This is a topic for those parties who intend to create a contract and/or requested the service provider to execute the services/works at the expense of other parties or being benefited from the other parties with no agreed terms as to price or payment. It is quite frequently occurs in construction industry that due to time constraint in particular, the Contractor often commence the works on the basis of a letter of intent issued by the Employer or S.O. (or Architect / Engineer / Project Director depending upon the contract concern) before the contract is actually ‘formalised’. In some cases, the Contractor is requested by the Employer or S.O. to carry out the extra work on the basis of a variation order which is not governed by the contract and/or the existing contract prices/rates for the said extra work is not applicable. Thus, whether such bases entitled the Contractor to claim on quantum meruit based in contract or in restitution is now addressed in this question.
Now let us understand the meaning of ‘quantum meruit’ and on what circumstances that applies. The expression quantum meruit means “the amount he deserves” or “what the job is worth”. It is a claim for a payment for the work executed where no price has been agreed or quantified and usually a claim being assessed in a ‘reasonable sum’, ‘reasonable remuneration’, ‘fair market rates’, ‘fair commercial rates’ or similar manner.