QUANTUM MERUIT MEANING

Quantum Meruit is a Latin phrase related to Indian Contract Act, 1872 which means “what one has earned” or “as much as he has earned”. Quantum meruit means a demand for a justifiable sum in relation to services or commodities provided to the defendant. Thus, the law of quantum meruit means a promise to pay a reasonable fee for the labour and materials provided even if there is no explicit contract.

For a layman’s understanding, quantum meruit means nothing but equitable remuneration. It is a different type of remedy from a lawsuit that can be filed for a breach of contract.

Quantum Meruit means a situation when the person providing the service has completed some but not all of the work required of him and is requesting payment for the worth of the work completed.

EXAMPLES OF QUANTUM MERUIT

• Medical assistance given in an emergency, Legal services rendered without a contract or determining the total amount due when the task ended unexpectedly are all examples of quantum meruit.

• Where a printer, having printed most of the work, refused to complete it because the dedication was libellous, he was held entitled to recover on quantum meruit meaning entitled to payment of prints taken so far. [Clay v Yates (1856) 1 H. & N. 73]

• Where a person has rendered services under a supposed contract which turns out to be a nullity, is entitled for recovery under the meaning of quantum meruit.

• In the case of Craven-Ellis v Canons Ltd (1936) 2 KB 403, the plaintiff and the company allegedly reached an agreement in which the plaintiff would serve as managing director for the company under certain conditions. However, the plaintiff who claimed to serve as the defendant company's directors actually owned the necessary qualification shares. Moreover, the appointment was made by the directors who were disqualified by the reason of not having their qualification shares. According to that contract, the plaintiff provided services that benefited the business and then filed a claim for payment. Because the agreement was made by directors without the necessary capacity, the Court ruled that neither party was bound to honour the contract. But the Court of Appeal decided that the plaintiff had a right to compensation based on quantum meruit meaning and its principles.

• Another example of quasi contract would be a case where a ship was delivered for repairs and the contractor used more expensive material than that authorised by the contract, he could not recover under the contract in purview of meaning of quantum meruit because he has not carried it out precisely.

THEORY OF QUANTUM MERUIT

Usually, one must fully discharge his/her commitment before claiming performance from another. However, theory of quantum meruit means anyone who has performed some work under a contract can claim remuneration for the work which he has already done.

SUIT UPON QUANTUM MERUIT

A suit upon quantum meruit can be invoked in following circumstances:

1. In case of void agreement or when a contract is declared void [Section 65]
2. Whenever a gratuitous act is involved [Section 70].
3. If a circumstance arises that prevents the contract's fulfilment.
4. In the case of a divisible contract.
5. In the case of an indivisible contract performed completely but badly.

ESSENTIAL CONDITIONS FOR APPLICABILITY OF QUANTUM MERUIT

For the rule of Quantum Meruit to be applicable, two pre-requisites must be satisfied:

1. Contract is terminated
2. The party who has not defaulted brings the claim to the Court of Law.

The action of Quantum Meruit is allowed in Indian Courts under Section 70 of the Indian Contract Act 1872, which states,

"Obligation of person enjoying the benefit of the non-gratuitous act—where a person lawfully does anything for another person, or delivers anything to him, not intending to do so gratuitously, and such other person enjoys the benefit thereof, the latter is bound to make compensation to the former in respect of, or to restore, the thing so done or delivered."

QUANTUM MERUIT AND UNJUST ENRICHMENT

People frequently mix the two ideas—Quantum Meruit and Unjust Enrichment—which are quite common. Both theories talk about the goal of keeping one party from carrying out the agreement, and the party that is preventing the other from doing so benefits from the services obtained without even having to pay for their values.

The difference between these two ideas is that unjust enrichment deals with situations where there is a failure to pay for the services, whereas quantum meruit deals with situations where the reasonable or fair sum should be paid.

CASE LAW ON QUANTUM MERUIT

M/s. Alopi Parshad & Sons Ltd vs The Union of India [1960 AIR 588, 1960 SCR (2) 793]

In this case, The Hon'ble Supreme Court dealt with an arbitration award which awarded a certain amount on the ground of quantum meruit. But, the same was set aside and it was held that "Compensation under quantum meruit is awarded for work done or services rendered when the price thereof is not fixed by a contract. For work done or services rendered pursuant to the terms of a contract, compensation quantum meruit cannot be awarded where the contract provides for the consideration payable on that behalf. Quantum meruit is but reasonable compensation awarded on the implication of a contract to remunerate, and an express stipulation governing the relations between the parties under a contract, cannot be displaced by assuming that the stipulation is not reasonable.”

CONCLUSION

One of the most frequently used legal expressions today is the Latin phrase "quantum meruit". In contrast to the entitlement to damages, the claim on "quantum meruit" does not derive from a contract. It is a claim based on a situation-implied quasi-contractual obligation. Only when a real contract is terminated does the claim for quantum meruit become valid. However, where adequate relief is available under the contract itself, the court may not provide any relief under the quasi-contract.