U.S. v. Algernon Blair, Inc.

Facts: Algernon Blair was in a contract with the U.S. government to build a military hospital. Algernon Blair subcontracted with Coastal Steel Erectors to do certain steel erection. After Coastal had completed 28% of the project, Blair refused to pay for crane rental that Coastal had employed.

Issue: May a subcontractor, who justifiably ceases work under a contract because of the prime contractor's breach, recover in quantum meruit the value of labor and equipment already furnished pursuant to the contract irrespective of whether he would have been entitled to recover in a suit on the contract?

Holding: Yes

Reasons: Reasonable value of performance is the measure of recovery for quantum meruit.

Judgment: Reversed (in favor of Coastal).