Quasi Contract Case Study

A quasi contract, also known as an implied-in-law contract, is a legal concept used to impose obligations on parties who did not enter into a formal agreement. This type of contract is not created by the parties` intention to create a contract but rather by law, to prevent one party from unjustly enriching themselves at the expense of another.

In the case of Hamer v. Sidway, a quasi contract came into play when William E. Story, the uncle of William E. Story II, promised his nephew that he would pay him $5000 if he refrained from using tobacco, alcohol, and gambling until he turned 21. The nephew, William E. Story II, upheld his end of the bargain, but his uncle failed to fulfill his promise.

After the death of William E. Story, the nephew attempted to collect the $5000 owed to him by his uncle`s estate. The estate refused to pay, arguing that there was no consideration or consideration was not of any value when the agreement was made.

However, the court held that the nephew`s abstinence from the vices his uncle wanted him to avoid was valid consideration for the contract. Because the nephew had fulfilled his end of the contract, the court found that the uncle`s promise to pay $5000 was enforceable.

This case demonstrates the use of quasi contracts as a means to enforce obligations imposed by the law. While not all contracts must be in writing, it is essential to understand that a promise made can be legally binding, even if it is not in writing. Parties should carefully consider the terms of any agreement, whether formal or informal, to avoid any misunderstandings or legal battles down the line.

In conclusion, the Hamer v. Sidway case provides an excellent example of how quasi contracts work in practice. While not all agreements may be legally binding, parties should be aware that their promises can have legal consequences, even if they did not intend to create a formal contract. Understanding the basics of contract law and quasi contracts can help parties avoid disputes and protect their rights and obligations under the law.