"Quantum Meruit" Explained

By
Commercial Real Estate Agent with RE/MAX West Realty Inc., Brokerage (Toronto)

"Quantum Meruit" Explained

 


By Brian Madigan LL.B.

The latin expression "quantum meruit" is one of the more popular expressions used in law today. Unfortunately, the meaning is not clear. The definition varies slightly from one legal jurisdiction to the next. This is largely based on the different legal decisions that have interpreted the term.

So what does it mean? Translated, it actually means "as much as he deserves". Traditionally, courts assessed a quantum of damages. Where work was performed pursuant to a contract but no agreement was reached on the amount, the Court would just determine what was fair. In some jurisdictions, "quantum meruit" is the court's method of calculating damages arising from a contract, when the contract is unclear.

That, however, is not the case in Canada. Quantum meruit has a slightly different meaning. It should be noted that the laws in the United States have had an independent source since 1776, and since that time the highest court of appeal was the Supreme Court of the United States. In Canada, the laws did not start until 1867, and the highest court of appeal was the Judicial Committee of the Privy Council of the House of Lords, until 1949, and thereafter, the Supreme Court of Canada.

Basically, that means that there is a closer relationship between the laws of Canada and those of England than the American relationship. And, hence the difference in meaning of the term "quantum meruit".

In England, as part of the development of law, there were two separate and distinct systems. There were common law courts. They dealt with matters of contract, real estate, property, the devolution of estates and other matters that arose within the common law system. It became clear that after a period of time, some decisions made based upon a strict interpretation of the law were just too harsh. Consequently, there were a number of equitable matters that were resolved in a parallel court system. These were Courts of Equity, and they had jurisdiction over equitable remedies. They operated out of a sense of "fairness".

In some cases, parties were first required to apply to one of the common law courts, and then if a further resolution was required they would apply to a court of equity for the appropriate remedy.

As time went by, The Courts of Common Law and the Courts of Equity merged into one court system. The jurisdiction of both court systems are exercised today by Ontario's courts.

A parallel equitable doctrine of law known as the law of restitution developed alongside contract law.

Here is what Blacks Law Dictionary, says about quantum meruit:

"Quantum meruit means "as much as he deserves". It is an expression that describes the extent of liability on a contract implied by law. It is an equitable doctrine, based on the concept that no one who benefits by the labour and materials of another should be unjustly enriched thereby. The law implies a promise to pay a reasonable amount for the labour and materials furnished, even absent a specific contract."

That definition appears to merge the two separate and distinct meanings of the term. No wonder law can be confusing!

The law of restitution includes the doctrine of quantum meruit. It is also sometimes known as the law of unjust enrichment.

Unjust enrichment offers two important remedies:

1) quantum meruit; and

2) a constructive trust.

While the law of restitution is similar to contract, quite clearly it is noted at the outset that there was no contract. That is the reason why there must be another body of law to respond to the claim.

That is the situation in Canada. Quantum meruit is an equitable remedy available to the courts when the courts are exercising their equitable jurisdiction under the law of restitution. In other jurisdictions, quantum meruit is a method of assessing damages in contract cases.

Brian Madigan LL.B., Realtor is an author and commentator on real estate matters, Royal LePage Innovators Realty
905-796-8888
www.OntarioRealEstateSource.com

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Rainer
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Bob Dunn
Homelife Glenayre Realty - Abbotsford, BC

I love these mini lessons Brain. They bring back memories of my undergrad studies. O f all the courses I took at university the two that affected my way of thinking were Law and Economics. 

February 05, 2010 12:07 AM #1
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Brian,

I actually used this defense to get paid. I baffled the other guy because he had no idea what I was talking about; the judge did though. I won.

February 05, 2010 12:09 AM #2
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Brian Madigan
RE/MAX West Realty Inc., Brokerage (Toronto) - Toronto, ON
LL.B., Broker

I will have about 50 or 60 by the time I'm finished. I will put them on my website.

The ones that are a little more interesting and well known, I publish to some of the groups here.

February 05, 2010 07:03 AM #3
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Jo-Anne Smith, Sales Representative
Oakville, ON
Oakville, Burlington and Mississauga Region Real E

Brian,

As always, very interesting...I can think of a few times when that would apply. Thanks for the history lesson on Canadian and American courts!

Jo

February 05, 2010 08:25 AM #4
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