Introduction. The doctrine of Quantum Meruit is an important equitable remedy under contract law. The expression means “as much as earned” or “as much as one deserves.” It allows a party to recover reasonable remuneration for the work done or services rendered when a contract becomes unenforceable, incomplete, or is breached. The principle prevents unjust enrichment and ensures fairness when one party has conferred a benefit but cannot claim under the original contract.
Meaning and Nature of Quantum Meruit
Quantum meruit is not a claim for damages; rather, it is a claim for reasonable payment for the value of benefit provided. The remedy arises when:
- The contract is void or becomes void.
- The contract is discovered to be void.
- The contract is divisible and part performance is accepted.
- One party prevents the other from completing performance.
- The contract is discharged due to breach or impossibility.
In all such situations, the law allows compensation for the work already performed, even though the full contract cannot be enforced.
Legal Basis
The remedy of quantum meruit is recognised under Sections 65 and 70 of the Indian Contract Act, 1872. These sections deal with restitution and obligations of a person enjoying the benefit of non-gratuitous acts.
Cases Where Quantum Meruit Applies
1. When a Contract Is Discovered to Be Void
If parties enter a contract believing it to be valid but later discover it is void, the party who has performed part of the contract can claim compensation for the benefit provided.
2. When a Contract Becomes Void
If performance is partially completed and the contract later becomes void (e.g., supervening impossibility), quantum meruit allows recovery of reasonable value for the past performance.
3. When One Party Prevents Performance
If one party is willing to perform but the other party prevents completion, the performing party may claim quantum meruit.
Illustration: A contractor is stopped midway by the employer without fault. The contractor can recover payment for the completed portion.
4. In Case of Divisible Contracts
When a contract can be divided into separate parts, and the party has completed one or more parts which are accepted by the other party, quantum meruit applies.
5. In Case of Voidable Contracts
If the aggrieved party rescinds a voidable contract, they can claim compensation for benefits already conferred.
6. When Consideration Fails
If consideration totally fails, the party who has performed something may claim quantum meruit for its value.
Important Case Laws
- Cutter v. Powell: A sailor died before completing his voyage; no quantum meruit allowed because the contract was entire, not divisible.
- Craven-Ellis v. Canons Ltd: A managing director appointed invalidly was allowed remuneration for services rendered.
- Planche v. Colburn: A writer was prevented from completing the book; quantum meruit allowed for part performance.
Rationale Behind Quantum Meruit
The fundamental purpose is to prevent unjust enrichment. It ensures that a party does not benefit at the expense of another without paying for the benefit received. It upholds fairness by ensuring that efforts, labour, and material supplied are compensated even when the full contract cannot be enforced.
Illustrations
- A painter completes half the work when the owner revokes the contract. The painter may claim proportionate payment.
- A contractor builds one room of a three-room house before the contract becomes void due to government restrictions. Quantum meruit applies.
- A person mistakenly delivers goods to another who uses them. Reasonable payment must be made under Section 70.
Conclusion: Quantum meruit is an equitable remedy designed to ensure fairness where a contract cannot be enforced or completed. It compensates a party for the value of work done or benefits conferred, preventing unjust enrichment and maintaining balance in contractual relations.