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QUANTUM MERUIT




PROJECT WORK OF
LAW OF CONRACTS-I


Submitted to
Dr. Vijay Kumar Vimal
By
Sachin Kumar
959
B.A. LL.B.



CHANAKYA NATIONAL LAW UNIVERSITY
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ACKNOWLEDGEMENT
Writing a project is one of the most significant academic challenges I have ever faced.
Though this project has been presented by me but there are many people and websites who
remained in veil and the history of my browser, who gave their support and helped me to
complete this project.

First of all I am very grateful to my subject teacher Dr. Vijay Kumar Vimal without the
kind support and help and the threat of deduction of marks, the completion of the project
was a Herculean task for me. He gave his valuable time from his busy schedule to help me
to complete this project and suggested me from where and how to collect data.

I am very thankful to the librarian, and Sergey Brin and Larry Page, the inventors of google
who provided me several books and free online pdfs on the topic which proved beneficial in
completing (read copying and pasting) this project.

I acknowledge my friends who gave their valuable but utterly ridiculous advice which did not
prove to be useful at all and had to be completely ignored in writing this project. I want to
convey a most sincere thanks to my seniors for helping throughout the project.









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ACKNOWLEDGEMENT
Writing a project is one of the most significant academic challenges I have ever faced.
Though this project has been presented by me but there are many people who remained in
veil, who gave their support and helped me to complete this project.

First of all I am very grateful to my subject teacher Dr. Vijay Kumar Vimal without the
kind support of whom, the completion of the project was a Herculean task for me. He gave
his valuable time from his busy schedule to help me to complete this project and suggested
me from where and how to collect data.

I am very thankful to the librarian who provided me several books on the topic which
proved beneficial in completing this project.

I acknowledge my friends who gave their valuable and meticulous advice which proved to be
very useful and could not be ignored in writing this project. I want to convey a most sincere
thanks to my seniors for helping throughout the project.










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INDEX
Introduction...........................................................................................5
Aims and Objectives ............................................................................6
Research Methodology.........................................................................6
Breach of Contract................................................................................8
Remedies for Breach Of Contract.........................................................9
Quantum Meruit..................................................................................10
Conclusion...........................................................................................14
Bibliography........................................................................................15
















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1.INTRODUCTION
Quantum meruit is a Latin phrase meaning "what one has earned". In the context
of contract law, it means something along the lines of "reasonable value of services".
This is a subtopic under the heading Remedies for Breach of Contract.
According to s. 2(h) of the Indian Contract Act 1872, an agreement enforceable by law is
called contract.
Section 10 of the Indian Contract Act 1872 define the essentials of a contract
S.10 of the Indian Contract Act states -
What agreements are contracts.-
All agreements are contracts if they are made by the free consent of parties competent to
contract, for a lawful consideration and with a lawful object, and are not hereby expressly
declared to be void.
Contract law is based on number of Latin legal principles, out of which consensus ad idem
is the most important, which means a meeting of the minds between the parties i.e. an
agreement among them. It is said to be part of private law because it does not bind the state or
person that are not parties to the contract. Consequently, the contracts are voluntarily and
require an exercise of the will of the parties.

A contract an agreement between two or more persons, creating an obligation upon them to
fulfil or not to fulfil some duties laid down specifically in the agreement. The agreement
creates a legal relationship of rights and duties on the parties and if these obligations in the
agreement are not fulfilled, then action could be taken against the defaulting party in the court
of law.
1

Breach of contract is mentioned in the Indian Contract 1872 in section 2, 22 and the remedies
available are mention in section 73, 74, and 75 of the Indian Contract Act, 1872.
Quantum meruit is the measure of damages where an express contract is mutually modified
by the implied agreement of the parties, or not completed. While there is often confusion
between the concept of quantum meruit and that of "unjust enrichment" of one party at the
expense of another, the two concepts are distinct.

1
Remedies against Breach of Contract available at http://www.hg.org/article.asp?id=20711
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A claim in quantum meruit is usually an action to recover the reasonable value of services
rendered by one party to another
2
.
It is a equitable doctrine. The doctrine of quantum meruit is one part of the law of restitution,
more commonly known as the law of unjust enrichment. In the law of unjust enrichment,
there are two distinct, but related, remedies. This arises in cases of quasi-contract and
contracts where the price has not been negotiated beforehand. The element that is central to
the recovery of damages through the doctrine of Quantum Meruit is how much amount is
reasonable. Also in these cases, the facts of the case are often very important in determining
the extent of damages sustained and might be a reasonable sum to recover.
















