February 2014

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By Kevin T. White, Associate Attorney


Most people can explain the legal theory of breach of contract.  It occurs when you have an agreement with another person to do something, and the other person fails to do it, giving rise to a cause of action.  For most of our clients, that “something” is the failure to repay money.    

To prevail on a breach of contract theory, the party alleging breach must show that an offer was made, that the other party agreed to accept that offer, and that the parties agreed to be mutually bound by their promises.[i]   Traditionally, the creditor could prove all of those elements by providing copies of the credit application, the terms and conditions governing the account, and all of the monthly billing statements. 

There are theories of recovery that serve as alternatives to the traditional “breach of contract” theory when some, or all, of the aforementioned documents are unavailable.  Examples of such theories include account stated, unjust enrichment, and quantum meruit.

Account Stated

The theory of account stated can be used when a creditor has some, but not all, of the statements for an account.  This theory holds that an agreement to repay a balance between a debtor and creditor arises when the items of transactions are stated in a statement rendered and the statement is retained by the debtor without making an objection within a reasonable time.[ii]  Additionally, an account stated arises when partial payment is made on an account.[iii]

Put simply, if the creditor sends you a series of bills, itemizing the amounts owed, and you either: A) fail to object to it; or B) make a partial payment, it is assumed that you acquiesce to the balance the creditor lists on the statements provided. 

Unjust Enrichment

The concept of unjust enrichment is simple.  It is not based on a premise that one person promised to repay another, but rather that the circumstances at issue create a duty to make restitution for the benefits received. [iv]  To put it another way, the court requires a party to repay the credit extended because it would be unjust to allow the party to retain the value of the goods obtained without paying for them. 

Quantum Meruit

While many of our clients extend credit that was not repaid to them, many others perform professional services that go unpaid.  Fortunately, quantum meruit is an equitable theory of recovery similar to unjust enrichment, but instead of requiring a party to pay for the value of the goods received, the party is made to pay for the value of the services rendered to him or her.[v] 

To recover on a theory of quantum meruit, the plaintiff must prove that the defendant requested the plaintiff to perform the services, the services were performed, and the services were valuable to the defendant.[vi]  Most often, this occurs when a doctor, expert witness, attorney, accountant, etc. provides his or her services but the defendant later refuses to pay. 


The advent of technology has changed the way people apply for credit accounts and services.  Where there used to be a paper application, there may only be a phone recording or an internet record.  Additionally, while statements used to be mailed, they are often emailed or otherwise made available on the internet.

While technology undeniably increases the potential to expand a business, it also creates problems when a file is lost, a hard drive or server is corrupted, or records are lost.  Fortunately, the above theories of recovery provide an ability for creditors and service providers to recover the amounts owed to them, even if some or all of those records are lost. 

[i] Smith v. Firstar Bank Eau Claire, 230 Wis. 2d 748 (1999).

[ii] Stan’s Lumber, Inc., v. Fleming, 196 Wis. 2d 554 (Ct. App. 1995). 

[iii] Id. at 556.

[iv] Lawlis v. Thompson, 137 Wis. 2d 490 (1987).

[v] Id.

[vi] Id. at 185.

Posted: 2/10/2014 3:02:12 PM by Tom Connor | with 0 comments