One of the major functions of the law in business is protecting the rights of the parties. If one side to a contract doesn’t uphold their end of the bargain, contract law is there to provide a remedy to the side that did.
But what about when two parties agree to do something without forming a valid contract? Fortunately, the law covers this situation as well in the form of damages in quantum meruit.
What Is Quantum Meruit?
Quantum meruit is a latin phrase that literally means “the amount earned.” In the law, quantum meruit is a remedy available to a plaintiff who provides goods or services without a contract.
In most cases, the parties to a business transaction will agree to a contract covering the transaction. Consequently, the parties are bound to the terms and conditions expressly stated in the contract. If a party breaches the contract, then the other party can sue to obtain the appropriate remedy.
However, sometimes the contract is invalid or there is no contract at all. Quantum meruit is one way the law prevents the unjust enrichment of a non-paying party in these situations. This legal principle allows a plaintiff to recover damages “in quantum meruit” equal to the reasonable value of the services or materials provided, including interest and attorney fees.
For example, imagine that a property owner hires a builder to build a new warehouse. However, the parties do not form an express contract covering the project. When the new warehouse is complete, what happens if the property owner refuses to pay the builder? If the builder can prove the quantum meruit elements, then he can obtain compensation for the materials and service provided.
Elements of a Quantum Meruit Claim in Texas
To receive damages in quantum meruit, a plaintiff must prove that:
- The plaintiff provided a valuable service or materials;
- The services or materials were provided for the defendant;
- The defendant accepted the services or materials; and
- The defendant had reasonable notice of the plaintiff’s expectation of payment for the services or materials.
In Texas, quantum meruit is available only if there is no express contract covering the services or materials. However, in cases where a contract does exist, quantum meruit can still be used as an alternative if the validity of that existing contract is called into question.
In the example above, there was no contract between the parties. Additionally, the builder meets all four quantum meruit elements: the builder provided construction services and materials for the property owner; the property owner accepted them; and the property owner had reasonable notice that the builder expected payment for the construction. As a result, quantum meruit allows the builder to obtain reasonable payment for the construction of the new warehouse.
Do I Have a Quantum Meruit Claim?
Our builder example simplifies the concept to make it clear, but in practice, quantum meruit cases are rarely as clear. Whether you have a quantum meruit claim ultimately depends on whether your case satisfies the quantum meruit elements.
Our firm has more than 10 years of experience handling business disputes, and we can assess your case and advise you on your possible remedies. If you provided goods or services with an invalid contract or with no contract, we may be able to help you recover damages in quantum meruit.
Contact a Texas Business Law Attorney
The Curley Law Firm provides a wide range of litigation and business law services to Texas businesses. If you’ve provided services and the other party won’t pay, we can help. Contact us today for a free consultation.