Quantum meruit is not a term you would hear in your day-by-day, however, if your work in the construction industry may have heard this term a couple of times. In today’s Business Kitz blog post we are covering this term and considering how is it used in Australian legislation.
What is quantum meruit?
Quantum meruit is a Latin term that translates to “the amount he deserves” or “as much as he has earned”. It is an equitable remedy that compensates for unfair enrichment. In most circumstances, it refers to a demand for reasonable payment for services or goods provided to the defendant.
What is quantum meruit claim?
Now that we have understood what the quantum meruit term means, we need to know how this phrase is used in legislation. On certain occasions, there are tasks at your job that may not be included in the contract. As a result, there is no set payment amount for you to receive. In this scenario, you can submit a quantum meruit claim to seek compensation for the work done. The purpose of a quantum meruit claim is to provide a reasonable sum for work performed or products given without compensation.
When to claim quantum meruit?
A claim for quantum meruit cannot arise if the parties have agreed to pay a predetermined sum. In such cases, the parties relationship is governed by contract law. However, there are some conditions in which you may be qualified for a quantum meruit claim:
- The contract does not specify a price for the work to be done.
- The work you have done is not included in the initial work.
- The contract no longer exists because it is unenforceable due to being void, voidable, or frustrated.
- Although neither party has terminated the contract, some work has already been completed.
- If the work is done on heads of agreement rather than a contract.
What is a reasonable claim?
As previously stated, the purpose of a quantum meruit claim is that you can have the right to be paid for work that you have done but it wasn’t specified in your contract.
It is also critical that you gather proof (for example, receipts and invoices that illustrate the costs incurred from providing a service) since this can help demonstrate that the defendant was charged a reasonable amount for the conduct of your services. The following are the considerations that the court considers to produce the most equitable outcome:
- What is the commercial value of the job done?
- Whether or not the contract or articles of agreement specify a formula or procedure for calculating the value of work.
- The quality or value of the complete work.
Can the claim be declined?
There are certain cases when your quantum meruit claim can be declined. For example, if you agreed that you would only be paid for finished work, you may be barred from making a quantum meruit claim. Alternatively, you are ineligible if you perform additional work for which you agreed to receive no compensation. Furthermore, if you acted in bad faith, or you do not have enough proof of a job done, you are disqualified to file a quantum meruit claim.
In summary, when there is no predetermined amount for the labour completed, a quantum meruit claim might provide you with compensation. However, as recent instances have demonstrated, there are limitations to what you can claim. If you are unsure how to proceed, our sister company, Legal Kitz can assist you. Click here to book a FREE consultation with one of our highly experienced lawyers, or contact them at firstname.lastname@example.org or by calling 1300 988 954.