There’s nothing more important, prior to starting construction on projects both large and small, than agreeing to and signing a robust, well-negotiated contract. The contract should expressly lay out the scope of work expected of the party furnishing services or materials, the payment schedules to be satisfied by the project owner, and the general timeline for the project’s completion.
What if an individual or company furnishes services or materials to another party without a contract in place? There’s a chance that no disputes arise, but the potential is much greater in the absence of an express contract. So, is the party that furnished services or materials out of luck if the other party refuses to pay for what it received? Not necessarily, thanks to the legal theory of “quantum meruit” embraced by Texas courts. As we’ll discuss in this blog, parties may be able to recover damages under quantum meruit even if an express contract existed.
What is Quantum Meruit?
Simply put, quantum meruit is a cause of action that holds bad actors accountable and prevents them from being unjustly enriched. This comes into play where a party either performs a service for another party or provides goods to the other party. The implication is that the other party would provide some form of compensation in this implied contract.
Four conditions must exist for a quantum meruit claim in Texas:
- The party asserting quantum meruit (the plaintiff) provided goods or services.
- The defendant was the recipient of the goods or services.
- The goods or services were accepted by the defendant.
- The defendant was reasonably aware that the plaintiff expected compensation.
Even if the plaintiff is successful, though, he or she is limited when it comes to recovering damages. Generally, quantum meruit limits plaintiffs to recouping attorney’s fees, interest, and the “reasonable” value of the services or materials they provided to the defendants.
Quantum Meruit in Express Contracts
There are three exceptions to the state’s rule that an express contract bars quantum meruit recovery:
- The plaintiff partially performed under the express contract but, due to the defendant’s actions, the contract was breached and the plaintiff could not complete the work.
- The plaintiff partially performs under an express unilateral contract.
- The plaintiff is limited to recovering the reasonable value of the services or materials furnished (less any damages suffered by the defendant) as long as the defendant retains the benefits provided by the plaintiff.
Capshaw & Associates Can Resolve Your Breach of Contract
Our legal team, with their decades of combined experience, are well-equipped to efficiently bring a solution to your contractual dispute with one or more other parties. We are adept at executing creative legal strategies in order to help achieve our clients’ goals and objectives.
We want to hear about your company’s legal disputes so we can put you on the right path. You can get in touch with Capshaw & Associates by calling us at 214-761-6610; we are currently offering complimentary case evaluations to prospective clients.