Quantum meruit refers to an equitable doctrine where the law recognises that on the occasion an individual is not designated a payment for their work, the individual is to receive a payment that is based on how valuable and reasonable the performance of their service was. A claim for Quantum Meruit is most common in construction contracts or heads of agreement. For example, a quantum meruit claim can be applied if a builder entered into a contract that was unenforceable. This is because the builder would be able to use this claim to become compensated for their work by proving the fair value of the services they provided.
What is the purpose of a Quantum Meruit Claim?
A claim for quantum meruit exists to supply a reasonable sum for work that has been performed or goods provided without any remuneration. This is to ultimately acknowledge the benefits of labour reaped by the service that an individual (For eg. A builder) provides to another party (eg. home owner).
When can you make a claim of Quantum Meruit?
You may make a claim for quantum meruit in many situations which include:
- When the contract doesn’t specify remuneration even though a service has been requested
- Where work is completed outside the contract
- Work has been completed but the contract has been rescinded, unenforceable or void
- Work has not been completed under contract and was only performed under a heads of agreement
What needs to be proved when making a claim of Quantum Meruit?
The following elements need to be satisfied when making a claim of of Quantum Meruit:
- There has been a request for work to be performed/ goods to be provided
- The performance of this service was fulfilled
- Consequently, the defendant (eg. developer) was able to benefit from the performance of the service
What is a ‘reasonable sum’ when making a claim of Quantum Meruit?
The court will provide a ‘reasonable’ sum as compensation. This sum is dependent on factors which the court takes into consideration to produce the fairest and reasonable outcome as possible. There factors include:
- The quality of the service which was performed
- The ‘commercial value’ of the work which was performed
- Whether the contract or heads of agreement stipulates a sum which was agreed on by both parties
It is also very important that you are able to collect evidence (eg. receipts and invoices which show the costs incurred from providing a service) as this can assist in indicating that the defendant has been charged an appropriate price for the performance of your work.
In Summary
Quantum Meruit provides parties with a payment for their labour that was completed either under a construction contract or heads of agreement. In order to make this claim successful, it must be proven that the defendant has been charged a ‘reasonable sum’ for the work performed. If you have any further questions and need assistance, contact one of our construction lawyers now at 1300 337 997.
Liv is one of OpenLegal's paralegals. Liv is a passionate student of the law, with a real interest in the way that business and legal requirements intersect.
Phil is a director at OpenLegal. He has over 16 years experience working in private practice and in-house counsel in Sydney and London, giving him expertise in employment law, IP, finance, leases, dispute resolution, insurance and contracts.
