Quantum meruit is a Latin term meaning "as much as he has deserved". In construction, it is a claim for a reasonable payment for work done where there is no agreed price, or where the contract does not cover the work. It rests on fairness: the contractor did the work with the other party's knowledge and expectation of payment, so the other party should pay for it.
Worked example
A groundworker starts a drainage diversion on the Client's verbal instruction, on the basis that a price will follow. No order is signed and no price is agreed. The work takes 6 days with a crew of three, plus plant and materials. A dispute arises over the final price, and the client refuses to pay the £14,400 invoice. A reasonable sum is worked out from the cost of the work and a market rate.
| Item | Amount |
|---|---|
| Labour, 18 man days at £260 | £4,680 |
| Plant hire | £2,200 |
| Materials | £3,700 |
| Overheads and profit at 20% | £2,116 |
| Reasonable sum | £12,696 |
The contractor can recover a reasonable sum, which might be lower than the invoice. It does not get its preferred price.
When it applies
A quantum meruit claim is typical where work starts before terms are agreed, where a contract is found to be unenforceable or ends early, or where the work falls outside the scope of the agreement. It is not available where there is an enforceable contract that already sets the price for the work. In that situation, the contract rates or the Variation Valuation rules apply.
Quantum meruit in the cost report
The claim is only as strong as your cost records. Without a signed order or agreed rate, timesheets, delivery notes, Supplier invoices and dated instructions become the evidence of what was done and what it cost.
Record unagreed work as its own item in the CVR, value it prudently, and do not count it as income until it is agreed or decided. Where possible, get a written instruction and a price or a day rate before starting. That removes the need for a quantum meruit argument.
Related terms
Variation, Valuation, Final Account, Subcontractor.
Planyard's subcontractor orders put a signed order and agreed rate in place before work starts, so a reasonable-sum argument rarely has to be made.
