Page 32 - DMGT102_MERCANTILE_LAWS_I

Mercantile Laws-I

Notes 2.8.3 Quantum Meruit

The phrase ‘quantum meruit’ means ‘as much as merited’ or ‘as much as earned’. The general rule
of law is that unless a person has performed his obligations in full, he cannot claim performance
from the other. But in certain cases, when a person has done some work under a contract, and
other party repudiated the contract, or some event happens which makes the further performance
of the contract impossible, then the party who has performed the work can claim remuneration
for the work he has already done. The right to claim quantum meruit does not arise out of the
contract as the right to damages does; it is a claim on the quasi-contractual obligation which
the law implies in the circumstances [Patel Engg. Co. Ltd v. Indian Oil Corporation Ltd, AIR (1975)
Pat. 212].
The claim on ‘quantum meruit’ arises in the following cases:
1. When a contract is discovered to be unenforceable (s.65). 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 to make compensation for it to the person
from he received it.

Example:
(i) A pays B ` 1,000 in consideration of B’s promising to deliver his dog. The dog is dead at
the time of the promise. The agreement is void, but B must repay A the 1,000 rupees.
(ii) A contracts with B to deliver to him 250 kilos of rice before the 1st of May. A delivers
130 kilos only before that day and none after. B retains the 130 kilos after the 1st of May. He
is bound to pay A for them.
(iii) A, a singer, contracts with B, the manager of a theatre, to sing at his theatre for two
nights every week during the next two months, and B engages to pay her ` 100 for each
night’s performance. On the sixth night, A willfully absents herself from the theatre and B,
in consequence, rescinds the contract. B must pay A for the fi ve nights on which she had
sung.
2. When one party abandons or refuses to perform the contract. Where there is a breach of
contract, the aggrieved party is entitled to claim reasonable compensation for what he has
done under the contract.

Example: C, an owner of a magazine, engaged P to write a book to be published
in installments in his magazine. After a few installments were published, the magazine was
abandoned. Held, P could claim payment on quantum meruit for the part already published
[Planche v. Colburn (1831) 8 Bing. 14].

3. When a contract is divisible and the party not in default, has enjoyed the benefit of the part
performance, the party in default may sue on quantum meruit.
4. When an indivisible contract is completely but badly performed. When an indivisible
contract for a lumpsum is completely performed, but badly, the person who has performed
can claim the lump sum less deduction for bad work.

Example: A agreed to decorate B’s flat for a lumpsum of ` 750. A did the work but B

complained for faulty workmanship. It cost B ` 204 to remedy the defect. Held, A could recover
from B ` 750 less ` 204 [Hoening v. Isaacs (1952) AIR 11 E.R. 176].

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