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Contract law |
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Part of the common law series |
Contract formation |
Defenses against formation |
Contract interpretation |
Excuses for non-performance |
Rights of third parties |
Breach of contract |
Remedies |
Quasi-contractual obligations |
Related areas of law |
Other common law areas |
Quantum meruit is a Latin phrase meaning "what one has earned". In the context of contract law, it means something along the lines of "reasonable value of services".
In the United States, the elements of quantum meruit are determined by state common law. For example, to state a claim for unjust enrichment in New York, a plaintiff must allege that (1) defendant was enriched; (2) the enrichment was at plaintiff's expense; and (3) the circumstances were such that equity and good conscience require defendants to make restitution. [1]
Quantum meruit is the measure of damages where an express contract is mutually modified by the implied agreement of the parties, or not completed. While there is often confusion between the concept of quantum meruit and that of "unjust enrichment" of one party at the expense of another, the two concepts are distinct.
The concept of quantum meruit applies in (but is not limited to) the following set of situations:
The measure of value set forth in a contract is legally admissible as evidence of the value of the improvements or services but the court (or thus out of court settlement) is not required to use the contract's terms when calculating a quantum meruit award. (This is because the values set forth in the contract are rebuttable, meaning the one who ultimately may have to pay the award can contest the value of services set in the contract.)
I. An example used in United States law schools is usually the case of Steven v Bromley & Son [1919].
II. Person A (plaintiff in this hypothetical) tells neighbor B (defendant) that he is going to build a wall on their property that will give a benefit to both A and B; A implies that it would be cheaper for both of them if A performs the labor instead of hiring a professional. B agrees that the wall should be built, but no price is negotiated. A builds the wall, and then asks B to compensate him for the benefit of the wall that he conferred on B (usually half the value of the wall). B refuses. A is entitled to some compensation based on quantum meruit. This is because there was an implied promise between A and B, which is derived from contract law, because A was acting under the assumption that B would pay for part of his services (see Estoppel). The winning of the case, or damages that would be agreed in any out of court settlement, will be directed as an assumpsit on a quantum meruit. Day v. Caton, 119 Mass. 513 (1876).
III.Quantum meruit can also apply where there is a breached contract.
IV. If a contractor finds part of their work replaced by others through no fault of their own, they seek damages for the amount(s) that the defendant benefited. Third parties, absent provisions preventing, such as new contractors finding the work more complex as a result of defects may, just as with all equitable actions, like a quantum meruit-basis restitution, promptly to avoid the doctrine of laches (equity) (having let matters lie) bring action against that contractor.
V. A promoter enters into a long-term service contract with a theatre to help book and organise shows for no one else for a few months. They take part-paid bookings for shows over these months but pass on none of that as agreed as they have grounds to allege the theatre is unsafe and the theatre need to make it safe. The theatre performs no repairs. Instead, the theatre terminates the contract before the benefit of the shows. After this the theatre runs most of the shows and gains benefit but does not pay the promoter. Some shows the theatre cancels without cause. A court would decide, following similar precedent, that the promoter is entitled to an assumpsit on a quantum meruit if the promoter has acted in a proportionate way as trustee (depository), delaying forwarding of the principal of the ticket sale part-payments, for sufficiently well-founded premises defects which could have affected its reputation.
Breach of contract is a legal cause of action and a type of civil wrong, in which a binding agreement or bargained-for exchange is not honored by one or more of the parties to the contract by non-performance or interference with the other party's performance. Breach occurs when a party to a contract fails to fulfill its obligation(s), whether partially or wholly, as described in the contract, or communicates an intent to fail the obligation or otherwise appears not to be able to perform its obligation under the contract. Where there is breach of contract, the resulting damages will have to be paid by the party breaching the contract to the aggrieved party.
A quasi-contract is a fictional contract recognised by a court. The notion of a quasi-contract can be traced to Roman law and is still a concept used in some modern legal systems.
The forms of action were the different procedures by which a legal claim could be made during much of the history of the English common law. Depending on the court, a plaintiff would purchase a writ in Chancery which would set in motion a series of events eventually leading to a trial in one of the medieval common law courts. Each writ entailed a different set of procedures and remedies which together amounted to the "form of action".
