The doctrine of quantum meruit allows a party to claim reasonable compensation for services rendered or goods provided when a contract does not specify remuneration or when no formal contract exists. This principle ensures fairness by preventing unjust enrichment.

MEANING AND DEFINITION

“Quantum meruit” is a Latin term meaning “as much as he has earned.” In legal terms, it refers to the equitable principle that a person should receive reasonable payment for services or goods provided, even in the absence of a specific contract or when a contract is unenforceable. This concept is rooted in the idea that one party should not be unjustly enriched at the expense of another.

LEGAL PROVISIONS IN THE INDIAN CONTRACT ACT, 1872

The Indian Contract Act, 1872, incorporates the principle of quantum meruit through specific provisions:

• Section 65: Addresses obligations when agreements are discovered to be void or become void. It mandates that any person who has received an advantage under such an agreement or contract is bound to restore it or make compensation to the person from whom it was received.

• Section 70: Deals with obligations of a person enjoying the benefit of a non-gratuitous act. It states that if a person lawfully does anything for another person or delivers anything to him, not intending to do so gratuitously, and the other person enjoys the benefit thereof, the latter is bound to make compensation to the former in respect of, or to restore, the thing so done or delivered.

ESSENTIALS FOR A QUANTUM MERUIT CLAIM

For a claim under quantum meruit to be valid, the following conditions must be satisfied:

1. Lawful Act or Delivery: The act done or goods delivered must be lawful.
2. Non-Gratuitous Intent: The person performing the act or delivering the goods must not intend to do so gratuitously.
3. Acceptance and Benefit: The other party must have accepted and enjoyed the benefit of the act or goods.

CIRCUMSTANCES LEADING TO QUANTUM MERUIT CLAIMS

Quantum meruit claims can arise in various situations:

• Void or Voidable Contracts: When an agreement is discovered to be void or becomes void, any person who has received any advantage under such agreement or contract is bound to restore it or make compensation for it to the person from whom he received it.

• Non-Gratuitous Acts: If a person lawfully does anything for another person or delivers anything to him, not intending to do so gratuitously, and such other person enjoys the benefit thereof, the latter is bound to make compensation to the former.

• Prevention of Contract Completion: If one party prevents the other from completing the contract, the aggrieved party can claim compensation for the work done.

• Divisible Contracts: In cases where a contract is divisible and a party performs part of it, they may claim payment for the part performed if the other party has enjoyed its benefit.

CASE LAWS ILLUSTRATING QUANTUM MERUIT

1. Mahanagar Telephone Nigam Limited v. Tata Communications Limited (2019): The Supreme Court of India held that a claim in quantum meruit cannot be raised when parties are governed by a contract that specifies a certain amount as liquidated damages. The court emphasized that if a contract provides for a specific sum as liquidated damages, only that amount is to be levied on breach, as per Section 74 of the Indian Contract Act. Any amount beyond the stipulated sum must be refunded.

2. Puran Lal Sah v. State of U.P. (1971): In this case, the Supreme Court clarified that a party who breaks a contract cannot claim compensation under quantum meruit for the part of the work they have completed. The court distinguished between a claim for damages and a claim under quantum meruit, stating that the latter applies as if the contract never existed, while the former applies as if the contract was fully performed.

3. Craven-Ellis v. Canons Ltd. (1936) 2 KB 403: The plaintiff was appointed as managing director of the defendant company under an agreement that was later found to be void due to non-compliance with statutory requirements. Despite the invalidity of the contract, the court held that the plaintiff was entitled to remuneration for services rendered based on the principle of quantum meruit.

QUANTUM MERUIT VS. UNJUST ENRICHMENT

While both doctrines aim to prevent one party from benefiting at the expense of another, they are distinct:

• Quantum Meruit: Focuses on providing reasonable compensation for services rendered or goods provided when no specific contract exists or when a contract is unenforceable.

• Unjust Enrichment: Occurs when one party is unjustly enriched at the expense of another, and the law imposes an obligation to rectify the injustice, even in the absence of a contract.

CONCLUSION

The doctrine of quantum meruit serves as an equitable remedy to ensure fairness in contractual and quasi-contractual relationships. By allowing parties to claim reasonable compensation for services rendered or goods provided, it prevents unjust enrichment and upholds the principles of justice and equity in the legal system.

REFERENCES

1. Mahanagar Telephone Nigam Limited v. Tata Communications Limited, (2019) 5 SCC 341.
2. Puran Lal Sah v. State of U.P., (1971) 1 SCC 142.
3. Craven-Ellis v. Canons Ltd., (1936) 2 KB 403.
4. Indian Contract Act, 1872, Sections 65 and 70.