Brief Fact Summary. Kirkland (Plaintiff) contracted to make repairs on Archbold’s (Defendant’s) home. After two months, Defendant stopped Plaintiff from doing further work, and Plaintiff sued for the difference between his expenses and the amount already paid by Plaintiff. The trial court found that Plaintiff defaulted on the contract and denied recovery, and the Court of Appeals of Ohio reversed.
Synopsis of Rule of Law. A plaintiff who has defaulted on a building contract may recover in quantum meruit for the value of work done, less the damages the default has caused to the other party.
The drastic rule of forfeiture against a defaulting contractor who has by his labor and materials materially enriched the estate of the other party, should, in natural justice, be afforded relief to the reasonable value of the work done, less whatever damage the other party has suffered.View Full Point of Law
Issue. Can a party in default nevertheless recover for part performance of the contract, even if he has not substantially performed?
Held. Yes. Even if a defaulting party has not substantially performed the contract, he may still incur hardship. Therefore, if the defaulting party has done work that has benefited the other party, he is entitled to recover the cost of labor and materials in quantum meruit, less damages caused by the default, unless: (1) no benefit has been conferred to the other party by the work; (2) the work done is not the work contracted for; or (3) he has abandoned the job.
Discussion. Contract law frowns on unjust enrichment. Under the theory of quantum meruit, a party is entitled to the value of the work he has performed for the benefit of another, even if he has defaulted on the entire contract.