Are you curious about what an equitable basis or quantum merit is? Law can be very confusing. Contracts that are created by business lawyers are often not very user-friendly. This short article will teach you a bit about how to read a contract. Of course, it’s much better to hire a business lawyer instead.
An equitable basis simply means what is fair. If you make a claim on an equitable basis, it means you are asking a judge to pay you the amount of money that the judge thinks is fair. You might have signed a contract saying that you are going to raise money for someone. However, it was not clear how you were going to get paid. Therefore, you are unsure how much to ask for. You might ask the judge to award you in the amount of $50/hour. This is even though the agreement doesn’t set out that you would receive $50/hour.
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Equitable Basis In A Contract
Below is an example of how Equitable Basis Or Quantum Merit can come into play in litigation. All the names and details are changed.
The question of whether the “event” under the Agreement occurred, in this case, turns on the proper interpretation of the contract. Joe Smith Franchising Inc says the event triggering payment of the commission under this Agreement is simply Lucky Coffee entering into a new franchise agreement, regardless of whether Joe Smith Franchising Inc had any involvement whatsoever in bringing the new franchisee to Joe Smith Franchising Inc. For its part, Lucky Coffee argues that more is required under the Agreement: the event triggering payment to Joe Smith Franchising Inc is Lucky Coffee entering into a new franchise agreement with a franchisee referred to Lucky Coffee by Joe Smith Franchising Inc.
It is important to note that Joe Smith Franchising Inc makes no claim in this arbitration on an equitable or quantum meruit The claim is limited to a purely contractual claim. If Joe Smith Franchising Inc had advanced a claim in unjust enrichment or quantum meruit it would have had to establish that Joe Smith Franchising Inc was the “effective cause” of any of the new franchisees entering into franchise agreements: Noh v. Plaza 88 Developments et al. 2011 BCCA 461; Royal Pacific v. Cressey Projects 2016 BCSC 1971.
Equitable Basis In An Agreement
Further, Joe Smith Franchising Inc has not made any alternative claim that it is entitled to a commission for those franchise agreements that were entered into with a franchisee referred by Joe Smith Franchising. Indeed, there was no evidence before me to establish that Joe Smith was the effective cause of any of these new franchisees. Quite apart from the lack of evidence, the interpretation urged by Joe Smithrenders the extent of Joe Smith’s involvement irrelevant to its entitlement of 50% of the initial franchise fees.
What Is The Parties Position In The Contract?
Joe Smith repeatedly takes the position that the Agreement is clear. In its Statement of Case Joe Smith asserts that the Agreement captures:
“the intention of the parties that Joe Smith would be [Lucky Coffee’s] exclusive agent to expand [Lucky Coffee’] franchises throughout Canada and the US. This is enshrined in Item “E” of the Contract, wherein it states that Joe Smith would be entitled to the compensation for “all” new [Lucky Coffee] franchise locations.”
In my view, not all the terms of the Agreement are “extremely specific and clear”. If Joe Smith intends to use the Agreement as a form of precedent in the future, it may benefit from a review by experienced corporate counsel in order to achieve the certainty that Joe Smith asserts in this case.
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Author: Alistair Vigier is the CEO of ClearWay Law