On a great many occasions, I’ve seen the two causes of action in the title, Unjust Enrichment and Quantum Meruit, spoken in the same breath, as if they are either one in the same or so closely related that they are interchangeable. This, however, is either a perpetuation of an incorrect association of the two from prior case law or a fundamental misunderstanding of these two very different concepts.
Recognizing when you have one or the other at issue is key to successfully pleading your claim, and knowing when Unjust Enrichment might be your only avenue to recovery, it is important to understand when it can be successfully proven and when you may be throwing good money after bad by bringing a claim.
Beginning with Unjust Enrichment, this claim arises by operation of equitable principles of fairness and has three required elements: (1) plaintiff conferred a benefit on defendant; (2) defendant knew of the benefit and should reasonably have expected to repay plaintiff; and (3) defendant accepted or retained the benefit without paying for its value.” Schmidt v. Household Fin. Corp., II, 276 Va. 108, 116, 661 S.E.2d 834 (2008).
Quantum Meruit is a Latin phrase meaning “as much as he has deserved,” and requires demonstration of the following type of scenario: “Where service is performed by one, at the instance and request of another, and … nothing is said between the parties as to compensation for such service, the law implies a contract, that the party who performs the service shall be paid a reasonable compensation therefor.” Mongold v. Woods, 278 Va. 196, 203, 677 S.E.2d 288 (2009).
While Unjust Enrichment is an equitable construct of the law, Quantum Meruit is based on the parties’ express intentional determination to contract with one another but disagreement over the price to be paid. The parties in an Unjust Enrichment scenario almost always did not intend to conduct a transaction with one another, whereas the parties to a Quantum Meruit scenario universally did. Quantum Meruit is the more straightforward of the two causes of action in which the party providing the goods or service to the other asks the court to fill in an important blank that the parties did not sufficiently address – the price term. Unjust enrichment is more complicated.
The Virginia Supreme Court has held that a plaintiff seeking recovery for Quantum Meruit is entitled to an award of damages amounting to the reasonable value of the work performed, less the compensation actually received for that work. T. Musgrove Constr. Co., Inc. v. Young, 298 Va. 480, 485, 840 S.E.2d 337, 340–41 (2020). This is objectively proven by offering evidence of what plaintiff ordinarily charges its other customers for the work performed for defendant and/or by evidence of what competing vendors in the vicinity charge for similar work.
On the other hand, a plaintiff seeking recovery for Unjust Enrichment is only permitted to recover to the extent that the defendant has benefited from the actions of the plaintiff. Id. This measure of damages is therefore a subjective one from the viewpoint of the defendant and cannot be proven solely by what the plaintiff or similarly situated vendors charge for the provided goods/services. Proving damages on an Unjust Enrichment claim can be difficult or even unachievable, despite the time, cost, and effort expended by the plaintiff providing the goods/services.
Here is a barely believable but illustrative example comparing the two principles. A woman owns three houses in adjacent neighborhoods. She contacts a painter to paint the exterior of each home, and painter agrees. The parties do not reach a price term on the jobs because the painter hasn’t seen the houses and does not want to box himself into a price until he does. The painter forgets to settle on the price with the woman before doing the work. The woman wants one house painted bright pink, another bright yellow, and the other a slate blue. The painter completes all three jobs. He paints the one house pink as instructed. Unfortunately, the painter got the addresses of the other two houses confused, painting yellow a house on Maple Dr. instead of the woman’s house on Maple Rd. and juxtaposing two numbers on the address of the third house he painted slate blue. All three houses were in sorry shape, with paint peeling, badly in need of his services, leading to some of his confusion. When the woman gave the painter the bad news that he had painted two out of three wrong houses, she became irate and refused to pay him. Where does that leave the painter?
First, he has a claim for Quantum Meruit against the woman for the one house of hers that he did manage to paint correctly. He is owed the value of his services for painting that house pink as she had requested.
Next, the painter approaches the owner of the house he painted slate blue. The owner had been away from his house the first day while his house was being painted, so at first it surprised him to see his partially painted house. But instead of coming forward, he kept silent about the painter’s mistake and let him finish the job. The house had needed a new coat of paint for years. That owner benefited from his house having been painted and has been unjustly enriched by it. He owes the painter an amount equal to that benefit.
Lastly, we have the owner of the house painted bright yellow. That owner (out of town the week the painter did the work) badly needed her house painted, but her section of the neighborhood is under restrictive covenants that disallow house paint in any color other than green. So, while the job was done in a workmanlike manner and cost the painter hundreds of dollars in paint and supplies, as well as four days of his time, he has no claim against her because she has not benefited from the services he provided. She still needs to paint her house.
In summary, of course, it is best to not place yourself in the above type of predicament by getting details straight and in writing from the outset, but sometimes things get overlooked. Quantum Meruit and Unjust Enrichment fact patterns present themselves most often in the context of the construction industry but operate in all types of commercial transactions to provide compensation when price terms are overlooked or can’t be agreed upon between contracting parties or when one party has obtained a benefit from the other without just compensation. Both claims have their applications but be aware of the difference between the two and recognize their limitations.