Quantum Meruit Claims

Quantum meruit translates roughly to ‘what the job is worth’. In a legal context, these claims arise where a builder (or other contractor) does not receive payment for work performed and where a builder and the owner do not have an agreement in place.

In these cases, the law of equity comes to enable a builder (or contractor) to claim a fair and reasonable amount for the their work or material. It is important to understand, there are only limited circumstances when and how a party can claim for quantum meruit.

When can a quantum meruit claim be made?

• work is performed outside the scope of a contract, at the owner’s request and where the work is not captured by the contractual right to order variations;
• work has been performed on the basis that a contract will be entered into, but where no contract exists yet;
• the scope of work in the contract does not include an exact price or mode for its calculation;
• the work is completed, but the original contract no longer exists (because it is unenforceable, void or terminated);
• the contract is a lump sum contract payable on completion of the entire works, but only part of the work is completed;
• there is a contract, but no contract price is specified; or
• a contractor performs work under a mistake and the owner knowingly accepts the work.

What is a reasonable sum?

In determining a fair and reasonable sum, the following are considered:

• commercial value/market rates;
• site conditions;
• actual costs in performing the work (contractor’s invoices, etc);
• any guidance on price or formula in the contract;
• conduct of parties; and
• quality and standard of work.

The amount awarded to the builder (or contractor) will often depend on what is fair in the circumstances. This may mean that the builder (or contractor) may be entitled to the full amount charged for the work, their actual costs incurred only, or in some circumstances, nothing.

If you would like further to advice on your legal entitlements to payment or want more information, the Legal team are here to help. Please contact us on 02 6175 5900.