Quantum Meruit: A Remedy for Unjust Enrichment Under the Indian Contract Act

The principle of quantum meruit, meaning "as much as is earned" or "as much as is deserved," serves as a vital equitable remedy under the Indian Contract Act, 1872. It addresses situations where a party has rendered services or provided goods without a fixed contractual agreement or where the original contract becomes void or impossible to perform. This doctrine prevents unjust enrichment, ensuring that a party is compensated fairly for their efforts.

The concept of quantum meruit finds its roots in the landmark English case of Moses v. Macferlan (1760) In this case, Lord Mansfield established that the law will impose an obligation on a person to return money or benefits received under circumstances where it would be unjust to retain them. This principle, based on equity and good conscience, forms the basis for quasi-contracts and is reflected in Sections 68 to 72 of the Indian Contract Act.

Under Indian law, quantum meruit is invoked when a contract is discharged due to breach, frustration, or when services are rendered without a specific agreement. The aim is to provide reasonable compensation for the work done. For instance, if a contractor is prevented from completing a project due to the other party's fault, they can claim compensation for the work already done on a quantum meruit basis Similarly, if a contract becomes void due to impossibility, a party who has conferred benefits under the contract can seek restitution.

Section 70 of the Indian Contract Act, which deals with the obligation of a person enjoying the benefit of a non-gratuitous act, aligns closely with the principles of quantum meruit. It states that when a person lawfully does something for another or delivers something not intending to do so gratuitously, and the other person enjoys the benefit, the latter is bound to compensate the former.

To establish a claim under quantum meruit, the following conditions must be met:

1. The services or goods must have been provided without a gratuitous intention.

2. The other party must have accepted and enjoyed the benefit of those services or goods.

3. The circumstances must imply an obligation to pay.

The courts determine the reasonable compensation based on the value of the services rendered or goods supplied, considering factors such as the nature of the work, the time spent, and the prevailing market rates. This ensures fairness and prevents one party from unfairly profiting at the expense of another .

The application of quantum meruit underscores the Indian judiciary's commitment to equity and justice in contractual matters. It serves as a crucial safeguard against unjust enrichment, ensuring that parties are fairly compensated for their contributions, even in the absence of a formal agreement. By drawing upon the foundational principles established in Moses v. Macferlan, the Indian Contract Act provides a robust framework for addressing situations where contractual obligations are not explicitly defined, promoting fairness and preventing exploitation.