Suing Without a Written Contract
Parties often do not have a written contract memorializing the terms of an agreement between them. Sometimes, parties forgo a written contract because of a long-standing relationship, and other times, parties simply do not have the time or resources to draft a written contract. Although there are certain instances in which failing to have a written contract will be fatal to a lawsuit, suing without a written contract is possible in a number of circumstances.
Contract Enforceability
It should first be noted that suing without a written contract is possible in the majority of circumstances, because most agreements can be legally enforced without signed written contracts. Indeed, only certain types of contracts need to be reduced to writing in order to be legally enforceable. The types of contracts that need to be in writing to be enforced vary by state. However, these contracts may include contracts involving land, contracts for the sale of goods over $500, contracts in consideration of marriage, contracts that cannot be completed in one year, and other similar types of agreements. Because the contracts that need to be in writing vary from state to state, it is important to speak with an experienced attorney who can provide guidance about when contracts need to be in writing to be enforced.
Quantum Meruit
Even if the parties do not have a written contract, quantum meruit may provide a recovery. This cause of action permits parties to recover that to which they are entitled for rendering services to others in certain circumstances. In order to prove quantum meruit, parties first generally need to prove that they performed services in good faith, meaning that it was at the request of another party and was not done maliciously. Next, parties need to prove that the services were accepted by the person to whom the services were rendered. Parties also need to show that there was an expectation of compensation for the service, which may be show through invoices, receipts, and other documentation. Lastly, parties need to show the reasonable value of the services, such as by introducing evidence of industry standards governing a service. Although proving these elements may be more rigorous that proving breach of contract, it is worth it to recover from a party who does not wish to pay for services rendered.
Unjust Enrichment
Unjust enrichment is similar to quantum meruit, but the cause of action is a little broader. This claim extends further than providing services and may come into play whenever a party has been conferred a benefit to the detriment of another. In order to prove unjust enrichment, a party must typically prove three elements. First, the party must prove that another party was enriched either monetarily or by being conferred some other kind of benefit. Next, a party must prove that this enrichment was to the detriment of another party, such as costing the other party money or resources. Lastly, the party must show that it would be against equity and good conscious to let the party keep the benefit that has been conferred. Individuals ordinarily cannot recover under both a breach of contract and unjust enrichment theory of recovery, but parties can sometimes plead both claims in case a recovery for breach of contract cannot be obtained.
Promissory estoppel
Promissory estoppel is another cause of action that often arises when suing without a written contract. The basic reasoning behind promissory estoppel is that if someone makes a promise to another, they should be held liable if they do not carry other their promise. In order to provide promissory estoppel, a party first needs to prove that a clear and unambiguous promise was made to another. Next, a party must show that there was reasonable and foreseeable reliance on the promise by the party that is suing. Lastly, it must be shown that an injury resulted from the reliance on the promise. Again, parties usually cannot recover for both breach of contract and promissory estoppel but individuals can plead both in case they are unable to fully recover on a breach of contract claim alone.
Fraud Claims
Fraud is another cause of action that may arise when suing without a written contract. Fraud usually requires a misrepresentation or another that was relied upon by another, which caused damages. There are several different causes of action that sound in fraud. There is intentional fraud and causes of action that are based on negligent misrepresentation, which are similar to fraud. In addition, there is fraud in inducing people to make agreements, and under certain circumstances, there can be consumer fraud as provided for by state law. In other situations, there can be equitable fraud which can permit parts to cancel a contract and be placed in a position as if a contract was never executed by a party. Fraud must often be pled with more particularity and fraud causes of action may have more requirements than other claims. However, fraud can be a powerful cause of action when suing without a written contract.
The Rothman Law Firm is experienced with all manner of lawsuits, including litigation that involves an unwritten agreement. If you are looking for an experienced New York and New Jersey lawyer to handle your lawsuit or other legal issue, please feel free to contact The Rothman Law Firm to request a free consultation.