Constructive Contract

Definition - What does Constructive Contract mean?

A constructive contract is a legal obligation between the parties involved in a dispute in the absence of a prior obligation between the parties. This prevents unjust enrichment. While a normal contract has different elements and requires the parties to be in agreement, a constructive contract has no such requirements and is usually invoked for restitution. A constructive contract is also known as a quasi contract.

Justipedia explains Constructive Contract

When the parties involved in a dispute don't have an obligation to each other, a court may create an obligation between the non-contracting parties to avoid injustice. Such an obligation is called a constructive contract.

For example, Mr. A knew that his neighbor, Mr. X, hired a painter to paint his house. However, the painter mistakenly painted Mr. A's house instead of Mr. X's house, but Mr. A remained quiet. In this case, a court may impose a constructive contract on Mr. A to pay the painter, even though Mr. A and the painter never had a contract between themselves.

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