2
Quantum Meruit available at http://www.law.cornell.edu/wex/quantum_meruit
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AIMS AND OBJECTIVES
The researcher aims to get abetter understanding of the doctrine of quantum meruit in the
context of the Indian Contract Act, 1872 through this research.

RESEARCH METHODOLOGY
The researcher has primarily used doctrinal method to research owing to the nature of the
topic. Journals, Books and online materials have been extensively used in the completion of
this project.
















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2.BREACH OF CONTRACT
A Breach of Contract occurs when a party thereto renounces his liability under it, or by his
own act makes it impossible that he should perform his obligations under it or totally or
partially fails to perform such obligations. A Breach of contract can be Anticipatory or
Present.

Breach of Contract leads to the infringement of the rights of the non-breaching party. Hence,
his rights are needed to be restored. For this various remedies are available to the aggrieved
party. Remedies available under Common Law are Damages. The main purpose of Damages
is to enable the innocent party to receive Monetary Compensation. Damages are awarded as
of right. They are calculated on the basis of looking at what the position of the plaintiff would
have been if the Contract had been properly performed. Monetary Damages can be
Compensatory, Consequential, Nominal or Liquidated.

There is another group of remedies available to the aggrieved party which are known as
Equitable Remedies. These are discretionary remedies at Equity and are only granted where
damages are not an adequate remedy. Equitable Remedies include Rescission, Restitution,
Specific Performance, Injunction, Quantum Meruit, Anton Piller Order,etc.
3


If the breaching party refuses to pay the Court ordered judgement, the court may issue Writ
of Attachment or Writ of Garnishment to enforce the remedies.

Section 73, 74 and 75 of the Indian Contract Act, 1872 deals with remedies and damages for
Breach of Contract.
A contract, being a fountainhead of a correlative set of rights and obligations for the parties,
would have no value if there were no remedies to enforce the rights thereunder.
The party committing the breach of contract is called the guilty party and the other party or
the victim is known as injured party or aggrieved party.


3
Remedies for Breach of Contract available at http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2042652

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3.REMEDIES FOR BREACH OF CONTRACT
When one of the parties makes a breach of contract, the following remedies
4
are available to
it under the Indian Contract Act, 1872 :-
Damages
Remedy by way of damages is the most common remedy available to the injured party. This
entitles the injured party to recover compensation for his loss suffered by him due to the
breach of contract, from the party which causes the breach. Sections 73 to 75 incorporate the
provisions in this regard. The major remedy available at common law for breach of contract
is an award of damages. This is a monetary sum fixed by the court to compensate the injured
party.
In order to recover substantial damages the innocent party must show that he has suffered
actual loss; if there is no actual loss he will only be entitled to nominal damages in
recognition of the fact that he has a valid cause of action.

Quantum Meruit
When the injured party has performed a part of his obligation under the contract before the
breach of contract has occurred, he is entitled to recover the value of what he has done under
this remedy. But Quantum Meruit is still an alternative to, rather than a form of damages. It
may be noted that this remedy is available only for the part of the work done by the party
other than the one making a breach of contract. If the party making breach of the contract has
done a part of the work in connection with it, he cannot claim anything in respect thereof
under this remedy
Specific performance and Injunction
Sometimes a party to the contract instead of recovering damages for the breach of contract
may have to recourse to the alternative remedy of specific performance of the contract, or an
injunction restraining the other party from making a breach of the contract. Provisions
regarding these remedies are contained in the Specific Relief Act, 1963.

