Quantum Meruit

QUANTUM MERUIT

[Latin, As much as is deserved.] In the law of contracts, a doctrine by which the law infers a promise to pay a reasonable amount for labor and materials furnished, even in the absence of a specific legally enforceable agreement between the parties.

A party who performs a valuable service for another party usually enters into a written contract or agreement before performing the service, particularly when the party is in the business of performing that service. For instance, most professional roofers hired to repair a roof insist on having a formal agreement with the owner of the house before beginning the repairs. In the absence of an agreement or formal contract, the roofer may be unable to recover losses in court if the transaction goes awry. Quantum meruit is a judicial doctrine that allows a party to recover losses in the absence of an agreement or binding contract.

By allowing the recovery of the value of labor and materials, quantum meruit prevents the unjust enrichment of the other party. A person would be unjustly enriched if she received a benefit and did not pay for it when fairness required that payment be made. Quantum meruit can be used to address situations where no contract exists or where a contract exists but for some reason is unenforceable. In such cases courts imply a contract to avoid an unjust result. Such contracts are called quasi contracts.

Quantum meruit also describes a method used to determine the exact amount owed to a person. A court may measure this amount either by determining how much the defendant has benefited from the transaction or by determining how much the plaintiff has expended in materials and services.

The doctrine of quantum meruit was developed in the seventeenth century by the royal Court of Chancery in England. This court worked apart from the common-law courts to grant relief that was due under general principles of fairness but could not be obtained under the strict legal precedents of the common-law courts. The system of basing decisions on basic principles of fairness became known as equity. The Chancery Court developed quantum meruit along with other equitable doctrines that allowed a person to recover or collect for other valuable acts performed without a contract, such as the delivery of goods or money. Some of the first cases of quantum meruit involved recovery by persons in so-called trades of common calling, such as innkeepers, tailors, blacksmiths, and tanners.

As service industries increased, so did claims for recovery under quantum meruit, and the doctrine was adopted by colonial courts. U.S. courts now apply quantum meruit principles in a wide variety of cases, including cases involving attorneys' fees, physicians' fees, construction work, government contracts, and even domestic relations suits for "palimony." Palimony is a form of financial support that is similar to alimony but arises out of a nonmarital relationship.

Courts have crafted four basic elements that the plaintiff must prove before she may recover under the doctrine of quantum meruit: (1) that valuable services were rendered; (2) that the services were rendered to the defendant; (3) that the services were accepted, used, and enjoyed by the defendant; and (4) that the defendant was aware that the plaintiff, in performing the services, expected to be paid by the defendant.

The case of Montes v. Naismith and Trevino Construction Co., 459 S.W.2d 691 (Tex. Civ. App. 1970), illustrates how quantum meruit works. In August 1968 Abraham Montes began oral negotiations with Abdon Perez regarding improvements Montes sought for his homestead. Perez testified that Montes brought a contract to him more than once, but that the contract was never complete, and no contract was ever signed. Despite the lack of a contract, Perez arranged for the Naismith and Trevino Construction Company to do the work on Montes's house. Montes paid $1,800 to Perez, and Perez withdrew from the transaction.

Naismith and Trevino made improvements on Montes's homestead for a total value of $3,835.36, but Montes refused to pay for the improvements. Naismith and Trevino brought suit against Montes, arguing that even though they did not have a contract with Montes, they should be paid for their labor and the materials they used in making improvements to his house. The court agreed and entered judgment for Naismith and Trevino in the amount of $1,760, the amount of the services and materials provided by Naismith and Trevino less the amount Montes had paid to Perez. The court based its ruling on the theory of quantum meruit.

The doctrine of quantum meruit is contained in court decisions and, to a lesser extent, in statutes. It can be a confusing doctrine: many courts mix quantum meruit with the similar principles of restitution and unjust enrichment. Restitution is a broad term that describes measures taken by a civil or criminal defendant to restore a victim to the status that he enjoyed before the defendant caused a loss or injury. Unjust enrichment is an equitable approach to civil relationships that covers more than just contractual situations. A civil plaintiff may recover under the doctrine of unjust enrichment by showing (1) that the plaintiff conferred a benefit on the defendant; (2) that the defendant appreciated or knew of the benefit; and (3) that, under the circumstances, it was unfair for the defendant to accept or retain the benefit without paying for it. Most courts consider quantum meruit a particular form of legal restitution that follows the basic restitutionary principle of preventing unjust enrichment.

further readings

Rendleman, Doug. 2001. "Quantum Meruit for the Subcontractor: Has Restitution Jumped Off Dawson's Deck?" Texas Law Review 79 (June).

Sloan, Judy Beckner. 1992. "Quantum Meruit: Residual Equity in Law." DePaul Law Review 42 (fall).

Smith, Laura A. 1997. "The Louisiana Supreme Court Modifies the Quantum Meruit Test Used to Allocate Fees to Attorneys Fired for Cause from Contingency Fee Agreements." Tulane Law Review 71 (June).