Meaning
Equitable assessments of what a specific task or role is worth provide a basis for compensation when no formal contract exists. Determining the reasonable value of services involves looking at the market price for similar work performed under similar conditions. This standard governs restitution claims and quantum meruit disputes, stopping where a written agreement explicitly sets the price.
Quantum Meruit
Providing a benefit to a company without a clear salary agreement creates a right to be paid fairly. The reasonable value of services prevents a firm from receiving a windfall at the expense of an uncontracted founder. This claim arises most often after a sudden departure where the contribution of the individual was never formally priced.
Valuation Method
Calculating the amount owed requires a comparison to industry standards for the period in question. Experts look at the hours worked and the specialized knowledge required to deliver the result. The reasonable value of services is not based on the subjective feelings of the worker but on the objective cost of hiring a professional to do the same job.
This calculation excludes any emotional value or future potential that was not part of the actual work delivered.
Proof Obligation
Success in a claim for payment depends on the quality of the records kept during the period of service. If a founder cannot show the hours or the output, the reasonable value of services is impossible to calculate. The burden falls on the claimant to prove that the company accepted the work and benefited from it.
