Alex Vigneault | Carroll Heyd Chown LLP
When I was a kid, my dad loved to throw around the saying “good paper makes good friends” – his misstatement of the popular phrase “good agreements make good friends”. Even though he threw this saying around to avoid having to buy me McDonald’s after doing my chores (as agreed), his point stood: putting expectations and agreements in writing prevents misunderstandings.
In the construction industry, though, reducing everything to writing just isn’t always possible or realistic. A lot of construction projects are ever evolving, with owners often wanting changes or additions on the fly, or contractors needing to substitute materials, suppliers, or subcontractors as things progress.
When disputes arise during or after a construction project – which they often do – those undocumented changes can become especially contentious. The owner insists “I never agreed to that,” the contractor insists “we did the work, we should be paid,” and suddenly everyone is wishing they’d put pen to paper.
Fortunately, the law has a couple of safety nets for situations where there’s no written agreement, or where work was performed outside the four corners of one. They’re called quantum meruit and unjust enrichment – and they are rendered most effective if you’ve kept your records straight.
Quantum meruit is Latin for “as much as is deserved.” It allows a contractor to recover the reasonable value of work done or materials supplied, even where the parties never agreed on a price, or where the agreed price doesn’t cover what was actually done. If you installed an extra window because the owner pointed at the framing and said “Let’s add one there,” and they’re now refusing to pay because there was no written change order, quantum meruit is the doctrine you would rely on.
Unjust enrichment is closely related. To succeed with an unjust enrichment claim in Ontario, you need to show three things:
(1) the other party was enriched (they received something of value);
(2) you suffered a corresponding deprivation (you paid for it, in labour, materials, or both;) and
(3) there is no “juristic reason” for the enrichment, meaning no contract, no gift, no statute explaining why they should keep the benefit without paying.
The problem, of course, is that you need to prove it.
Courts won’t simply take your word for it. To be paid for that extra window, you need to show:
- That you did the work: Daily site logs are ideal. A short, dated entry is likely going to be valued by a judge more than you trying to recall the work by memory three years from now, when the matter finally reaches trial.
- What it cost you: Documents to support costs could include material invoices, time sheets, equipment rental receipts. Keep them, label them, organize them by project.
- That the change was requested or accepted: A signed change order is the standard, but a text message, an email confirmation, or even a dated photo of the new framing can lend significant credibility to your claim.
- That you invoiced for it: Issue invoices promptly and itemize them. The ideal invoice (or a “proper invoice”) would break down the labour, materials, and scope of the additional work.
Is the above tedious? It absolutely can be. Very few people got into construction because they loved paperwork. However, keeping consistent records, as outlined above, can be the difference between getting paid for your extra work versus being out of pocket.
Quantum meruit and unjust enrichment are real remedies, and they can assist contractors left holding the bag. They do, though, require the contractor to build that paper trail: the contractor who walks into court with dated site logs, organized material invoices, and a paper trail of change requests will almost always do better than the one who walks in with a story.
In the end, my dad may have been onto something: good paper can make for good friends. At the very least, it makes for a stronger plaintiff.
Alex Vigneault has been with Carroll Heyd Chown LLP since 2014. He can be reached at (705) 722-4400 ext. 224 or by email at av********@***********rs.com.