MEMBER OF THE NATIONAL TRIAL LAWYERS
Claim for quantum meruit
A claim for “quantum meruit” (also referred to as “unjust enrichment”) is a fallback claim to a breach of contract claim where there was no contract between the parties but one party provided a valuable service or good to another party under the following circumstances.
First, at the time the service or goods were provided, the providing party must have expected payment. The law presumes that a person expects to be paid whenever he renders a service or delivers goods, unless he does so as a gift or in repayment or satisfaction of a debt or obligation.
Second, the providing party’s expectation of payment must have been reasonable. A person’s expectation of payment is reasonable when, under all the facts and circumstances existing at the time, a person of ordinary prudence and intelligence would have expected payment. All of the circumstances existing at the time, including the relationship between the parties, and their present or previous dealings, should be considered. Finally, the expectation of payment must have arisen at the time the service was rendered, or goods were provided, not thereafter.
Third, the other party received the service or good either knowing, or having reason to know, that the providing party expected to be paid. To “know” something requires actual knowledge of it. However, a person “has reason to know” something when the circumstances existing at the time are such that a reasonable person would have acquired knowledge of it.
Fourth, the receiving party voluntarily accepted the services or goods; in other words, he kept them after having a realistic opportunity to either refuse or return them.
Pursuant to a quantum meruit claim, the providing party is not entitled to recover the amount he thought he was going to receive, but is instead entitled to recover the reasonable value of the services or goods. Reasonable value is a flexible concept that depends upon the facts and circumstances of each case. In many instances, for example, reasonable value might be equivalent to fair market value. However, there are cases where there is no market for the good or service, such as where the good is custom crafted and unique or the service is one not normally performed for pay. In the latter case, the reasonable value will depend upon factors such as the time and labor expended, skill, knowledge, and experience involved, and other attendant circumstances. Finally, where compensation for improvements to land is sought, the measure of recovery is limited to the amount by which the value of the property has been enhanced by reason of the improvements.