Express contracts are a simple concept. An exchange of promises is made, either written or verbal. The terms are mutually declared and understood, and the agreement is legally enforceable. In comparing quantum meruit vs unjust enrichment, we’ll discuss situations that fall outside of this boundary.
Imagine this – I promise to pay you $20 to mow my lawn. You accept my offer and proceed to mow my lawn. Through this agreement we’ve formed a contract, and I’m legally bound to pay you $20.
But what if you decided to mow my lawn without asking me first? What if I ask you to mow my lawn, but we never agree on a price? I may be required to pay you a fair amount for your service, due to legal concepts like quantum meruit and unjust enrichment. The following in-depth guide will cover and compare these doctrines.
Quantum Meruit vs Unjust Enrichment: What’s the Difference?
The difference between quantum meruit and unjust enrichment is found in the legal elements. When comparing unjust enrichment vs quantum meruit, they are notably similar in that both are equitable remedies for unfair exchanges – but beyond that, the two are significantly different concepts.
Both theories are intended to prevent one party from taking advantage of another but differ in the reason for and measure of recovery. While unjust enrichment focuses on remedying exchanges in which one party benefits at another’s expense, quantum meruit focuses on fair compensation for work performed without a specific agreement on payment terms. Though often confused, each doctrine has its own purpose, elements, and defenses, which we’ll examine more thoroughly in the following sections.
What is Unjust Enrichment?
In Florida, unjust enrichment claims are based on one party unfairly benefiting or profiting at the expense of another. Cornell Law School’s Legal Information Institute defines unjust enrichment as a situation in which one party “confers a benefit upon,” or enriches, another party without “receiving the proper restitution required by law,” as is unjust.
This often occurs in contractual business agreements when one party fulfills the agreement, and the other does not. However, unjust enrichment may apply even if no actual or implied contract exists.
Unjust enrichment is a form of civil action in which the party who files the claim does so for the purpose of recovering civil damages or monetary restitution. The measure of damages is based on the benefit’s value to whom it was inequitably retained by.
It should be noted that unjust enrichment is distinctly different from a gift, when something is given to another party without any expectation of compensation. In this situation, the party receiving the gift has no legal responsibility to give anything in return.
What is Quantum Meruit?
Quantum meruit, Latin for “as much as deserved,” is a cause of action intended to allow a party to recover the reasonable value of goods or services provided, when compensation was expected but not provided. In contrast to unjust enrichment, quantum meruit damages are measured based on the fair market value of the goods or services, rather than the value to the defendant.
A party may bring a quantum meruit claim if a contract exists, but the parties did not agree on essential terms, or if the contract was terminated before one or more parties fulfilled their obligations, indicating a breach of contract.
However, like unjust enrichment, quantum meruit is applicable even if no explicit agreement exists. Instead, quantum meruit theory enables the enforcement of an implied promise – also called a “quasi contract,” or a “contract implied in law.” In ordinary circumstances, no party is bound by any promise to another party in the absence of a contract. Under the doctrine of quantum meruit, common law recognizes this as unfairness in certain situations, and therefore implies the existence of an enforceable contract.
In other words, quantum meruit may apply to any situation in which the conduct of the involved parties forms a relationship of a contractual nature.
Elements of Unjust Enrichment Claims in Florida
Under the doctrine of unjust enrichment, the burden of proof falls on the party bringing the claim. To recover damages, the plaintiff must successfully demonstrate that the defendant unfairly benefited at the plaintiff’s expense. In Florida, the three elements of unjust enrichment are as follows:
1. A Benefit Bestowed Upon the Defendant by the Plaintiff
The theory of unjust enrichment focuses on the value of the benefit conferred – that is, whether what was bestowed upon the recipient would be considered a benefit in their eyes. The plaintiff must prove value was received.
2. The Defendant’s Appreciation of the Benefit
Due to the unique measure of recovery, proving damages is subject to each defendant’s individual circumstances. The claimant must prove the defendant appreciated or knew of the benefit and was in fact “enriched” by it.
