RULE OF QUANTUM MERUIT UNDER CONTRACT ACT, 1872

QUANTUM MERUIT MEANING

The Latin term "quantum meruit," which has to do with the Indian Contract Act of 1872, means "what one has earned" or "as much as he has earned." A demand for a reasonable amount in connection with goods or services rendered to the defendant is known as a quantum meruit. Therefore, even in the absence of a clear contract, the law of quantum meruit implies a commitment to pay a fair price for the labor and materials supplied. 

In layman's terms, quantum meruit simply refers to fair compensation. It is not the same as a lawsuit that can be brought for contract violations.

A circumstance known as "quantum meruit" occurs when the service provider has finished part of the task but not all of it and is asking to be paid for the value of the labor they have done.

Examples

Examples of quantum merit include providing emergency medical care, providing legal services without a contract, and calculating the entire sum owed when a task ends unexpectedly. 

• In cases where a printer refused to finish a job after printing the majority of it due to a defamatory dedication, he was granted the right to recover on a quantum merit basis, which entitles him to remuneration for the prints that have already been taken. [Yates v. Clay, 1856, 1 H. & N. 73]

• Under the definition of quantum merit, an individual who performed services under an alleged contract that later proved to be void is entitled to compensation.

• The plaintiff and the firm reportedly came to an arrangement in the case of Craven-Ellis v. Canons Ltd. (1936) 2 KB 403, whereby the plaintiff would act as managing director for the company subject to certain restrictions. But in reality, the plaintiff who held the required qualification shares was the one claiming to be a director of the defendant business. Furthermore, the directors who made the appointment lacked their qualifying shares, excluding them from office. In line with that agreement, the plaintiff submitted a claim for payment after rendering services that helped the company. The Court decided that neither party was required to uphold the agreement since it was made by directors lacking the required authority. However, the Court of Appeal determined that the plaintiff was entitled to damages in accordance with the principles of quantum meruit.

• Another instance of a quasi-contract would be if a ship was delivered for repairs and the contractor used more expensive material than what was permitted by the contract. Because he did not complete the work precisely, he was not entitled to recover under the terms of the contract in the context of a quantum meruit.

Quantum Meruit Theory

Generally, in order to demand performance from another, one must first fulfill their pledge in full. On the other hand, anyone who has completed work under a contract may be eligible to receive payment for the work they have already completed according to the theory of quantum meruit.

When can a suit be filed- QUANTUM MERUIT

The following situations may result in the filing of a lawsuit upon quantum meruit:

1. When a contract is deemed void or an agreement is deemed void [Section 65]

2. In cases where there is a gratuitous act [Section 70].

3. Should an occurrence occur that makes it impossible for the contract to be fulfilled.

4. In the event that a contract is divided.

5. When an indivisible contract is fully executed but executed poorly.

QUANTUM MERUIT'S ESSENTIAL CONDITIONS FOR APPLICABILITY

Two conditions need to be met in order for the Quantum Meruit rule to apply:

1. The agreement is cancelled

2. The claim is brought before the Court of Law by the party who has not defaulted.

Section 70 of the Indian Contract Act 1872 permits the action of Quantum Meruit in Indian Courts. It states, 

"Obligation of person enjoying benefit of non-gratuitous act—where an individual lawfully provides something to another individual, without intending to do so gratuitously, and that individual enjoys the benefit thereof, the recipient is required to reimburse the giver for the amount provided or to replace the item that was provided."

UNJUST ENRICHMENT AND QUANTUM MERUIT

The two widely held concepts of Quantum Meruit and Unjust Enrichment are often confused. According to both views, the objective is to prevent one party from carrying out the agreement, and the side succeeding in doing so gains access to the services without ever having to pay for their principles. 

The distinction between these two concepts is that, whereas quantum meruit addresses circumstances where the reasonable or fair amount should be paid, unjust enrichment deals with cases where there is a failure to pay for the services.

QUANTUM MERUIT CASE LAW

The Union of India v. M/s. Alopi Parshad & Sons Ltd. [1960 AIR 588, 1960 SCR (2) 793]

The Honorable Supreme Court considered an arbitration ruling in this case that granted a specific sum based on quantum meruit. However, this was overturned, and it was decided that "When the cost of the work or services is not specified in a contract, compensation under quantum meruit is awarded." Where a contract specifies the consideration that must be paid in connection with work completed or services given in accordance with its terms, compensation quantum meruit cannot be granted. A specific clause defining the parties' relationship under a contract cannot be superseded by assuming that the clause is unreasonable. Quantum meruit is only reasonable remuneration granted on the implication of a contract to remunerate.

Conclusion 

The Latin phrase "quantum meruit" is one of the terms used in law today most often. The claim on "quantum meruit" is not based on a contract, in contrast to the right to damages. It is a claim founded on a quasi-contractual duty indicated by the circumstances. The claim for quantum meruit is only applicable upon the termination of a real contract. On the other hand, the court may not grant any relief under the quasi-contract if sufficient relief is available under the contract itself.