| Quantum meruit is a Latin phrase meaning "as | | | | Unlike in a claim for loss and expense where the |
| much as deserved". In the context of contract | | | | task is to put the innocent party in the same |
| law, it means something along the lines of | | | | position it would have financially been in had it |
| "reasonable value of services". In the United | | | | completed the whole job under the contract. For |
| States, the elements of quantum meruit are | | | | a quantum meruit claim, the approach is to assess |
| determined by state common law. For example, | | | | the fair and reasonable value of the work |
| to state a claim for unjust enrichment in New | | | | performed. This involves a determination of the |
| York, a plaintiff must allege that (1) defendant | | | | value of the benefit conferred on the receiving |
| was enriched; (2) the enrichment was at plaintiff's | | | | party. This means the amount recoverable on a |
| expense; and (3) the circumstances were such | | | | quantum meruit claim may potentially exceed the |
| that equity and good conscience require | | | | amount that would have been recovered if the |
| defendants to make restitution. | | | | contract had been fully performed. |
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| For example, when a person hires another to do | | | | It is immaterial that a judgment on a quantum |
| work for him, and the contract is either not | | | | meruit basis might exceed the amount which |
| completed or is otherwise rendered | | | | would have been payable under the contract. A |
| un-performable the person performing may sue | | | | quantum meruit remedy rests on the fiction that |
| for the value of the improvements made or the | | | | the contract ceased to exist from the beginning. |
| services rendered to the defendant. The law | | | | As a result where the claim is made on a |
| implies a promise from the employer to the | | | | quantum meruit basis, the contract price does not |
| workman that he will pay him for his services, as | | | | impose a ceiling on the amount recoverable. |
| much as he may deserve or merit. In calculating a | | | | |
| quantum meruit award, the values set forth in the | | | | The contract price may provide a guide to the |
| contract are rebuttable, meaning the one who | | | | reasonableness of the remuneration claimed, but |
| ultimately may have to pay the award can | | | | is not "the best evidence" of the value of the |
| contest the value of services set in the contract. | | | | benefit conferred. A contract price is struck |
| | | | | prospectively, based on the parties' expectation |
| Another example is that a person talks to a | | | | of the future course of events. A quantum |
| neighbor and tells him he's going to build a wall on | | | | meruit is assessed with the benefit of hindsight, |
| their property that will give a benefit to both the | | | | on the basis of the events which actually |
| person and his neighbor, the person implies that it | | | | happened. |
| would be cheaper for both of them if the Man | | | | |
| perform the labor instead of hiring a professional. | | | | Another example is where a certain portion of |
| The neighbor agrees that the wall should be built, | | | | loss suffered by the contractor is borne by the |
| but no price is negotiated. The person builds the | | | | employer particularly when a part of the contract |
| wall, and then asks the neighbor to compensate | | | | works has been taken over by another |
| him for the benefit of the wall that he conferred | | | | contractor (as a remedy in catching up the |
| on the neighbor (usually half the value of the wall). | | | | delays) on the basis of payment at a higher price |
| The neighbor refuses. The man is entitled to | | | | quoted subsequently and when the contractor has |
| some compensation based on quantum meruit. | | | | taken on board the risk of financial losses likely to |
| This is because there was an implied promise | | | | incur due to price increase over a period for |
| between the man and the neighbor, which is | | | | which he has consented to pay the cost |
| derived from contract law, because the man was | | | | difference. |
| acting under the assumption that the neighbor | | | | |
| would pay for part of his services. 'Quantum | | | | In establishing a quantum meruit claim, the |
| meruit' may therefore depend on equitable | | | | claimant must prove the total costs incurred and |
| principle of unjust enrichment which is based on | | | | payments made by it in carrying out the works. |
| the need to prevent the neighbor from unjustly | | | | The claimant must also establish that the amounts |
| enriching himself by allowing the fence builder to | | | | in question were fair and reasonable in the |
| proceed with the work based on an assumption | | | | circumstances. The value of the work done can |
| that he would be compensated. | | | | be proved by evidence of the actual costs |
| | | | | incurred. |
| Another example is when a contractor is | | | | |
| contracted to work on a school. The contractor | | | | It is appropriate to ascertain what it would have |
| does some work but then quits (breach of | | | | cost to have the works carried out by another |
| contract). The contractor is entitled to be paid for | | | | builder in comparable circumstances. This includes |
| the services he has already done for the school | | | | the entitlement to a profit margin. The inclusion of |
| on the basis of quantum meruit (however the | | | | a margin for profit and overhead means that the |
| school may be entitled to damages arising out of | | | | calculation approximates the replacement cost of |
| the need to look for a new contractor). | | | | the works, the benefit conferred on the owner. |
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