A Contractor May Still Recover Monies Due For Work Performed Pursuant to an Unenforceable Contract

Construction going on in the city.

Despite what might appear to be the parties’ intentions, courts sometimes find contracts unenforceable.  Courts may find contracts unenforceable for any number of reasons including, but not limited to, the contract omitting a material term; the contract having vague or indeterminate terms; the contract violating the statute of frauds; the contract lacking consideration; and/or the contract not reflecting the understanding of both parties.  In those situations, a party that provides labor, materials, and/or services may still be entitled to receive payment for its work under the legal theories of unjust enrichment or quantum meruit.

“[U]njust enrichment and quantum meruit are alternative theories of restitution.”  Nation Elec. Contracting, LLC v. St. Dimitrie Romanian Orthodox Church, 144 Conn.App. 808, 814, 74 A.3d 474, 478 (Conn.App., 2013).  “Unjust enrichment applies whenever justice requires compensation to be given for property or services rendered under a contract, and no remedy is available by an action on the contract.”  Gagne v. Vaccaro, 255 Conn. 390, 401, 766 A.2d 416, 424 (Conn.,2001).  “Quantum meruit is the remedy available to a party when the trier of fact determines that an implied contract for services existed between the parties, and that, therefore, the plaintiff is entitled to the reasonable value of services rendered.”  Burns v. Koellmer, 11 Conn.App. 375, 383, 527 A.2d 1210, 1215 (Conn.App.,1987).  “Plaintiffs seeking recovery for unjust enrichment must prove (1) that the defendants were benefited, (2) that the defendants unjustly did not pay the plaintiffs for the benefits, and (3) that the failure of payment was to the plaintiffs’ detriment.”  Town of New Hartford v. Connecticut Resources Recovery Authority, 291 Conn. 433, 451-52, 970 A.2d 592, 609 (Conn.,2009).  Plaintiffs seeking recovery for quantum meruit must prove that the defendant “knowingly accept[ed] the services of the plaintiff and represent[ed] to her that she would be compensated in the future, [i.e., the plaintiff] impliedly promised to pay her for the services she rendered.”  Burns v. Koellmer, 11 Conn.App. 375, 383-84, 527 A.2d 1210, 1215 (Conn.App.,1987),  “In an unjust enrichment case, damages are ordinarily not the loss to the plaintiff, but the benefit to the defendant.”  Rent-A-PC, Inc. v. Rental Management, Inc., 96 Conn.App. 600, 606, 901 A.2d 720, 724 (Conn.App.,2006).  “The measure of damages in quantum meruit is the value of the services rendered.”  Shapero v. Mercede, 262 Conn. 1, 7, 808 A.2d 666, 670 (Conn.,2002).

In Connecticut, the terms “unjust enrichment” and “quantum meruit” are used broadly and, sometimes, interchangeably.  The important point to remember is that these causes of action allow a court to do justice where the parties may have failed to properly reduce their contract to writing or may have neglected to execute the written contract that they have exchanged.  In those instances, the contract price listed on the unenforceable contract may be considered evidence of the plaintiff’s damages.  In other words, the court will use the equitable remedies to provide a contractor with the exact same compensation to which he would had been entitled had the contract been enforceable, which – when you think about – is the only fair thing to do when the work has been properly performed.

These equitable remedies may also resolve the problems created by the relatively common practice of performing additional work without signed change orders despite the contract requiring same.  One Superior Court has said that “[a]lthough the lack of a remedy under the contract is a precondition for recovery based upon unjust enrichment, the existence of a contract, in itself, does not preclude equitable relief which is not inconsistent with the contract.”  Savitz v. 03 Pools & Technologies, Inc., 2009 WL 1663442 (Conn.Super.), 4 (Conn.Super.,2009).  Thus, the contractor that performs additional work without a signed change order may be able to recover the contract balance under a breach of contract theory and simultaneously recover the value of the additional work under an equitable remedy.

If for any reason your contract may be unenforceable, or if you have not been paid for additional work performed without a signed change order, then please give me a call.

Scott Orenstein
(203) 640-8825