What is Quantum Meruit?
Quantum meruit, a Latin phrase which can be roughly translated as "as much as deserved," refers to the compensation which someone is entitled to for providing goods and services with an expectation of payment. If someone is not compensated, the issue can be taken to court and the court can award damages on the basis of quantum meruit. These damages cannot exceed the reasonable amount to which the person is entitled; people cannot be compelled, in other words, to pay more than something is worth in restitution.
This concept often comes up in cases in which there is an implied promise to pay, but no explicit agreement is made. It can also occur when a contract is breached, or in a situation where people have a quasi-contract. In all cases, even if there is no formal agreement to pay or if the terms of a contract have been suspended as a result of a breach, people are still entitled to payment under quantum meruit.
This is designed to prevent unjust enrichment, in which people benefit from products and services at the expense of someone else. For example, if a contractor is working on a deck and quits partway through, breaching the agreement, the contractor is still entitled to compensation for the materials used in the deck under quantum meruit. Of course, the homeowner can also sue for breach of contract and recover damages from the contractor, since the homeowner will need to find another contractor to finish the job.
The amount awarded in such cases must be reasonable. The court considers the costs claimed by the party seeking restitution and arrives at a judgment it thinks is fair, based on the situation and the real world value of the products and services provided. As mentioned in the previous example, receiving restitution under quantum meruit does not insulate people from liability for breach of contract, and it is possible to be countersued by the respondent.
In order to avoid cases in which people must sue for restitution, it is advisable to make contracts for situations in which one party is providing goods and services and for those contracts to specifically spell out terms in the event of a breach. This will reduce time spent in court in the event that the contract needs to be broken, and provide security for both parties involved in the arrangement. A lawyer can assist with the process of developing an appropriate contract and confirming that the contract is structured properly.
@nony - Just get everything in writing so that you know what the necessary exit clauses are. The most embarrassing situation is to have something stick out like a store thumb, like a patio that was started and never completed because the contractors bailed.
If I were hiring contractors, I would make it abundantly clear that in such a case I will sue for breach of contract, after I pay them for partial completion of the work. That should dissuade the people who intend to do a half hearted job.
@MrMoody - It’s really all about fairness in the end. I’ve done work for people where some of the work was completed as specified in an implied contract and some of it was not.
I didn’t walk away from the job. I just didn’t complete every part of the job per the owner’s specifications, and it may have been too much of a hassle to try to correct it.
In that case the client paid for services rendered, and partial payment for the balance of the work. I would never again, however, work for a client who never paid for what I worked on, whether they liked the work or not. Regardless of the client’s satisfaction, the fact is I still put in the hours, and it’s only fair to expect at least some compensation.
I can’t imagine any contractor worth his salt who would quit half way through a job, and then have the gall to demand payment for services rendered!
If I were such a contractor, I’d consider the job a loss and go on to the next project. I’d also remind myself that the owner can sue for breach of contract.
While I understand the concept behind the doctrine of quantum meruit, I think that just because you may have a “right” to remuneration in some instances does not mean that you should exercise it.
In the example given in the article, the contractor would be well advised not to exercise his right and just walk away. He may need a lawyer in the end anyway.
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