Small business claims absent a contract

Question

What legal recourse does company have against a client for compensation when it performs work for the client without a contract, given that the company has documentation of provided services, along with multiple witnesses?

Answer 1

The answer is: it depends. Sorry, but that's just the way it is.

First of all, it depends on whether there actually was a contract. Under the law, a contract does not need to be something written down and signed. If you have this conversation with someone:

"Hey, can you do [this job] for me?"

"Sure, it'll run you about [cost]."

"Great."

You have a contract, which may well be legally binding and enforceable in court.

Even if, for whatever reason, there was no contract--for instance, the person you talked to didn't actually work for the company s/he said s/he did--there are legal doctrines that could give you some rights. They have names, depending on the jurisdiction and the facts, like "quantum meruit," "unjust enrichment," and "implied contract."

These doctrines all say, basically, the same thing: if you didn't have a contract for some reason, but you still gave someone something of value, reasonably expecting to be paid, then they have to pay you.

Whether these doctrines apply is going to depend on the facts of the specific case. For example, you can't paint someone's house secretly in the middle of the night without being asked, then demand payment. But if you're a painting contractor, he asks you to paint it, and he sees you painting it every day for a week, at the end of the week he can't say, "I never signed anything, so I don't have to pay you anything."

If this situation applies to you, your best bet is to discuss it with a lawyer licensed to practice in your jurisdiction.

Answer 2

Most contracts do not have to be in writing. A verbal contract is just as enforceable as a written one. Of course, when a dispute arises it becomes a little bit harder to determine the terms of the contract or even if there is a contract; which of course leads to the saying that "A verbal contract is worth the paper its written on".

That said, in some jurisdictions there are some contracts that are required to be in writing. What happens if they are not depends on the law that makes that requirement.

I have no knowledge of examples from Florida but from New South Wales:

• A contract for the sale of land must be in writing; if it isn't then there is no contract
• A contract for residential building works worth over $12,000 must be in writing; if it isn't the contract is not binding on the owner (i.e. they do not have to pay), however, it is binding on the builder (i.e. they have to perform the work).