3. The Defendant’s Unfair Acceptance and Retention of the Benefit
Finally, the plaintiff must prove the defendant either requested the benefit or accepted the benefit voluntarily without coercion, and retention of said benefit was unfair without compensation.
Elements of Quantum Meruit Claims in Florida
A party may bring a quantum meruit claim if labor, materials, or services were provided in expectation of compensation, but no payment was provided. In Florida, in order to claim damages, the plaintiff must prove the following quantum meruit elements:
1. Benefit Rendered to the Defendant
First, the plaintiff must prove they provided a benefit to the defendant, and the defendant accepted, retained, or enjoyed said benefit.
2. Reasonable Value of Benefit
Second, the plaintiff must prove the benefit was of reasonable value to the defendant. Quantum meruit claims are based on fair compensation.
3. Reasonable Expectation of Payment
Third, the plaintiff must prove that in providing the benefit, the plaintiff reasonably expected to be paid by the defendant.
Affirmative Unjust Enrichment Defenses
On occasion, there are cases in which a claimant is prevented from receiving restitution for unjust enrichment. In such circumstances, consulting a law firm experienced in business law is critical. Some of the most common unjust enrichment defenses are:
Officiously Conferred Benefits
If the benefit was conferred officiously, it was provided voluntarily and was neither requested nor needed by the receiver. Courts have decided that it must obviously appear that the benefit was provided by mistake, fraud, coercion, or request. Otherwise, there is enrichment, but it is not considered unjust, and the claimant is not entitled to restitution.
Estoppel
Estoppel is a legal principle designed to block one party from being unjustly wronged by the inconsistencies of another party’s actions or words. It prevents said party from arguing something or asserting a right that contradicts what they said previously or agreed to by contract law.
Essentially, estoppel protects one party by holding another to their word or requiring them to adhere to their legal agreements. If the claimant was under statutory obligation to provide the benefit, estoppel can act as defense to the unjust enrichment claim.
Change of Position
The change of position defense aims to reduce a defendant’s liability under the reasoning that the defendant’s circumstances have changed because of the enrichment.
For example, imagine Party A mistakenly received a large sum of money as a dividend. Party A decides to use the funds to make costly improvements to their home, that they wouldn’t have been able to afford otherwise. Should they later be sued for restitution, they would be reasonably aggrieved. The improvements changed their circumstances, and assuming responsibility for the cost would be unfair. Spending the money caused the defendant a “change of position,” a defense that would deem restitution inequitable.
Affirmative Quantum Meruit Defenses
As with unjust enrichment, a claim for quantum meruit damages may arise that is undeserving of recovery, and many of the same defenses apply. One of the most common defenses to either unjust enrichment or quantum meruit claims falls under the doctrine of unclean hands.
Doctrine of Unclean Hands
Also known as the “dirty hands doctrine” or the “clean hands doctrine,” the doctrine of unclean hands is an equitable defense that blocks relief to a party who has partaken in inequitable behavior – including deceit, fraud, or bad faith.
An unclean hands defense must be directly tied to the plaintiff’s claim for equitable relief. It is not enough to show that the plaintiff did something bad, somewhere, sometime. Courts have specified that the “misconduct which brings the clean hands doctrine into operation must relate directly to the transaction concerning which the complaint is made.”
For example – Party A sues Party B for failure to pay the full amount for construction of an addition to their house. Party B proves that Party A had shown faked estimates from subcontractors to justify the original bid to Party B. Thus, Party A’s hands were unclean, and the courts rule in favor of Party B.
In short, those who seek restitution must come to court with clean hands, or the claim for quantum meruit relief may be denied under this doctrine.
Need Help with a Quantum Meruit Claim or an Unjust Enrichment Claim?
Transactions, contracts, and agreements can be complicated, especially when one party fails to fulfill their obligations. If you provided a benefit, service, or product, you are entitled to fair and equitable compensation, and have a right to fight for it. At Cueto Law Group, we are prepared to build your case and represent you in your claim for restitution. Contact us today to schedule your consultation.
