July 2, 2019
by Bob Incollingo
First and foremost, a lawsuit for breach of contract requires the existence of a contract, which here means an agreement the courts will enforce. If you have a written contract signed by the other party, then you’re on your way. In most instances, an oral agreement will also support a breach of contract claim, but you risk typical proof problems regarding terms. In some cases, your claim for breach of an unwritten contract will fail, whether for illegality (like when you have an uncollected bill for home improvement) or because you did not do everything required of you (like when you have change orders that are unsigned despite what the contract requires).
Whatever the shortcomings in your facts, call your lawyer before you walk away from money. Quote me on that. You may be able to get paid for your work or materials if the circumstances warrant prevention of an injustice. In appropriate cases the judge will decide that the conduct of the parties implies an agreement, although it may not be the one you agreed to. Your case to collect will be for quantum meruit (the reasonable value of labor or services) or sometimes quantum valebant (the reasonable value of goods or equipment). More loosely, you may see claims called ‘unjust enrichment’ and ‘restitution,’ but these don’t mean exactly the same thing.
Quantum meruit is a cause of action for breach of an agreement implied by the facts which give rise to the claim. If the transfer was not a gift, the intention of the parties to make an exchange is presumed, and the law supplies the remaining terms. What terms? That in exchange for a workmanlike job, or merchantable goods, completed or delivered within a reasonable time, you were to be paid their reasonable value, that is, as much as you or they were worth.
Even if you can make a case for quantum meruit, your better course is to sue for breach of contract. Usual practice puts both counts in the complaint, recognizing that only one will go the distance to judgment. Why, if both quantum meruit and breach of contract get you paid, would you rather have one than the other, and why should you sue for both? Even though in the unusual case your work might be reasonably worth more than its contract price, you won’t get a judgment for the reasonable value if you have an express enforceable contract. If you agreed to take less, you’ll only get what you agreed. As a matter of law, quantum meruit drops away when you have a good contract action for damages.
That’s not a bad thing, because breach of contract is a comparatively simple and therefore less expensive case to make. As described above, the first thing you’ll need will be a contract the courts will enforce. You also need to allege (and prove) that the defendant breached the contract by not doing what she agreed to do, that you did what you agreed to do (or were excused by the defendant’s breach), and that as a result you suffered damages within the limits of what was envisioned when you made your deal. Damages in the standard case for breach by nonpayment are measured by the unpaid portion of the contract price. Introduce the contract into evidence, along with any change orders and payments made on account, and the balance due is established.
Contrast the simplicity of a contract claim with a case for quantum meruit. Here, the amount recovered will depend on expert opinion testimony to set the worth of the goods or services supplied. Depend on at least one defendant’s fact witness to announce that the goods or services were worth nothing at all. Some people got no couth.
A quantum meruit case will inevitably devolve into a battle of the experts on the issue of valuation, which is a risky proposition for both sides, and much more expensive to mount than presenting foundational testimony for a contract claim. If you have an expert, bet that the other side will have an expert as well. If you intend to testify as your own expert in a field where your experience or training qualifies you, bet that the other side’s expert has better qualifications than you do. Moreover, your opinion – even if admissible as expert testimony – will face the charge of implicit bias no less than the defendant, so before testifying to the value of your own services, consider well whether you are “cheaping out” against your better interests.
Moreover, reasonable value testimony is especially vulnerable to evidentiary attack, becoming fertile ground for motion practice in trial and on appeal. The principal objection will be that the valuation is a “net opinion” containing bare conclusions unsupported by factual evidence. The best way to head off a net opinion objection on valuation is to force your expert to itemize and source every cost item in the work, in his report. Your expert will not want to do this, and will resist. Your expert will instead want to show off her new estimating software, which may require you to get and present expert testimony supporting use of the software, which additional expert testimony you will not be able to get at any price – count on it. Prepare to sweat bullets in court, because if the net opinion charge sticks, your expert’s testimony will be ruled inadmissible, and goodbye quantum meruit.
So yes, without a contract you may be able to get paid for your work or materials if the circumstances warrant prevention of an injustice. If all possible, don’t put yourself in that position. Get a signed contract. Goodbye quantum meruit.
New Jersey construction lawyer Robert J. Incollingo is a Director of the Camden Business Association, and practices construction law, business law, and real estate law in Gloucester County, Burlington County, and Camden County, New Jersey from his office in Cherry Hill. More articles like this appear on RJILAW.com.