Quantum meruit is a legal action that is based upon equitable compensation. Where contract there is the possibility for the breach of contract and there are five remedies for breach of contract and out of five remedies for breach of contract one is a suit upon quantum meruit.
|Quantum Meruit Meaning under Indian Contract Act|
What is Quantum Meruit Meaning in law?
What is Quantum merit meaning in law? Quantum meruit is the Latin term that is related to the Law of Contracts. Quantum meruit means "what one has earned" or "as much as he has earned. In other words, the quantum meruit means the actual value of the services rendered or performed.
Black Law Dictionary defines the quantum meruit meaning in law as "as much as one deserves".
The term quantum meruit can be seen in the quasi-contracts under section 70 of the Indian Contract Act, 1872.
Concept of Quantum Meruit
The concept of quantum meruit involves cases where one party gets a benefit and the other party gets nothing. In contracts, this is termed as benefit or enrichment which one party receives as a result of the other party’s act.
In simple words, when the party who has gotten the benefit unjustly must return it to the other party by who the benefits are provided. Such benefit is also known as Unjust Enrichment in the Law of Contracts.
For example, A is the daughter of Z and B is the son of Z. They entered into an agreement where Z asked A to provide health and medical expenses for him when he was sick. In return, Z promised that he will write any will in the favour of B and all his estate gives to A. Later Z died and left all his estates for his son and nothing for A. Here, Z was unjustly enriched the benefits from the services of A and in return A received nothing.
In this example, the quantum meruit can be applicable. A seeks to recover a portion of Z’s estate by claiming the remedy of quantum meruit.
Quantum Meruit under India Contract Act
The quantum meruit under Indian Contract Act can be seen in section 70 of the Act which states as "The obligation of the person enjoying the benefit of the non-gratuitous act – where a person lawfully does anything for another person, or delivers anything to him, not intending to do so gratuitously and such other person enjoys the benefit thereof, and later bound to make compensation to the former in respect of or to restore the thing so done or delivered".
In the case of Mahanagar Telephone Nigam Limited v/s Tata Communications, 2019 the Supreme Court of India has differentiated between the claims in the quantum meruit and the damages in the breach of contract.
The Hon'ble Supreme Court has to decide the question of whether the contract between the parties is valid or not and a claim on quantum meruit under section 70 of the Indian Contract Act, 1872 would be permissible or not.
The Hon'ble Supreme Court held that MTNL could claim the sum only which is stipulated in the contract and anything claimed more than this sum agreed in the contract should be refunded accordingly.
Suit for Quantum Meruit
Suit for quantum meruit is to give remedy to the aggrieved party when there is a breach of contract. Quantum meruit is seen under the provisions of quasi-contract and under section 70 of the Indian Contract Act, 1872. Whenever there is a breach of contract and to grant remedy to one of the parties is the suit of quantum meruit.
Suit upon quantum meruit arises when one party performed his part of the contract and then there is a breach of contract by the other party then the aggrieved party can claim quantum meruit under section 70 of the Act.
Difference between Quantum Meruit and Unjust Enrichment
The difference between unjust enrichment and quantum meruit is that the unjust enrichment is fine comes into the picture when there is a failure to pay for the services whereas the quantum meruit comes into the picture when the fair and reasonable amount should be paid to the aggrieved party.
Quantum meruit is the term which is given under section 70 of the Indian Contract Act, 1872. Quantum meruit supports the theory of equality of the parties and helps to ensure that any party gives services or goods then the party should get benefit out of this service or goods.