning one person should not be allowed to keep money or property that rightly belongs to another, simply because there was no formal agreement.

Here are some examples illustrating an implied-in-law contract:

• Emergency Medical Services: Imagine a person collapses unconscious in a public place and is rushed to the hospital by an ambulance. The medical staff perform life-saving procedures and provide necessary care. Upon recovery, the patient receives a bill for these services.

  How it illustrates the term: The unconscious patient never explicitly agreed to receive or pay for the ambulance ride or medical treatment. However, they received a critical benefit (their life was saved) at the expense of the ambulance service and hospital. It would be unjust for the patient to refuse payment for these essential services once they recover. A court would impose an implied-in-law contract, obligating the patient to pay the reasonable cost of the emergency care to prevent them from being unjustly enriched.

• Mistaken Delivery and Use of Goods: A manufacturing company accidentally delivers a large shipment of specialized components to the wrong factory. The recipient factory, realizing the mistake but needing the components for an urgent production run, decides to use them without informing the delivering company.

  How it illustrates the term: There was no actual contract for the sale of these components between the two factories. However, the recipient factory knowingly received and used valuable goods that belonged to another company. It would be unfair for them to benefit from these components without paying for them. A court would impose an implied-in-law contract, requiring the recipient factory to pay the delivering company the fair market value of the components to prevent unjust enrichment.

• Unsolicited Home Improvement with Acquiescence: A homeowner is away on an extended vacation. A landscaping company, mistakenly believing they were hired by the homeowner's neighbor for a similar address, completely re-landscapes the homeowner's front yard, installing new plants, sod, and an irrigation system. The homeowner returns, sees the completed work, and enjoys the improved yard without attempting to contact the landscaping company or correct the mistake.

  How it illustrates the term: The homeowner never hired the landscaping company, so no actual contract exists. However, they received a significant and valuable benefit (a newly landscaped yard) and, upon discovering the mistake, chose to accept and retain that benefit without taking any action. It would be unjust for the homeowner to enjoy the improved property without compensating the landscaping company for the reasonable value of their work. A court could impose an implied-in-law contract to ensure the landscaper is paid and the homeowner is not unjustly enriched.