In laws of equity, unjust enrichment occurs when one person is enriched at the expense of another in circumstances that the law sees as unjust. Where an individual is unjustly enriched, the law imposes an obligation upon the recipient to make restitution, subject to defences such as change of position. Liability for an unjust enrichment arises irrespective of wrongdoing on the part of the recipient. The concept of unjust enrichment can be traced to Roman law and the maxim that "no one should be benefited at another's expense": nemo locupletari potest aliena iactura or nemo locupletari debet cum aliena iactura.
The law of restitution is the law of gains-based recovery. It is to be contrasted with the law of compensation, which is the law of loss-based recovery. When a court orders restitution it orders the defendant to give up his/her gains to the claimant. When a court orders compensation it orders the defendant to pay the claimant for his or her loss.
Assumpsit, or more fully, action in assumpsit, was a form of action at common law used to enforce what are now called obligations arising in tort and contract; and in some common law jurisdictions, unjust enrichment.
Damages for breach of contract is a common law remedy, available as of right. It is designed to compensate the victim for their actual loss as a result of the wrongdoer’s breach rather than to punish the wrongdoer. If no loss has been occasioned by the plaintiff, only nominal damages will be awarded.
A cause of action, in law, is a set of facts sufficient to justify suing to obtain money, property, or the enforcement of a right against another party. The term also refers to the legal theory upon which a plaintiff brings suit. The legal document which carries a claim is often called a 'statement of claim' in English law, or a 'complaint' in U.S. federal practice and in many U.S. states. It can be any communication notifying the party to whom it is addressed of an alleged fault which resulted in damages, often expressed in amount of money the receiving party should pay/reimburse.
Fibrosa Spolka Akcyjna v Fairbairn Lawson Combe Barbour Ltd[1942] UKHL 4 is a leading House of Lords decision on the doctrine of frustration in English contract law.
The English law of unjust enrichment is part of the English law of obligations, along with the law of contract, tort, and trusts. The law of unjust enrichment deals with circumstances in which one person is required to make restitution of a benefit acquired at the expense of another in circumstances which are unjust.
A contract is a legally binding document between at least two parties that defines and governs the rights and duties of the parties to an agreement. A contract is legally enforceable because it meets the requirements and approval of the law. A contract typically involves the exchange of goods, service, money, or promise of any of those. "Breach of contract", means that the law will have to award the injured party either the access to legal remedies such as damages or cancellation.
Contract law regulates the obligations established by agreement, whether express or implied, between private parties in the United States. The law of contracts varies from state to state; there is nationwide federal contract law in certain areas, such as contracts entered into pursuant to Federal Reclamation Law.
Baltic Shipping Company v Dillon, the Mikhail Lermontov case, is a leading Australian contract law case, on the incorporation of exclusion clauses and damages for breach of contract or restitution for unjust enrichment.
The English law of Restitution is the law of gain-based recovery. Its precise scope and underlying principles remain a matter of significant academic and judicial controversy. Broadly speaking, the law of restitution concerns actions in which one person claims an entitlement in respect of a gain acquired by another, rather than compensation for a loss.
Sumpter v Hedges [1898] 1 QB 673 is an English contract law case, concerning substantial performance of a contract and restitution for unjust enrichment.
BP Exploration Co (Libya) v Hunt [1983] 2 AC 352 is an English contract and unjust enrichment case, concerning the frustration of an agreement.
An action for money had and received to the plaintiff's use is the name for a common law claim derived from the form of action known as indebitatus assumpsit. The action enabled one person to recover money which has been received by another: for example, where a plaintiff paid money to the defendant while labouring under a mistake of fact or where there was a total failure of consideration. The action was a personal action only available in respect of money, rather than other benefits. Where the benefit received by the defendant was services or goods, the appropriate action was a quantum meruit or a quantum valebant, respectively.
Pavey & Matthews Pty Ltd v Paul, is a leading Australian case concerning unjust enrichment, and an award for restitution based on quantum meruit.
Benedetti v Sawiris[2013] UKSC 50 is an English unjust enrichment law case, concerning the method for determining the amount of a quantum meruit claim. It was decided by the United Kingdom Supreme Court.
Moses v Macferlan (1760) 2 Bur 1005 is a foundational case in the law of restitution holding that in certain circumstances such as when money is paid by mistake, for failed consideration or under oppression; the law will allow the money to be recovered.