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Quantum Meruit: Recovering on a Contract When There Is no Contract

When two parties enter into a contract for goods or services, the parties generally create a set of responsibilities to one another.

Each side is obligated to perform their part of the contract in exchange for the performance by the other side.

A contract that would be upheld by a court is called an enforceable contract.

You can have written or oral contracts, both of which are enforceable if the right conditions are met.

Breach of Contract and Quantum Meruit

If a contract is breached, the aggrieved party can sue for breach of contract.

However, in court, a dispute sometimes arises about whether or not there actually was a contract between the parties.

There is another theory of recovery for situations where the evidence does not establish a contract: quantum meruit.

Quantum Meruit — An Implied Contract

Quantum meruit is an equitable theory of recovery based on an implied contract. See Bashara v. Baptist Mem’l Hosp. Sys., 685 S.W.2d 307, 310 (Tex. 1985).

When circumstances surrounding a transaction are such that one party would be unjustly enriched by the conduct of the other, the party aggrieved may have a claim for quantum meruit.

The elements of a quantum meruit claim are the following:

  1. Valuable services or materials provided by plaintiff to the defendant
  2. Who accepted the services or materials
  3. Under such circumstances as would reasonably notify defendant that the plaintiff expect to be paid. Id.

Quantum meruit implies a contract in circumstances where the parties neglected to form one but equity nonetheless requires payment for beneficial services rendered and knowingly accepted.

(In re 166 S.W.3d 732, 740 (Tex. 2005).)

Collecting in a Case of Quantum Meruit

To justify a recovery in quantum meruit, the plaintiff must not only show that he has rendered a partial performance of value but must also show that the defendant has been unjustly enriched and the plaintiff would be unjustly penalized if the defendant were permitted to retain the benefits of the partial performance without paying anything in return.

(5A A. Corbin, Corbin on Contracts § 1122 (1964). Truly v. Austin, 744 S.W.2d 934, 938 (Tex. 1988).)

Limitations

There are limitations to a quantum meruit claim, however. One often alleged defense is the doctrine of unclean hands.

Recovery in quantum meruit is based on equity, and it is well settled that a party seeking an equitable remedy must do equity and come to court with clean hands. City of Wink v. Griffith Amusement Co., 129 Tex. 40, 100 S.W.2d 695, 702 (1936); Breaux v. Allied Bank of Texas, 699 S.W.2d 599, 604 (Tex. App. Houston [14th Dist.] 1985, writ ref’d n.r.e.).

Also, a plaintiff who seeks to recover the reasonable value of services rendered or materials supplied will be permitted to recover in quantum meruit only when there is no express contract covering those services or materials. Black Lake Pipe Line v. Union Construction Co., Inc., 538 S.W.2d 80, 86 (Tex. 1976); Lake v. Cravens, No. 02 11 00464 CV, 2015 Tex. App. LEXIS 11191, at *35 (App.—Fort Worth 2015).

When a valid, express contract covers the subject matter of the parties’ dispute, there can be no recovery under a quasi-contract. That is because parties should be bound by their express agreements.

When a valid agreement already addresses the matter, recovery under an equitable theory is generally inconsistent with the express agreement. Fortune Prod. Co. v. Conoco, Inc., 52 S.W.3d 671, 673 (Tex. 2000).

When a Contract Already Exists

There are instances when recovery in quantum meruit is permitted despite the existence of an express contract that covers the subject matter of the claim.

This is when a plaintiff has partially performed an express contract but, because of the defendant’s breach, the plaintiff is prevented from completing the contract. Coon v. Schoeneman, 476 S.W.2d 439 (Tex. Civ. App. Dallas 1972, writ ref’d n.r.e.); Beller v. De Lara, 565 S.W.2d 319 (Tex. Civ. App. San Antonio 1978, no writ). Truly v. Austin, 744 S.W.2d 934, 936 (Tex. 1988).

However, a claim does not fit within this type of quantum meruit when it is the Claimant who breached the contract. Truly v. Austin, 744 S.W.2d 934, 936 (Tex. 1988).

When parties to an agreement cannot prove the terms of the agreement, a claim for quantum meruit may substitute for a breach of contract claim so long as the facts support the specific elements of a claim and no exceptions apply.

Contact Us — We Can Help

Do you need to speak with a lawyer concerning breach of contract?

Do you feel you are in a case of quantum meruit where an implied contract was broken?

If so, contact the attorneys at Hayes, Berry, White, & Vanzant to set up a consultation — click here to contact us now.

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