Quantum meruit claims in the Construction Contracts
Ramasubramanian Ammamuthu
Construction Arbitration / Counsel | Expert Witness | Advocate| Arbitrator | Mediator | Member #IBA | ODR Neutral.
Quantum meruit is a Latin term that translates to "as much as he deserved" or "as much as is deserved." In legal contexts, it refers to a legal principle that allows for the recovery of reasonable value for services rendered or work done, even in the absence of a formal contract or agreement specifying payment terms.
Here's how quantum meruit claims typically work:
Quantum meruit claims commonly arise in various situations, including:
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Overall, quantum meruit provides a legal remedy to ensure fairness and prevent unjust enrichment when parties have benefited from services or work performed by another party, even in the absence of a formal contract. It allows for the recovery of a reasonable value for the services rendered, promoting equity and justice in contractual relationships.
Delhi HC in its recent decision in the case of ???????? ???? ???????????? ???????????????? ??????????????- ?????? ????- 2023 has reaffirmed the arbitrator’s reasoning, rooted in Section 70 of the Indian Contract Act.
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5 个月Quantum Meruit impacts construction contracts by allowing recovery of reasonable value for services rendered or work done, even without a formal contract. This principle is particularly relevant in scenarios where contracts are absent or unclear, ensuring fair compensation for parties involved. In order to appreciate the salutary benefit of this doctrine in BSNL case (OMP (COMM) No.405 of 2023) (DHC), useful reference to the facts is made. On 25.4.2017, the bid of respondent was accepted. On 1.3.2018, the respondent was directed to start all preparatory actions and to give unconditional acceptance for field test of live traffic. This was accepted and Advance Purchase Order was sought. It was issued on 21.3.2018. The respondent acted upon the APO and deployed resources. However, the petitioner did not issue Purchase Order but on 10.2.2020, withdrew APO also. The claim for various losses in view of illegal withdrawal of APO was made. The important issue – Whether the claimant was entitled to payment although no concluded contract had come into existence in the form of issuance of Purchase Order. This is how the doctrine of Quantum Meruit in Section 70 of the Contract Act invoked and employed in aid of the claimant.?
Short and sharp explanation. Excellent work. From a practical perspective, use it as an alternative to a claim under a contract which was varied so much it no longer reflects the original agreement. I.e. in a recent case of ours, the entire project was relocated to another site for which the client had no building approval after the suicide of the client’s representative (true story), the lack of building approvals made the contract unlawful and therefore invalid. On another case, the developer failed to formally approve the changes to the project but got the benefit of our client’s work, hence we filed a quantum meruit claim.