4
Remedies For Breach of Contract, p.346, R.K. Bangya, Contract-I by Allahabad Law Agency
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4.QUANTUM MERUIT
Anson has defined the term Quantum Meruit in the following words:
5

If the injured party, the breach occurs, has already done, part though not all, of what he was
bound to do under the contract, he may be entitled to claim the value of what he has done. In
that case he has to sue upon a Quantum Meruit., He, however adds, Quantum Meruit is
still a remedy which is alternative to rather than a form of damages.
In the words of Alderson, B:
6

Where one party has absolutely refuse d to perform, or has rendered himself incapable of
performing his part of the contract, he puts it in the power of the other party either to sue for
breach of it or to rescind the contract and sue on quantum meruit for the work actually done.
It may be noted that this remedy is available only for the part of the work done by the party
other than the one making a breach of contract. If the party making a breach of contract has
done a part of the work in connection with it, he cannot claim anything in respect thereof
under this remedy.
Quantum meruit may be available only when the following conditions are fulfilled:
It is available only if the original contract has been discharged.
The claim must be brought by the party not in default.
In Puran Lal Shah vs. The State of U.P
7
., the Supreme Court of India reaffirmed the above
principles. The Supreme Court observed:
The principle of quantum meruit is rooted in English law under which there were certain
procedural advantages in framing an action for compensation of work done. In order to avail
of the remedy under quantum meruit, the original contract must have been discharged by the
defendant in such a way as to entitle the plaintiff to regard himself as discharged from any
further performance and he mustve elected to do so. The remedy, it may be noted is,

5
P. 505, Beatson, Jack; Burrows, Andrew; Cartwright, John, Ansons law of Contract 29
th
ed. , Oxford
University Press

6
Hadley v Baxendale [1854] EWHC J70
7
AIR 1971, SC 712
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however, not available. To the party who breaks the contract even though he may have
partially performed part of the obligation. The remedy by way of quantum meruit is
restitutory that is a recompense for the value of the work done by the plaintif in order to
restore him to the position to which he wouldve been if the contract had never been entered
into. In this regard it is different to a claim for damages which is compensatory remedy aimed
at placing the injured party ,as near as may be in the position he would have been in, had the
other party performed the contract.
In this case, the plaintiff ah submitted a tender for the construction of 3 miles of National
Bhowali road at 13% below the rates mentioned in a certain schedule issued by the
government of United Proviences on 13
th
Sptember 1943. His tender was accepted. Later on
he claimed higher rates on account of certain reasons such that hard slab of rock coming in
the way, and non-fulfilment of the condition that stone would be available at a particular
distance.
The High Court had disallowed the claim of the appellant for higher rates for being in fact by
way of damages. The appellants, therefore filed an appeal in the Supreme Court . The
Supreme Court quoted with approval the principle enunciated by it in an earlier case namely
Alopi Prasad and Sons Ltd. vs. The Union of India
8
which was as follows:
Compensation quantum meruit is awarded for work done or services rendered when the
price thereof is not fixed by a contract. For work done or services rendered pursuant to the
contract compensation quantum meruit cannot be awarded where the contract provides for
contract provides for consideration payable in that behalf.
Referring to the above case, the Supreme Court said, though in that case the basis of that
principle was not explained, it nevertheless lays down that where work is done under a
contract pursuant to the terms thereof no amount can be claimed by way of quantum meruit
thereof.
9

Ordinarily, if a person, having agreed to do some work or render some services, has done
only a part of what he was required to do, he cannot claim anything for what he has done.
When a person agrees to complete some work for a lump sum, non-completion of the work

8
AIR 1960 SC 588
9
Puran Lal Shah vs. The State of U.P. AIR 1971 SC 712 at p. 716
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does not entitle him to any remuneration even for the part of the work done. But the law
recognises an important exception to this rule by the way of an action for quantum meruit.
Under this action, if A and B have entered into a contract, and A, who has already performed
a part of the contract is then prevented by B from performing the rest of his obligation under
the contract, A can recover from B reasonable remuneration for whatever he has already
done.
It may be noted that this action is not an action for compensation for the breach of contract
by the other side. It is an action which is alternative to the breach of contract. This action in
essence is one of restitution, putting the party injured by the breach of contract in a position
in which he would have been, had the contract not been entered into. It merely entitles the
injured party to be compensated for whatever works he may have already have done, or
whatever expense he may have incurred. This is an example of Quantum Meruit.
The remedy by way of quantum meruit is not a contractual remedy although in some cases
the remedy is available on the breach of contract by a party to it. The real nature of the
remedy is quasi-contractual. The remedy has, therefore been held available when the work
has been done by the plaintiff under a void agreement.
In Cravan-Ellis vs. Cannon Ltd., the plaintiff was appointed the managing director of a
company and he was to be paid certain remuneration for his services. The agreement his
appointment was void because contrary to the Articles of Association, he and the other
directors, who had appointed him, had failed to take the qualification shares within the
prescribed time limit. The plaintiff however, continued to render services to the company. It
was held that though the contract was void and the plaintiff could not claim anything on that
basis, he was still entitled to recover for the services rendered by him on his claim of
quantum meruit.
Greer, L. J. observed:
The obligation to pay reasonable remuneration for the work done when there is no binding
contract between the parties is imposed by the rule of law, and not by the inference of facts
arising from the acceptance of services or goods. It is one of the cases. It is one of the cases
referred to in books on contracts as obligations arising quasi ex contractu.

