In some cases, the courts will pretend that there is a contract when in fact there is no contract. Such a "make believe" contract is called a quasi contract.

(a) Prevention of unjust enrichment. These quasi contracts are rec­ognized in a limited number of situations in order to attain an equitable or just result. These instances may be classified in terms of situations in which there is no contract between the parties, those in which there was a contract between the parties but it has been avoided, and those in which there was an attempted contract but for some reason the agreement is held illegal and therefore void.

(1) No Contract. In some cases the hoped for contract is never formed. The parties expect there will be a contract but something happens that prevents their reaching a final agreement. Meanwhile, one or more of the parties may have jumped the gun and begun performing as though there were a contract. When it is finally clear that there is no contract, a party who had rendered some performance will seek to be paid for what was done. The claim will be made that if payment is not made the other party will be un­justly enriched.

The "no contract" case may arise in a situation where there is a mis­take as to the subject matter of the contract. For example, a painter may begin painting the house of A because of a mistake as to the address of the btlilding. A sees the work going on and realizes the painter is making a mis­take. Nevertheless, A does not stop the painter. When the painter finishes the work and presents a bill for painting, A then refuses to pay because there never was a contract. This is true because A never expressly agreed for the painting. Likewise, the conduct of A never caused the painter as a reasonable person to believe that A was entering into a contract. The painter just as­sumed that everything was all right.

In such case, the law deems it inequitable that A should have remained silent and then reaped the benefits of the painter's mistake. A will therefore be required to pay the painter the reasonable value of the painting. This liability is described as quasi contractual.

(2) The Avoided Contract. In some situations, one party to the contract may be able to avoid it or set it aside. As will be seen in Chapter 13, the contract of a minor can be avoided. If the contract was for a necessary received by the minor, the minor must pay the reasonable value of what was received. The minor is not required to pay the contract price but only the reasonable value of the benefit received. As the liability enforced against the minor is not based on the contract, it is called quasi contractual.

(3) The Void Agreement. In some instances, the parties make a con­tract, one party receives the benefit of the contract, and then the benefited party seeks to avoid paying on the ground that the contract was void because of illegality. For example, governmental units, such as cities, must generally advertise for the lowest responsible bidder when a contract is to be made to obtain supplies or to construct buildings. In some instances, the city officials may improperly skip the advertising. This might be done either because of a corrupt purpose or because the officials honestly but wrongly believed that the particular contract came within an exception to the requirement of adver­tising. Whatever the reason, the city officials enter into a contract with a con­tractor without following the statutory procedures. The contractor fully performs the contract. When the contractor requests to be paid, the city officials refuse to live up to the contract on the ground that the contract vio­lated the statutory requirements and therefore was illegal and therefore was void. In such cases, it will be held that although the contract is void, the city must still pay the reasonable value of what has been done. In this way, the contractor gets paid for what the contractor really did. The city is not re­quired to pay for any more than it has actually received. The danger of the city's paying out inflated prices, which was the evil that the advertising statute sought to avoid, does not arise because the court does not require the city to pay the contract price but only the reasonable value of the benefit conferred upon the city.

(b) When Quasi-Contractual Liability Does Not Exist. While the objective of the quasi contract is to do justice, one must not jump to the conclusion that a quasi contract will arise every time there is an injustice. The mere fact that someone has benefited someone else and has not been paid will not necessarily give rise to a quasi contract. For example, no quasi-contractual obligation arises when the plaintiff merely confers upon the de­fendant a benefit to which the defendant was already entitled.

(1) Unexpected Cost. The fact that performance of a contract proves more difficult or more expensive than had been expected does not entitle a party to extra compensation when there was no misrepresentation as to the conditions that would be encountered or the events that would occur and particularly when the party complaining is experienced with the particu­lar type of contract and the problems which are likely to he encountered. That is, the contractor is not entitled to quasi-contractual recovery for extra expense on the theory that the extra work had conferred a greater benefit than had been contemplated.

(2) Contract with Third Person. When a person has a binding con­tract with a third person, only that person is required to pay for the perfor­mance made under the contract. Even though performance did benefit the defendant, the person cannot sue the defendant for quasi contract when the third person fails to make payment under the contract. For example, a sub­contractor doing work which benefits the homeowner can only sue the con­tractor on the contract between the subcontractor and the contractor. The subcontractor cannot sue the owner merely because the owner was benefited by the work done by the subcontractor.

FACTS:

Lombard insured his car. When it was damaged, the insurer took the car to General Auto Service for repairs. The insurance com­pany did not pay the repair bill. General Auto Service sued Lombard for the repair bill because he had benefited by the repair work.

DECISION:

Judgment for Lombard. General Auto Service had a contract with the insurance com­pany. The fact that the insurance company did not pay in accordance with its contract did not give General the right to sue Lombard, even though he had benefited by the work done. General could only sue the insurance company on its contract and could not sue Lombard in quasi contract. [General Auto Service, Inc. v Lombard (La) 151 So2d 536 (1963)

(3) No Unjust Enrichment. In order to recover in quasi contract the plaintiff must prove that the defendant was enriched, the extent or dollar value of such enrichment, and that such enrichment was unjust. If the plaintiff can not prove all these elements, there can be no recovery in quasi contract.