Quantum Meruit and Unjust Enrichment
Quantum meruit is a cause of action used to an enforce an implied promise also called a “quasi contract” or a contract implied in law. Quantum meruit is a legal doctrine that in the absence of an express agreement, imposes legal liability on a contract that the law implies from facts where someone receives goods or services in a situation when a reasonable person receiving such goods or services would ordinarily expect to pay for them. In fact, the term “quantum meruit” means reasonable value.When is Quantum Meruit Used?
Quantum meruit is used as a measure of damages in at least three settings:
- An uncompleted express contract, where the express contract is terminated before reaching substantial completion.
- Where the parties have an express contract, but have left the definition of price unstated, thereby implying a reasonable price.
- Where there is an in an equitable remedy, such as restitution from a third party
The three elements necessary to maintain a cause of action for quantum meruit are:
- The requested performance of labor, materials, or services
- The reasonable value thereof
- Nonpayment of the reasonable value
It is important to remember that the measure of damages recoverable in quantum meruit is not the value of the work to the defendant, but is the reasonable value of what was performed in the marketplace.
Quantum Meruit and Unjust Enrichment share similarities with each other as they are both equitable remedies but they consist of different legal elements.What is Unjust Enrichment?
In Florida, a claim for unjust enrichment is an equitable claim based on a legal fiction which implies a contract as a matter of law even though the parties to such an implied contract never indicated by deed or word that an agreement existed between them. The three elements necessary to maintain a cause of action for unjust enrichment are:
- A benefit conferred upon the defendant by the plaintiff
- Appreciation by the defendant of such benefit
- Acceptance and retention of the benefit such that it would be inequitable for the defendant to retain it without paying the value thereof
Under Florida law, a party may simultaneously allege the existence of an oral contract and seek equitable relief under the theory of unjust enrichment. The quantum meruit, or reasonable value, measure of damages applies to an implied in fact contract or an implied in law contract, which is not a contract at all. The form of agreement (express, implied in fact, or fictional agreement in the case of an implied in law contract) should be pleaded.Illustrations of Unjust Enrichment Claims:
Illustration 1: An unjust enrichment claim was recognized against a landlord pursuant to an agreement to improve the leased premises between a tenant and a contractor. The landlord was able to use the contractor's work in leasing the premises to a different tenant after the tenant contracting for the work went bankrupt.
Illustration 2: A health care provider's complaint against a third-party administrator of a group health insurance program, which had subcontracted with a managed care company for which the provider was a network provider, sufficiently stated a cause of action for unjust enrichment so as to avoid dismissal on pleading grounds, where the provider alleged that the administrator was aware of the contract between the provider and the managed care company, that the contract required the provider to give discounts on receipt of timely payment for services, and that the administrator failed to make timely payments, but did not make undiscounted payments, either, which resulted in economic benefit to the administrator.Statute of Limitations
A cause of action in unjust enrichment or quantum meruit have a four-year statute of limitations. It accrues after the last element of the cause of action occurs.Conclusion
Before a court grant relief on an unjust enrichment or quantum meruit claim under Florida law, a court must examine the particular circumstances of an individual case and assure itself that, without a remedy, inequity will result or persist. The plaintiff must also show that he or she has exhausted all legal remedies against any other party.Have You Been Sued or are You Owed Money?
If you have been sued for unjust enrichment or quantum meruit or if you are owed money, contact Miami business attorney Andrew J. Pascale to evaluate your case and protect your legal rights.