Business Contract

No Contract, No Problem: How to Recover What You Are Owed

Business relationships are typically governed by written or oral contracts. However, not all contracts are alike. Sometimes, the contract is not signed by all of the parties. Other times, the contract is missing key material terms. Generally, businesses and individuals assume that the entities they do business with will keep their word and pay them after services are performed.

What happens when the entity for whom you performed work refuses payment, contending that no contract exists? If there is in fact no legally enforceable contract, how do you recover the money you are owed?

Thankfully, the law has developed equitable remedies that will allow you to recover for the services you performed, even if no contract exists. Specifically, you may have a claim for either quantum meruit or unjust enrichment (or both). Both equitable principles assume that no contract exists between the parties. Quantum meruit is Latin for “what one has earned” and it stands for the equitable principle that an individual who performed non-gratuitous work should be entitled to the reasonable value of his or her services.  Similarly, unjust enrichment imposes an equitable obligation on someone who has received a benefit to the detriment of another, which includes compensating the party who incurred the detriment.

Asserting a claim based on either theory, however, would not entitle you to recover your attorneys’ fees.  This underscores the importance of having a written contract in place to ensure you receive the full value of the work you perform.

If you would like to schedule a consultation to discuss a contractual dispute, or if you need to update your existing contracts, please contact Roenan Patt at (312) 368-0100.