3.4 Implied-in-Fact Contracts & Quasi-Contract

Implied-in-Fact Contracts & Quasi-Contract

Contracts Implied in Fact

Contracts are categorized by the method of their formation. It is vital not to confuse a contract implied in fact with a contract implied in law.

Definition and Elements

A contract implied in fact is an actual, true contract formed by the conduct of the parties rather than by explicit oral or written words. Under Restatement (Second) § 4, a promise may be stated in words or may be inferred wholly or partly from conduct.

To establish a contract implied in fact, the plaintiff must prove:

1. Performance of Services: The plaintiff furnished services, property, or goods to the defendant under circumstances indicating that compensation was expected;
2. Defendant's Knowledge: The defendant knew or had reason to know that the plaintiff expected compensation;
3. Voluntary Acceptance / Opportunity to Reject: The defendant accepted the benefit with an opportunity to decline or object, knowing compensation was expected;
4. Tacit Mutual Assent: A reasonable person observing the parties' objective conduct would infer an intention to enter into a binding agreement.

Classic Everyday Examples

• The Barber Chair: You walk into a barbershop, sit in the barber's chair, and nod when the barber raises scissors. No price or words are exchanged. When the haircut is finished, an implied-in-fact contract exists; you are legally bound to pay the customary posted price.
• The Restaurant Order: Ordering dinner at an upscale restaurant where prices for daily specials are not listed creates an implied-in-fact contract to pay the reasonable market price.
• Entertainment Idea Submissions (Desny v. Wilder): In California, submitting a screen idea or treatment to a studio executive under industry custom where ideas are pitched with the mutual understanding that payment will follow if the idea is used gives rise to an implied-in-fact contract.

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Contracts Implied in Law (Quasi-Contract / Quantum Meruit)

A contract implied in law (or quasi-contract) is not a contract at all. It is a legal fiction created by the courts of equity to prevent unjust enrichment. No mutual assent, offer, acceptance, or promissory intent is required.

The Four Core Elements of Quasi-Contract

To recover in quasi-contract, the plaintiff must establish:

1. Measurable Benefit Conferred: The plaintiff conferred a tangible, measurable economic benefit upon the defendant;
2. Reasonable Expectation of Compensation: The plaintiff conferred the benefit with the reasonable expectation of being paid (i.e., not intending a gift or acting gratuitously);
3. Defendant's Appreciation & Retention: The defendant knew of or appreciated the benefit and retained it;
4. Unjust Retention: Under the circumstances, it would be fundamentally inequitable and unjust for the defendant to retain the benefit without paying for its fair value.

The Measure of Recovery: Quantum Meruit

Damages in quasi-contract are restitutionary:

• Quantum Meruit: "As much as he deserved"—the reasonable market value of the services rendered.
• Quantum Valebant: "As much as they were worth"—the reasonable market value of goods provided.
• Crucial Rule: Recovery is measured by the reasonable market value of the benefit conferred onto the defendant, NOT by the plaintiff's lost profits, subjective valuation, or expectation interest.

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The Officious Intermeddler vs. Emergency Medical Aid

The most tested distinction in quasi-contract on the FYLSE is the clash between the officious intermeddler and the emergency aid exception.

The Officious Intermeddler Doctrine

An officious intermeddler (or volunteer) is an individual who thrusts an unrequested benefit upon another without their consent, without an emergency, and without giving the recipient an opportunity to refuse. The officious intermeddler cannot recover in quasi-contract.

Example: While you are at work, an enterprising landscaper rakes your yard, trims your trees, and plants prize roses without your knowledge. When you arrive home, the landscaper demands $500 for services rendered. Even though your property value increased, you owe nothing. The landscaper acted officiously, denying you the opportunity to reject the work.

The Emergency Medical Aid Exception

Under Restatement (Third) of Restitution and Unjust Enrichment § 20, an important exception to the requirement of prior consent exists for emergency medical services rendered to an incapacitated person:

1. The plaintiff is a licensed medical professional (physician, paramedic, hospital);
2. The defendant was incapacitated or unconscious, rendering consent impossible;
3. The treatment was necessary to preserve life or health;
4. The professional had no reason to believe the recipient would decline;
5. The services were provided professionally, creating a standard presumption against gratuitous aid.

Under this exception, the law presumes that a reasonable person would have requested life-saving treatment, permitting the physician or hospital to recover the reasonable value of emergency services in quantum meruit.

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Comparison: Contract Types & Non-Contractual Remedies

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FYLSE Exam Scenarios & Doctrinal Traps

Scenario 1: The Paving Error (Constructive Knowledge vs. Absence)

Hypothetical: Driveway Paving Co. mistakenly believes it has a contract to pave Lot 12, which belongs to Brown. Paving Co. shows up at Lot 12 with heavy equipment and begins paving. Brown is sitting on the front porch with a cup of coffee, realizes the crew is paving the wrong driveway, but says nothing because Brown's old gravel driveway needed work. After the job is completed, Paving Co. discovers its clerical error and demands payment. Analysis: Brown is liable in quasi-contract for the reasonable value of the paving. Although there was no express or implied-in-fact contract, Brown had full knowledge of the work, possessed an immediate opportunity to speak up and stop the crew, but silently retained the benefit. Retention without payment is unjust. Trap Variation: If Brown had been away on vacation in Europe and returned to find a freshly paved driveway, Brown would NOT be liable in quasi-contract. Brown had no knowledge of the work and no opportunity to refuse the benefit.