There are those that think they have you beat. Perhaps your customer had no intention of paying in part or in whole and purposely did not sign the contract. You ask for payment and they remind you that you do not have a signed agreement and perhaps invite suit! Don’t worry, even without a signed agreement you can get payment for the work done.
It’s ideal to have a signed agreement. Despite technology and all the conveniences, in some business transactions, it isn’t always possible. Whether deliberate or not, there are those clients who get around signing a contract.
Many clients believe they cannot recover monies owed because they did not secure a signed, written agreement or additional written requests for work. For those customers who may have purposely engaged you with the intent not to pay, they will claim that you cannot collect because you do not have a signed written agreement. Not true.
Understanding the nature and reality of business, the law has provided for one party to recover for services rendered even without a signed agreement.
Collecting Without A Signed Contract
We can reconstruct an agreement in a way to show that the contract binds the parties and that they wanted a binding contract. Except for a signature or written agreement, the parties have agreed on all of the terms necessary for a valid contract. The facts state there is an agreement and supports the existence of a valid contract. That is a contract implied in fact.
(Definition of Contract Implied in Fact: A contract between two parties when there is no intent to enter into a contract is illustrated by the way the parties behave. Their language, actions, or other behavior shows the intent to enter into a contract.)
Other times it may be most difficult to prove the elements of a valid agreement. The facts might not support it. For those times when the service provider rendered a service and the customer or client received a benefit, the court recognizes that there should be payment for the services.
The claim is truly one of unjust enrichment because your non-paying customer benefitted from your work or services. Benefitting without paying for the services would be an unfair advantage. The court creates a “contract” of sorts, a quasi-contract.
(Definition of Quasi-Contract: An obligation imposed by law to prevent unjust enrichment. A contract implied in law or a constructive contract are other names for this contract. A court can presume a quasi-contract existed in the absence of a true contract. A court cannot make the same presumption where a contract—either express or implied in fact—covering the same subject matter already exists.)
It’s Only Fair
It doesn’t matter whether the agreement is for professional or non-professional services. It is also inconsequential whether it’s a quasi-contract or one implied in fact. Payment for the services rendered should be made to the service provider. It is a matter of fairness. The creditor will have to piece together a contract in fact or proceed on a quasi-contract theory. That piecing together of a contract will determine the amount paid.
If you are looking to collect and you don’t have a written agreement, get in touch with us to review your case and explore collection opportunities.