In this situation you are entitled to sue for Quantum meruit a Latin term generically meaning “what one deserves” or “what a job is worth”. Quantum Meruit is an action for payment or reimbursement of costs which were incurred, or the reimbursement of the reasonable value of the services performed. An action in Quantum Meruit will only arise when work has been completed by one party which provided a benefit to another, where no agreed value was determined and in most cases where , a contract had not been entered into.
Some examples of claims in Quantum Meruit are as follows:-
- Bob the Builder is a contractor. Sam is an owner of a house. Bob is asked by Sam to do work on a property. Bob and Sam do not enter into a contract, nor is a price agreed upon but a quote is provided. Bob ends up doing work on the property but the cost far exceeds that of the quote. Bob demands payment from Sam. Sam refuses to pay. Bob justifies the work based on the services and materials provided as well as the cost incurred. Bob would be able to claim from Sam the “reasonable value” of the work, being the cost of the materials and the reasonable labour costs incurred.
- Bob the builder is also the owner of Lot A. Sam is the owner of Lot B. Bob and Sam are discussing erecting a new boundary fence. Bob and Sam neither agree on the type of fence or a price. Bob constructs the boundary fence to his liking. Bob asks Sam for half of the cost of the fence but Sam refuses. Bob can then claim from Sam, the reasonable expense for that fence (usually in the case of a boundary fence, half) as Sam benefited from the fence.
The three elements in which the court will determine if a party has been unjustly enriched are:-
- Has a party been enriched by the receipt of a “benefit”;
- Was this “benefit” gained at the “expense of a contractor”; and
- Would it be “unjust” to allow the first party to retain the benefit.
What if there is a contract:-
Although most Quantum Meruit actions do not have contracts, an action can be brought in Quantum Meruit where a contract is still on foot. Some instances where an action can be brought are as follows:-
- There is no price fixed by the contract or pricing mechanism indicated;
- There is a quasi-contract (ie where someone starts work on a site whilst still negotiating the express terms of the contract);
- Work commencing outside of a contract (ie on building contracts where the owner requests of the contractor an additional item of work not specifically listed in the contract); or
- The contract on foot is determined void, unenforceable or terminated but work still resulted in a benefit.
Does it have to go to court?
Quatum Meriut cases need not only be run through a court but can also be run through Queensland Civil and Administrative Tribunal or the Small Claims Tribunal if the amount claimed is small.
In most cases, Quantum Meriut action’s aim to reimburse to a reasonable value, a contractor or individual for works undertaken. In some cases, they can be beneficial, in others; the reasonable value of the work may be estimated to be far less than what was claimed. Ultimately, if you receive a benefit for work undertaken, be prepared to pay the reasonable value of the work.