Discuss the doctrine of Quantum Meruit

Question: Discuss the doctrine of Quantum Meruit. [BJS 2000]

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Answer

Where a party has in the performance of his contract done some work or rendered some service and the further performance has been made useless by the other party, he may recover reasonable compensation for the work or service. Section 65 of the Indian Contract Act, 1872 is said to embody the principles of quantum meruit.

A quantum meruit is only available if the original contract has been discharged. If the contract is still open the remedy of quantum meruit cannot be used, but only damages can be claimed. It is unavailable to the plaintiff if there is a contract, though unenforceable under the statute of frauds. But a claim must be brought by a party, not in default.

The terms quantum meruit or quantum valebat are used in three distinct senses at common law, namely as denoting

1. A claim by one party to a contract, for example on breach of the contract by the other party, or under an enforceable, void, or illegal agreement, for reasonable remuneration for what he has done;
2. A mode of redress on a new contract which has replaced a previous one, also to enable recovery of a reasonable sum as additional remuneration for extra work under an existing contract
3. A reasonable price or remuneration will be implied in a contract where no price or remuneration has been fixed for goods sold or work done.

The last two are based on a contract, while the first is not. Claims for a quantum meruit in respect of work voluntarily done under a contract terminated for breach, or under an unenforceable, void, or illegal contract are quasi-contractual.

In, Taylor v Bowers (1876) 1 QBD 291 the Supreme Court observed

“Compensation quantum meruit is awarded for work done or services rendered when the price thereof is not fixed by a contract. For work done or services rendered pursuant to the terms of a contract, compensation quantum meruit cannot be awarded where the contract provides for consideration payable in that behalf.”

Quantum meruit is a remedy alternative to, rather than a form of, damages. It is a right dehors a contract, a quasi-contractual right, and not a contractual one. It is an incident of, and not a remedy for, the breach of a contract.

Quantum meruit is a quasi-contract and arises in a sense on an implied contract, although in some cases it may arise out of contract. It is not a remedy for a breach nor does it arise on frustration, but it is an incident, which does arise as a consequence of the contract or arising out of it.

For example, the fact that a person does the work under an agreement that was in fact, void, does not disentitle him from recovering on a quantum meruit. If a party to a contract renders service to the other not intending to do so gratuitously and the other party has obtained benefit thereof, he is entitled to compensation for the value of service rendered by him. If the former fails to prove an oral agreement, compensation quantum meruit can be awarded.

The relief under quantum meruit is granted under Section 65 on the principles of restitution in contracts found invalid. The principle of restitution embodied in this section in case of the contract found to be invalid is that of giving relief on quantum meruit. Where the contract is invalid under a statute, the refund of benefit can be claimed either under Section 65 or on the principle of quantum meruit.

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Law of Contract Mains Questions Series: Important Questions for Judiciary, APO & University Exams

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