A contract is an agreement that the law will enforce. It therefore follows that although all contracts are agreements, not all agreements are contracts. Every type of contract falls within one of two categories: unilateral or bilateral, with the distinction being how the contract is formed. Closely related to these two categories is the quasi-contract, which is an equitable remedy a court can use to avoid injustice where a contract did not exist but one party conferred some benefit onto the other party.
Unilateral Contracts
A unilateral contract is one in which the offeror, meaning the party who made the offer, requests performance rather than a return promise. In other words, the party making the offer wants the other party to actually do something, rather than just promise to do something. Therefore, a unilateral contract is formed only once the party to whom the offer has been made actually does what the offering party asked for.
For example, A says to B, "I'll pay you $1,000 if you cross the Brooklyn Bridge by April 1." B crosses the bridge on time. As soon as B crosses, a contract is formed. If B had merely promised A that B would cross the bridge, no contract would be formed because A offered to pay B only if B actually crossed the bridge.
Bilateral Contracts
Unlike a unilateral contract, where the contract is formed upon complete performance, a bilateral contract consists of the exchange of mutual promises. In other words, this is a promise exchanged for a promise, in which each party is both a promisor and a promisee. Bilateral contracts are the most common type of contract.
For example, where A promises to sell Blackacre to B for $100,000, and B promises to buy Blackacre at that price. Unlike unilateral contracts, the mere giving of a return promise is all that is needed to constitute an acceptance.
Quasi-Contracts (Implied-by-Law)
Despite its name, a quasi-contract is actually not a contract at all. A quasi-contract is an equitable device used by courts to avoid unfairness by allowing the plaintiff to sue to recover the value of the benefit he gave to the other party. To compensate for such unfairness, the law implies a promise by the defendant to pay the reasonable value of the benefit which has been conferred on him by the plaintiff. To recover under a quasi-contractual theory, the plaintiff, referred to as A, must show: (1) A has rendered services or expended property which confers a benefit on B, (2) A rendered such performance with the expectation of being paid by B, and (3) to allow B to retain the benefits without paying A would result in unfairness of B at A's expense.
For example, consider an injured person who has been rendered unconscious. A medical professional renders aid to the unconscious person. Under a quasi-contractual theory, the court will imply a promise by the injury person to pat for the value of the treatment received.
Quasi-contracts are sometimes used by a party who has partly performed a bilateral contract, but then later breaches that contract. For example, A is in breach of a contract with B, having preformed in part and then breached the contract (as in a contract for the delivery of goods, where only part of the goods have been delivered). A cannot sue in contract for damages because A is in breach; but A can sue in quasi-contract for the value of the part performance (the delivered goods). However, B can offset any damages B has suffered from A's breach of the contract.
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