When it comes to legal contracts, there are many different types that can be used to govern business transactions or other agreements. Two of the most common types of contracts are contingent contracts and quasi contracts. While both types of agreements can be used to establish legal obligations, there are some key differences between them that make each one suitable for certain situations.
A contingent contract is a type of contract in which the performance of one or both parties is dependent on the occurrence of a particular event. For example, if a company agrees to pay a bonus to an employee only if the company reaches a certain level of sales, that would be considered a contingent contract. The performance of the employee (reaching the sales goal) is contingent upon the occurrence of the event (the company reaching the sales goal).
A quasi contract, on the other hand, is a type of contract that is created by a court to prevent one party from unjustly benefiting from another party`s actions. Quasi contracts are not based on the explicit agreement or intention of the parties involved, but rather on a sense of fairness and equity. For example, if a contractor mistakenly builds a new addition to a homeowner`s property thinking that they had been hired to do so, the court may create a quasi contract to require the homeowner to pay for the work done, even though they did not explicitly agree to do so.
The key difference between these two types of contracts is that a contingent contract is created by the explicit agreement of the parties involved, while a quasi contract is created by the court to prevent injustice. Contingent contracts can be used to create legal obligations that are tied to specific events, while quasi contracts are used to prevent one party from benefitting at the expense of another party.
Overall, both contingent contracts and quasi contracts play an important role in the legal landscape, providing a framework for businesses and individuals to establish obligations and prevent injustice. Understanding the differences between these types of contracts can help individuals and businesses make smart decisions when entering into legal agreements.