The impact of quantum meruit is to allow a promisee to recover the value of services he gives to the defendant irrespective of whether he would lose money on the contract and be unable to recover in a suit on the contract.
Defendant property owner and plaintiff real estate broker allegedly entered into an oral agreement to develop a parcel of land. Plaintiff real estate broker claimed that defendant agreed to pay him a commission on all sales of property or the reasonable value of the services of plaintiffs, real estate broker and real estate development company. Plaintiff invested considerable time and money in the development, but was not paid his commission. It was then discovered that the land could not be developed due to a problem with the mineral rights. Plaintiff then convinced defendant to buy another tract of land that plaintiff also agreed to develop and sell. Plaintiff developed and claimed to have leased this and was paid $100,000 for his services, but defendant then terminated their relationship for unsatisfactory performance. Plaintiffs maintained that they were discharged without having been fully compensated for their services. Plaintiffs filed an action for breach of contract, and fraud and deceit. Defendant denied the existence of a contract and plaintiffs amended their complaint to assert a quantum meruit cause of action. The district court directed a verdict for defendant on plaintiffs' fraud claim and entered a judgment on a jury verdict in favor of plaintiffs’ breach of contract and quantum meruit claims.
Are damages for breach of contract and recovery for quantum meruit mutually exclusive remedies?
One who renders a service or supplies work, labor, and materials under a contract with another, but who is wrongfully discharged or otherwise prevented from so fully performing as to earn the agreed compensation, may regard the contract as terminated and get judgment for the reasonable value of all that the defendant receives in performance of the contract. The impact of quantum meruit is to allow a promisee to recover the value of services he gives to the defendant irrespective of whether he would lose money on the contract and be unable to recover in a suit on the contract, but plaintiffs did not produce sufficient evidence of their services or the value thereof to support the jury verdict on the quantum meruit claims. Plaintiff's anticipated consulting and leasing fees based upon percentages of development costs and gross rents could not provide the sole basis for proving his damages. Since plaintiffs did not actually complete their work, they could not recover for the value they would be owed if they had completed. The court AFFIRMED the judgment in favor of the contract claims of plaintiffs, real estate broker and real estate development company, REVERSED the judgment in favor of plaintiffs' quantum meruit claims, and REMANDED the quantum meruit claims for a new trial.