This Is What You Need To Know To Make A Claim In Quantum Meruit

What is a claim in Quantum Meruit?

Quantum meruit is an obligation imposed by law¹ that the party who has received the benefit from work pays a reasonable amount to the party who performed the work. This is to prevent unjust enrichment (i.e. receipt of benefits without making payments).

When can I claim in Quantum Meruit?

A claim in quantum meruit mainly arises in the following situations:

Contractual Quantum Meruit

The contract (or arrangement) does not fix the price or provide a mechanism for calculating the price for payment.

In this situation, the contractor can make a claim in quantum meruit based on an implied term and provide evidence of the value of the entire work to show a reasonable price for the work performed.²

Quasi-Contractual Quantum Meruit

The work has been performed under a void or unenforceable contract, such as where a contract is frustrated or illegal under a statute.³

In this situation, there contractor has no contractual rights to make a claim but can make a claim on a quantum meruit basis and provide evidence of the value of the entire work to prevent unjust enrichment of the principal.

Non-Contractual Quantum Meruit

The contractor terminates a contract due to the principal's repudiation, and the contractor has no contractual right to payment for the work performed at the time of the termination.

The non-contractual quantum meruit is an interesting claim as some parts of the claim are made under the terms of a contract, and the balance that is not recoverable under the contract can be claimed in quantum meruit. Accordingly, the contractor's claim is put in two ways as the claim falls into two categories:

1. the unpaid work performed by the contractor has already accrued a contractual right to payment under the contract at the time of its termination;⁴ or
2. the contractor has not yet accrued any contractual right to payment under the contract at the time of its termination.⁵

(Categories)

In Category 1, the contractor must make a claim in accordance with the terms of the contract, given that it has enforceable contractual rights to do so.⁶ Therefore, no quantum meruit claim can be made. The contractor can also claim damages (for sums beyond any contractual entitlements) arising from the owner's breach of the contract and provide evidence supporting its damages claim.⁷

In Category 2, the contractor has no contractual rights to payment at the time of the termination of the contract. Accordingly, the contractor is entitled to make a quantum meruit claim by:

1. identifying the work that was performed and priced under the contract price prior to termination if any; and
2. identifying that other work performed that could not be priced under the contract (as the terms of the contract may not allow pricing say to the completion of a separable part) and providing evidence regarding the value of the additional work assessed on a quantum meruit basis (i.e. not in accordance with the rates under the contract).

Key takeaway

When a contractor wishes to make claims on a quantum meruit basis, it is important to identify the extent of work performed under the terms of the contract and the extent to which other works are not covered by the contract. Further, the contractor must ensure the evidence in support of the quantum meruit claim is an assessment of the value of that work performed.

Footnotes

1 Pavey & Matthews Pty Ltd v Paul (1987) 162 CLR 221, 7.

2 Horton v Jones (No.2) (1939) SR (NSW) 305, 319. See also Amantilla Ltd v Telefusion plc (1987) 9 Con LR 139.

3 Pavey & Matthews Pty Ltd v Paul (1987) 162 CLR 221, 7. See also Johnson Property Group Pty Ltd v Thornton [2015] NSWSC 1389, 87.

4 Mann v Paterson Constructions Pty Ltd [2019] HCA 32. Ibid, 57 and 60.

5 Ibid.

6 Ibid, 19.

7 Cappello v Hammond & Simonds NSW Pty Ltd [2020] NSWSC 1021, 22.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.