Small business owners often provide services or sell merchandise to their customers, and there's not always a formal contract involved. These products and services are the cornerstones of your business and if you start to run into problems with people who aren't paying for them, you may find it necessary to bring a lawsuit or try other ways to collect on the money you are owed. However, if you don't have a written contract, you may be concerned that you aren't going to be able to get paid. If you've been issuing invoices, you may be able to file a lawsuit based on an account stated.
On the other hand, if you or your business has been involved in a lawsuit relating to a contract, you may have encountered a claim for quantum meruit. It's a common term that lawyers deal with, but not one of those terms that non-lawyers encounter all that often. While a breach of contract lawsuit is a common thing for business owners to encounter, if the lawsuit also includes claims for quantum meruit, you may initially be concerned if you aren't sure what that term means.
It's often used in connection with other claims so that if the contract is found to be invalid on a summary judgment motion, there are still other claims that may allow the plaintiff to win the lawsuit. In this way, it's often a shock to clients who are convinced that they can win their lawsuit if the contract is found to be invalid to then find that a claim for quantum meruit can still keep the case going and possibly provide for the other party to recover money from them.
What is Quantum Meruit?
Quantum Meruit is a legal concept used in the context of contract law. It refers to the principle that a person who has performed services or provided materials in good faith is entitled to be compensated for the reasonable value of those services or materials, even if no contract was in place. The concept of quantum meruit is often used in situations where there was an implied agreement or a contract that was partially performed.
How Does It Work in a Lawsuit?
A quantum meruit lawsuit is a legal action brought by an individual or a company seeking compensation for services or materials provided to another party. In such a lawsuit, the plaintiff claims that they have performed valuable services or provided materials to the defendant and that they are entitled to be paid for their work. The defendant, on the other hand, may argue that they are not liable to pay the plaintiff because there was no formal agreement or contract in place.
Quantum meruit lawsuits are often brought in cases where the parties have an implicit agreement or where a contract was partially performed. For example, if a contractor begins work on a construction project but the project is later terminated, the contractor may be entitled to recover compensation for the work they have completed under the principle of quantum meruit. Similarly, if a supplier delivers goods to a customer but the customer fails to pay for the goods, the supplier may be entitled to recover the reasonable value of the goods under quantum meruit.
In order to succeed in a quantum meruit lawsuit, the plaintiff must prove that they have performed valuable services or provided materials to the defendant and that they did so in good faith. The plaintiff must also prove that they had a reasonable expectation of compensation for their work and that the defendant accepted the benefits of the services or materials provided. The defendant may argue that there was no agreement or that the plaintiff did not perform the services or provide the materials in good faith.
What if There Was No Contract?
The quantum meruit principle is an important aspect of contract law because it provides a means of resolving disputes between parties where a formal agreement was not in place or where the parties did not intend to enter into a formal agreement. The principle helps to ensure that individuals and companies are not taken advantage of in situations where they have performed valuable services or provided materials and that they are compensated for their work in a fair and reasonable manner.
In the end, quantum meruit lawsuits are legal actions brought by individuals or companies seeking compensation for services or materials provided to another party. The plaintiff must prove that they performed valuable services or provided materials in good faith and with a reasonable expectation of compensation, while the defendant may argue that there was no agreement or that the plaintiff did not perform the services or provide the materials in good faith. The quantum meruit principle is an important aspect of contract law that helps to ensure that individuals and companies are fairly compensated for their work in situations where a formal agreement was not in place or where the parties did not intend to enter into a formal agreement.
Do I Need a Business Attorney?
If your business needs help with a quantum meruit claim or has some questions about clauses or other provisions in your contracts, it's important that you talk to a business attorney. Let's schedule a Legal Strategy Session online or by calling my Edina, Minnesota office at (612) 294-6982 or my New York City office at (646) 847-3560. My office will be happy to find a convenient time for us to have a phone call to review the best options and next steps for you and your business.