There are a number of different remedies to a breach of contract. These remedies may take the form of compensatory damages, when a business owner receives compensation for the loss incurred because the other party breached the contract, or punitive damages, which are meant to punish a party. In Texas, a party seeking punitive damages must demonstrate by clear and convincing evidence that the loss suffered was caused by fraud, gross negligence, or malice. In some contract cases, however, disputing parties may opt to pursue, either as a primary means of recovery or as an alternative to compensatory damages, another form of damages known as quantum meruit.
According to FindLaw, quantum meruit is a Latin phrase that translates into “as much as he deserved.” In some cases, a contractor or business is contracted to perform a job or service, but the other party breaches the contract and calls a halt to the work. When two parties decide to settle this kind of contract breach with a quantum meruit, or if a court decides a quantum meruit is appropriate, the party that performed the work receives compensation for the work performed up to the breach of contract.
Quantum meruit can be helpful in handling some contract disputes, but the formula does not work in all situations. According to the Business Dictionary, some contracts stipulate that a task is to be performed completely without interruption. It may not be possible to place a monetary value upon a task unless it is fully finished, which means compensation for partially completed work is not possible. The same standard can apply to orders of material products that are not completed at the time a contract is breached.
Consultation with a professional business litigation attorney is essential to know whether a quantum meruit solution may be the right approach for your dispute. Your contract may describe alternate means of resolution, or the nature of your unfinished task may not allow for a quantum meruit to be implemented. All of these possibilities will be part of the considerations as you navigate your contract dispute.