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A similar case in India was that of the Associated Cement Co. Ltd. Vs Union Of India
10
.
In Associated Cement Co. Ltd. Vs Union of India, the railways authorities charged excess
freight from the appellant on the supposition that cement from one of the appellants factories
is to be carried by a longer route. The good were, in fact, carried by a shorter route. The
excess fare charged was because of a mistake and, therefore the contract was void ab initio.
It was held that the appellants could claim he excess amount paid by them and the
respondent, i.e. , the Railway authorities could retain the freight for carrying the goods to
actual distance on the basis of application of the doctrine of quantum meruit.
In M/s Patel Engineering Co. Ltd. Vs. Indian Oil Corporation Ltd. , it was held that
Quantum Meruit is based on a quasi-contract and arises in a sense on an implied contract
and not on any expense agreement ...... where a party to a contract has wholly or partially
performed his obligation he may neglect the contract and sue upon the doctrine of quantum
meruit. But while this contract has not been neglected or repudiated and a claim is based
upon the terms of the contract, the principle of quantum meruit cannot be invoked.
11













10
AIR Pat 212 at p. 219
11
AIR Pat 212 at p. 360
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5.CONCLUSION
Thus in the above chapters the researcher aims to clear the concept of quantum meruit. As we
have seen before, a breach of contract occurs when one of the parties fails to perform the
functions he is obligated to perform through the contract. And this breach leads to loss or
damages to the other party to the contract.
So the law of contracts provides provision of recovery of damages from the other party
through other means. The Indian Contract Act provides for relief and damages under sections
73, 74 and 75 of the Indian Contract Act, 1872. Also the Specific Relief Act, 1963 provides
for filing suits and injunctions. The method of recovery of damages can be done through
these three means: damages, quantum meruit and specific suits for injunction.
Damages are the most common way to achieve monetary compensation for the loss or
damage suffered. In this case, the court awards certain fixed amount in lieu of the damages
incurred by the other party.
Now the doctrine of quantum meruit comes into place. Quantum Meruit literally means what
one has earned in Latin. In the language of law, it basically means the remuneration that one
deserves for whatever work has been done, whether partially or fully in the contract.
In this the plaintiff usually recovers damages for the amount of work done or services
rendered for the contract before the contract gets breached. It is also available in cases where
the contract might have been void ab initio. This relief is only available to the party who is
not in default in the case of breach of contract. Also, it can only be brought when the original
contract, whether void or not, has been discharged.
It is primarily a restitutive law, having its origins in English law, which seeks to restore the
plaintiff to the position he might have been had he never entered into the contract.
Also compensations by the way of Quantum Meruit are awarded when he price has not been
fixed in the contract. When the contract provides consideration for the services rendered, it is
not given.



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BIBLIOGRAPHY
1. Beatson, Jack; Burrows, Andrew; Cartwright, John, Ansons law of Contract 29
th
ed. ,
Oxford University Press
2. Bangya, R.K. , Contract-I, Allahabad Law Agency
3. Kapoor, S.K., Contract-I and Specific Relief Act, 12 ed. , Central Law Agency
4. Bare Act, The Indian Contract Act,1872, Universal Law Publishing Co. Pvt. Ltd.
5. www.icai.org
6. http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2042652
7. http://www.slideshare.net/search/slideshow?searchfrom=header&q=quantum+meruit
8. http://www.lawyersclubindia.com/articles/QUASI-CONTRACT-A-
COMPREHENSIVE-STUDY-OF-SITUATIONS--3079.asp#.U1sdo1WSzqN