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Current Developments in the Commercial Divisions of the
New York State Courts by Schlam Stone & Dolan LLP
Posted: February 18, 2019

Even Though Home Improvement Contract Was Unenforceable for Failure to Provide Required Notice, Plaintiff Still Could Recover Value of Work Performed

On February 8, 2019, the Fourth Department issued a decision in Weiss v. Zellar Homes, Ltd., 2019 NY Slip Op. 01024, holding that even though a home improvement contract was unenforceable, the defendant still could recover the reasonable value of the work it performed, explaining:

We agree with plaintiffs on their appeal that Supreme Court erred in denying those parts of their motion seeking partial summary judgment dismissing Zellar defendants’ counterclaim for breach of contract and an order determining that the contract was unenforceable, and that Zellar defendants are limited to seeking recovery under quantum meruit. We therefore modify the order accordingly. In support of their motion, plaintiffs established that the contract at issue failed to comply with General Business Law § 771 inasmuch as it did not contain the following notice to the owner in clear and conspicuous bold face type: Any contractor, subcontractor, or materialman who provides home improvement goods or services pursuant to your home improvement contract and who is not paid may have a valid legal claim against your property known as a mechanic’s lien. In opposition, Zellar defendants failed to raise a triable issue of fact whether the contract complied with that section and, contrary to their contention, the failure to enter into a signed written home improvement contract in conformity with General Business Law § 771 bars recovery based upon breach of contract. Nevertheless, although the failure to strictly comply with the statute bars recovery under an oral or insufficiently detailed written home improvement contract, such failure does not preclude recovery for completed work under principles of quantum meruit.

(Internal quotations and citations omitted).

Quantum meruit is a claim to recover for work that was not done pursuant to a contract (or, as here, where the contract alleged was not enforceable). Contact Schlam Stone & Dolan partner John Lundin at jlundin@schlamstone.com if you or a client face a situation where there is a dispute over payment for work that was not covered by a contract.

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