Question. Can an Architect recover for services rendered where there is no written contract?
Answer. Maybe, depending on the proof offered.
Architect seeks to recover for statements rendered in connection with architectural design work Architect did on three projects. The only written contract executed by the parties relates to one of the three projects.
It is undisputed that Architect received payments for work he did on each of these projects and equally undisputed that Architect rendered statements that were not fully paid for each of these projects. Architect has asserted claims for breach of oral contract, quantum meruit, account stated, and unjust enrichment on the two projects where there was no written contract and a claim for breach of a written contract for the unpaid balance on the third project.
The Owner claims that the alleged oral contracts could not have been performed within one year and therefore are unenforceable. The Owner further claims that bills for the projects lacking a written agreement were submitted after the work was done, were protested, and greatly in excess of anything the Owner authorized and thus cannot be the predicate for an account stated claim. And, finally, Owner assert that Architect failed to complete the third project and was, in all events, fairly compensated for his work on the third project before he breached the written contract by failing to complete the contracted for work.
From here on in we will focus on the projects for which there was no written contract.
Architect has proof of substantial design work on the projects as well as statements for services rendered. Architect alleges that he was fully authorized to perform all of the work and that Owner never contested the propriety of any of the statements rendered. By contrast, Owner, alleges he had more than a half dozen in person meetings and telephone calls with Architect challenging the scope of the work, much of which was either, in Owner's view, unnecessary or untimely. While Owner acknowledged that he engaged Architect to perform work on all three projects, Owner asserted that the work Architect did was beyond the scope of anything Owner authorized and much of it was unnecessary, if not worthless.
The first issue is whether the oral contracts were capable of being performed within one year and thus are enforceable. New York General Obligations Law §5-701(a)(1) requires a writing for an agreement if such agreement "by its terms is not to be performed within one year from the making thereof…." It has been well-settled by the Court of Appeals of New York that §5-701(a)(1) applies to only those contracts which, by their terms, have absolutely no possibility in fact and law of full performance within one year. The determination of whether an alleged oral contract can possibly be performed within one year from its making is not conducted by looking back at the actual performance, but rather, requires analysis of what was possible, looking forward from the day the contract was entered into. Both projects contemplated multi-year schedules and phases and, looking forward from the time the oral agreements were originally entered into, were incapable of being performed within a year. Therefore, the oral contracts are unenforceable under the Statute of Frauds.
The second issue is whether Architect made a prima facie case that he was entitled to judgment for account stated for the projects. The Architect can make a prima facie case of entitlement to judgment as a matter of law for account stated by establishing that she entered into an agreement with the Owner and sent him regular invoices pursuant to that agreement, to which the Owner did not object. This is ultimately an issue of credibility.
The third issue is whether Architect sufficiently presented evidence supporting its claim for quantum meruit. The elements of quantum meruit are: (1) the performance of services in good faith, (2) the acceptance of services by the person to whom they are rendered, (3) the expectation of compensation therefor, and (4) the reasonable value of services rendered. Architect proved that his architectural services were performed and that he expected to be compensated for them. Manifestly, Architect did not work beyond the conceptual phase of both projects with the intent to deceive Owner. Architect believed that Owner's office authorized each phase of the projects Architect worked on. Furthermore, by submitting invoices to Owner, Architect clearly expected to be compensated for his architectural services and, indeed, received partial payment for his work.
There is evidence that subordinates of Owner accepted Architect' architectural services. Owner accepted Architect' architectural services for the conceptual phase of both projects since he compensated Architect for such work. But the Owner had numerous conversations with Architect objecting to the work beyond the initial phase.
In addition, Architect failed to provide evidence of the reasonable value of his architectural services beyond the statements he sent for the services he rendered. And, as previously noted, much of the work for which Architect seeks to recover was either unnecessary or of no ultimate value to the Owner.
Because the parties never entered into a written contract, the only evidence of rates presented was the unsigned proposal and Architect's testimony. And, Owner's expert witness disputed the standard industry rates for such projects. For all these reasons, Architect is entitled to no more than he was paid on a quantum meruit basis.