The principle of Quantum meruit
Quantum meruit literally translates to "the amount one deserves" or "as much as one has earned". It is an equitable principle of law based on the concept that no one who benefits from the labor and materials of another should be unjustly enriched thereby; under these circumstances, the law implies a promise to pay a reasonable amount for the labor and materials furnished.
The principle prohibits a party who has received consideration from another in a transaction where the surrounding circumstances indicate that the said consideration was not intended as a gift. This principle is also known as Quasi-contract.
The use of this principle cannot be over-emphasized as it could be a game changer in litigation strategy over contractual disputes, arbitration, debt recovery, capital market transactions, labor disputes, property disputes, and intellectual property disputes. This principle if properly applied could help a party who has furnished consideration under a defective contract obtain some remedy from the equitable jurisdiction of the Law even though the purported contract upon which the said consideration passed is unenforceable. There are many factors that could make a contract that is prima facie valid become unenforceable, especially in complex commercial transactions. Thus, it is helpful to be armed with a legal remedy that would prevent a party who has parted with consideration to another from going home empty-handed based on technicalities.
The principle of Quantum meruit is delicate and must be well understood by lawyers who intend to use it in litigation. There are various intricate conditions that must be pleaded and proved to ground the claim.
A claim for quantum meruit cannot arise if the parties have a contract to pay an agreed sum. In such circumstances, the parties relationship is governed by the law of contract. However, a claim for quantum meruit may arise where the parties:
Have not agreed on a contract, or there is a so-called quasi-contract. For example, the parties may have agreed on some of the contractual terms but may have failed to reach an agreement on an essential term, such as price.
Have not fixed a price for the services or goods supplied.
Have an agreement to pay a reasonable sum for the services or goods supplied.
Have agreed on a scope of work under the original contract and the work carried out falls outside that scope
See the case of ALFOTRIN LIMITED vs. THE ATTORNEY-GENERAL OF THE FEDERATION & ANOR. 1996 SC.126/1989