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  • Subject area(s): Marketing
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  • Published on: 14th September 2019
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What is meant by a Quantum Meruit Payment?

Quantum Meruit literally means 'what the job is worth', the actual value of services performed. It is a reward made where one of the parties has completed his part of work performance before the other's breach. A contractor has the right to get back the fair and reasonable amount for their work performed and materials supplied. The aim of the award is to put the plaintiff in the position he would have been in if the contract had been performed. It is a compensatory award. In particular situations, a claim may be made on a quantum meruit basis as an alternative to the action for damages for breach of contract. Quantum meruit payment can arise where:

• A defendant has prevented a plaintiff from carrying out the remainder of their contractual duties;

• The parties cannot agree on payment, and

• The parties agree on payment for the part-performance but not the actual amount

Quantum meruit payment can determines the amount that should be paid for services when no contract exists or when there is doubt as to the amount due for the work performed but done under circumstances when payment could be expected. The court will take several factors into account in considering what a reasonable sum is such as the commercial rate for the work, site conditions, whether the contract refers to certain prices, conduct of parties, and quality of work.

CASE STUDY

1.) 1.) Sumpter v Hedges (1898)

Facts: The plaintiff is a builder. He agreed and entered into a contract that made by   

    defendant to build two houses and stables on the defendant's land. They agreed

    that £565 would be the payable on completion. The plaintiff had performed just  

    more than the half of the work but he ran out of money and was unable to

    complete. The plaintiff told to the defendant that he could not complete the job.  

    The defendant completed the work himself and he sought the defendant to

    recover £333 representing the value of the work he had performed. He argued

    that he was complete whole work by himself, the defendant had thereby

    accepted partial performance and not allow the plaintiff from completing the

    contract.  

   Held: The contract was entire, not divisible. The plaintiff's action failed to recover under

    it. If the plaintiff was unable to perform that he agreed, then this is not the fault of

    the defendant and did not have the right to a quantum meruit. While if the

    defendant receive benefit for the plaintiff, it did not constitute acceptance of partial

    performance in this case.

2.) Sopov v Kane Constructions Pty Ltd

Facts: In August 1999, Kane Constructions Pty Ltd (Kane) and Sopov entered into a

   contract as contractor in a construction project at a former industrial building site at

   Collingwood. Sopov had refused to pay the full amount of a progress claim approved

   by the superintendent; Sopov was claiming a right to deduct liquidated damages

   during the course of the construction. Kane got a notice expressing that the failure to

   pay for Sopov was a substantial breach of the contract and Sopov subsequently called

   upon the bank guarantees. Sopov continued to insist on the right, so Kane suspended

   work and removed its equipment from the site. Without giving proper notice as

   required under the contract, Sopov made a call on Kane's bank guarantee amounted to

   refuse the contract, which had accepted and hence terminated the contract. At first

   instance, it was found that Sopov had refused the contract while Kane had the right to

   terminate the contract. Kane having accepted Sopov's repudiation of the contract had

   a right to claim quantum meruit.

Held: The Court provided that the plaintiff has the right to claiming damages for breach of

   contract or a quantum meruit for the value of the performance that had been done

   from the defendant. The plaintiff should prove the total value of the performance that

   had been done and the amount should be reasonable in circumstances. To complete

   the contract under ordinary circumstances, the court held that performance should

   complete in a reasonable time, and contractor should know what factors would affect

   their control.

3.) Chodos v. West Publishing Co.

Fact: The author had entered into a contract with West Publishing Company to write a book.

    However, when the author complete perform the book that require by defendant, the

    defendant refused to publish the book to the market because citing solely sales and

    marketing reasons. The plaintiff sued the defendant for quantum meruit.

Held: The plaintiff fail to claim from the defendant because the contract that the plaintiff

    entered into is “a standard industry agreement” for the publication of a book dealing

    with the law of fiduciary duty.  The defendant has the right to not publish the book.

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