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Civil Resource Manual

77. Quasi-Contractual Claims

The United States itself generally is immune from so-called "quasi-contract" claims. Quasi-contracts, also known as contracts "implied in law," "impose duties that are deemed to arise by operation of law, in order to prevent an injustice." Lumbermens Mut. Cas. Co. v. United States, 654 F.3d 1305, 1316 (Fed. Cir. 2011) (citing Hercules Inc. v. United States, 516 U.S. 417, 423 (1996) (additional citations omitted)). They can be contrasted with implied in fact contracts, which "are 'founded upon a meeting of the minds, which, although not embodied in an express contract, is inferred, as a fact, from conduct of the parties.'" Id. (citations omitted). The government's waiver of sovereign immunity extends only to implied in fact contracts, and does not permit claims upon contracts implied in law. Id.; 28 U.S.C. § 1491(a)(1) (Tucker Act waives sovereign immunity only as to claims based "upon any express or implied contract with the United States"); see also id. § 1346(a)(2).

However, the government can proceed against a defendant to recover monies illegally or improperly disbursed, including those disbursed on an erroneous understanding of facts, in a quasi-contractual suit for unjust enrichment. See, e.g., Mt. Sinai Hospital of Greater Miami v. Weinberger, 517 F.2d 329 (5th Cir. 1975); J.W. Bateson Co., Inc. v. United States, 308 F.2d 510, 514-515 (5th Cir. 1962); Kingman Water Co. v. United States, 253 F.2d 588 (9th Cir. 1958); United States v. Independent School District No. 1 of Okmulgee, OK, 209 F.2d 578 (10th Cir. 1954); United States v. Bentley, 107 F.2d 382 (2d Cir. 1939). Similarly, the United States may recover the value of government services provided under a mistake as to the recipient's eligibility for such services. United States v. Shanks, 384 F.2d 721 (10th Cir. 1967).

No statutory authority is necessary to sustain a suit for public monies which have been erroneously, wrongfully, or illegally disbursed. Fansteel Metallurgical Corp. v. United States, 145 Ct. Cl. 496, 500 (Ct. Cl. 1959); see also United States v. Wurts, 303 U.S. 414, 415 (1938) ("The Government by appropriate action can recover funds which its agents have wrongfully, erroneously, or illegally paid."); Johnson v. All-State Const., Inc., 329 F.3d 848, 852-53 (Fed. Cir. 2003) (the United States Court of Appeals for the Federal Circuit and its predecessor court "have repeatedly recognized the government's right of set-off," which "can be defeated only by explicit language"); Great Am. Ins. Co. v. United States, 492 F.2d 821, 826 (Ct. Cl. 1974) ("The Government's right to recover funds, from a person who received them by mistake and without right, is not barred unless Congress has 'clearly manifested its intention' to raise a statutory barrier" (quoting Wurts, 303 U.S. at 416)). The Government may recover erroneous overpayments through setoff without recourse to the procedures of the Contract Disputes Act. See Applied Cos. v. United States, 144 F.3d 1470, 1478 (Fed. Cir. 1998).

Under certain circumstances, a specified federal official may choose to waive the government's entitlement to recoup improper payments of: (1) government civilian pay, (2) pay and allowances for member and former members of the uniformed services, and (3) pay and allowances of members and former members of the National Guard under 5 U.S.C. § 5584, 10 U.S.C. § 2774, and 32 U.S.C. § 716, respectively, as interpreted in 4 C.F.R. § 91.1 et seq. Such statutes provide only for discretionary administrative relief and do not impose any legal limitation upon the right of the United States to seek recoupment. See United States v. Kelley, 192 F. Supp. 511, 513 (D. Mass. 1961).

[updated September 2013; cited in USAM 4-4.420]