DOCTRINE OF QUANTUM MERUIT

When parties enter into a contract, there is a possibility for the breach of the contract and
breach of a contract can happen due to many reasons. For any breach of a contract to happen,
it is necessary that the remedies should also be made or should be given by any Court. Out of
five remedies which are available to the aggrieved party, one is a suit upon Quantum Meruit.

Quantum Meruit is a Latin phrase which means “what one has earned” or “as much as he has
earned”. In law of contract, this refers to the benefit or enrichment one party receives as a
result of the other party’s actions. Under the law, the theory means that another party has
received an unfair benefit and thus must provide restitution to the party who provided that
benefit. Thus, Quantum Meruit is a theory in the law that requires fairness and
reasonableness. The theory fosters equity of the parties and helps to ensure that if a person
provided a service or a good, that person receives the benefit of the contract. This may
include a physician's emergency aid, legal work when there was no contract, or evaluating the
amount due when outside forces cause a job to be terminated unexpectedly. If a person sues
for payment for services, in such circumstances, the judge or jury will calculate the amount
due based on time and usual rate of pay or the customary charge, based on Quantum Meruit
by implying a contract existed.

CASES IN WHICH QUANTUM MERUIT CLAIM ARISE

The claim of Quantum Meruit arises only when the original contract is discharged. The
various cases in which Quantum Meruit arise are:-

 In Case of Void Agreement or Contracts that become Void (Section 65):

When an agreement is discovered to be void, or a contract become void, any person
who received an advantage over the agreement or contract is bound to restore it or
make some compensation to the person or party from whom it is received.
For example, If A contracts with B to play violin for him in his theatre for 10 days. A
performs in B's theatre for 6 days but fails to perform from the 7th day to 10th day due
to illness. B is bond to pay A for those 6 days she performed. Section 65 of the Indian
Contract Act, 1872 talks about the circumstance that where work has been done in the
execution of the contract but later it is discovered that the contract is void or it
becomes void. Where a person enjoys the benefit of a non-gratuitous act (given or
 received without payment but where the party was obliged to pay) despite the fact that
there is no express agreement between the parties, then the person who has enjoyed
the benefit has to compensate the other party or restore the thing so delivered.

 In Case of Gratuitous Act (Section 70):

The obligation to pay arise if the following three conditions are satisfied-
 Things must have been done or delivered lawfully.
 The person who had done or delivered the thing must not have intended to so
gratuitously.
 The person for whom the act is done must have enjoyed the benefit of the act.
For example, David a vendor leaves his goods at Jimmy’s shop by mistake and Jimmy
treats them as his own goods without paying anything. Here Jimmy is bound to pay
David for the goods he left. When the contract is implied or expressed to render
services but there is no agreement with regard to remuneration, in such a case a
reasonable remuneration is payable and what is a reasonable remuneration will be
determined by the Court and this reasonable remuneration is the Quantum Meruit.
This concept is explained under Section 70 of the Indian Contract Act,1872.

 In Case of Act preventing the Completion of Contract:

If a party does not complete the contract or the prevent the other party from
performing the contract, the aggrieved party can sue the other party on Quantum
Meruit.
For example, Seema was the owner of a music publishing house and she engaged in a
contract with Veer to compose a music series which will be published by the music
publishing house. The first music album was released but before the publication of the
second music album, the music publication house was closed. Here, Veer can
claim Quantum Meruit for the part already published. He is entitled to a claim
because he was somehow prevented by the other party to perform his part and the
other party has violated the terms of the contract by not paying him the amount he
deserves.
  In Case of Divisible Contract:
The party at default can sue on a Quantum Meruit if the following conditions are
satisfied-
 The contract must be divisible.
 The other party must have enjoyed the benefit of the part which has been
performed, although he had the option of declining it.
For example, Mahesh agreed to construct a house for Kapil for ₹10,00,000 but in
midway, he abandoned the contract after having done the work worth ₹4,00,000.
Afterwards, Kapil somehow got the work completed. Here, Mahesh could not recover
anything for the work he has done, as he was entitled to the payment only on
completion of the work which apparently, he could not do.

 In Case of Indivisible Contract performed Completely but Badly:

The party at default may claim the lump sum less deduction for bad work if the
following conditions are satisfied-
 The contract should be indivisible.
 The contract should be for a lump sum.
 The contract should be completely performed.
 The contract was performed badly.
For example, Raju agreed to construct a house for Shyam for a lump sum of
₹5,00,000. Raju did complete the work but Shyam complained of fault in the work
done by him. It cost Shyam another ₹1,00,000 as a remedy to the defect. In this
example, Raju could only recover ₹4,00,000 from Shyam by reducing the amount of
bad work done.

DOCTRINE OF QUANTUM MERIT IN INDIA

In India, the Legislature in Section 70 of the Indian Contract Act, 1872 provides for the
recovery of compensation in certain cases, where a person lawfully does anything for another
without intending to do so gratuitously, and such other person enjoys the benefit thereof. In
order to come within the principle contained in the section, two essential points have to be
made out: firstly, that the person doing the work did not intend to do it gratuitously, and
secondly, that the other person has received the benefit from the work done. The mere
acceptance of the benefit of another’s work does not give rise to an implied promise to pay
thereof. The work must have been lawfully done with the intention of claiming something in
remuneration, and under Indian law there is also an authority to hold that it is necessary to
give the person who is sought to be made liable, an opportunity to refuse, on the principle
that no man is bound to pay for which he does not had the option of refusing, though it may
be noticed that the decisions are not uniform, and the question is still not free from doubts.