Law School Case Brief
MidAmerican Distribution v. Clarification Tech., Inc. - 807 F. Supp. 2d 646 (E.D. Ky. 2011)
Under Kentucky law, to prove breach of contract, the complainant must establish three things: 1) existence of a contract; 2) breach of that contract; and 3) damages flowing from the breach of contract. Thus, to establish a breach of contract claim under Kentucky law, the plaintiff must show by clear and convincing evidence that an agreement existed between the parties. Of course, not every agreement or understanding rises to the level of a legally enforceable contract. Rather, a valid contract requires offer and acceptance, full and complete terms, and consideration.
For a plaintiff to prevail under unjust enrichment, it must establish three elements: (1) benefit conferred upon defendant at plaintiff's expense; (2) a resulting appreciation of benefit by defendant; and (3) inequitable retention of benefit without payment for its value. To recover under quantum meruit, a plaintiff must prove: (1) that valuable services were rendered, or materials furnished; (2) to the person from whom recovery is sought; (3) which services were accepted by that person, or at least were received by that person, or were rendered with the knowledge and consent of that person; and (4) under such circumstances as reasonably notified the person that the plaintiff expected to be paid by that person. The elements of the two claims are similar, but to prove quantum meruit, the plaintiff must establish that the defendant was sufficiently notified of the plaintiff's expectation of being paid.
A distributor filed suit against a manufacturer for breach of contract and unjust enrichment under Kentucky law and damages. The parties had entered into an agreement for the exclusive distribution rights of certain products but had never signed the agreement. The manufacturer filed a motion for summary judgment.
Should the court grant the motion for summary judgment?
The court granted the manufacturer's motion for summary judgment. It held that the distributor was not entitled to breach of contract damages from the manufacturer because, due to indefiniteness, there was no enforceable contract. Nor was it entitled to recover under either an unjust enrichment or quantum meruit theory under Kentucky law because the distributor incurred its expenses without any thought of direct cash compensation, but with a view to obtaining business through a hoped-for contract.
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