Unjust Enrichment vs Quantum Meruit: The Principle and the Remedy, When a Claim for a Reasonable Sum Lies, and How It Differs from Damages under the Indian Contract Act, 1872

Unjust enrichment and quantum meruit are frequently treated as alternatives, and they are not on the same plane at all. Unjust enrichment is the principle: the reason the law requires a benefit to be given back. Quantum meruit, literally as much as he has earned, is one of the remedies by which that principle is given effect, namely a claim for a reasonable sum for work done or services rendered. The relationship is between a justification and a measure. A claimant does not choose between them; he relies on the principle and asks for the remedy, and the practical questions are when the remedy is available and how it is quantified.

1. The Two Concepts

	Unjust enrichment	Quantum meruit
What it is	The principle that a benefit obtained at another's expense, which it is unjust to retain, must be given back	A remedy: a claim for a reasonable sum for work done, services rendered or goods supplied
Nature	A justification for imposing an obligation	A measure of recovery, and historically a form of action
Requisites	Enrichment, at the plaintiff's expense, unjustly retained	Work done or benefit conferred, non-gratuitously, in circumstances where no contract price governs
Scope	Underlies Sections 64, 65 and 68 to 72, and restitution generally	Arises principally under Section 70, and where a contract has ended or never came into existence
Measure	The benefit received by the defendant	A reasonable remuneration for what was done, assessed objectively
Relationship	The wider idea	One of the ways in which it is enforced

On a losing bargain the election can decide the whole claim

2. Where Quantum Meruit Arises

A quantum meruit claim is available where work has been done or services rendered and there is no enforceable contract price governing what is to be paid. Six situations recur.

Where the contract is discharged by the defendant's breach before the claimant has completed performance. He may either sue for damages on the contract, or abandon it and claim a reasonable sum for what he did.
Where the contract is void or was never validly concluded, as where the formalities of Article 299 of the Constitution were not complied with, so that the claim lies under Section 70.
Where the contract is silent as to price. Work done at a request, with no price agreed, carries an obligation to pay a reasonable sum.
Where work is done outside the scope of the contract, at the other party's request, so that the contract rate does not apply to it.
Where the contract has been frustrated after part performance, though in India the adjustment is made under Section 65, which reaches an advantage received rather than expenditure incurred.
Where a person has rendered services under an appointment or arrangement that turns out to be invalid, and the other party has taken the benefit of them.

📖 Planché v. Colburn, (1831) 8 Bing 14

Facts: A publisher engaged an author to write a volume on costume and armour for a series called The Juvenile Library, for a fee of one hundred pounds payable on completion. The author did substantial research and wrote part of the work. The publisher then abandoned the series altogether. The author sued.

Held: He was entitled to recover a reasonable sum for the work he had actually done. Where one party has prevented the other from completing performance by abandoning the contract, the injured party need not confine himself to the contract; he may treat the contract as at an end and sue on a quantum meruit for the value of the work performed.

Ratio: Where the defendant's own act prevents completion, the claimant may abandon the contract and recover a reasonable sum for what he has done. The claim does not depend on the contract price.

📖 Craven-Ellis v. Canons Ltd., [1936] 2 KB 403 (CA)

Facts: The plaintiff acted as managing director of a company under a written agreement providing for remuneration. The agreement was invalid, because neither he nor the directors who executed it had acquired the share qualification the company's articles required, so none of them was validly in office. He had nonetheless performed substantial services which the company had accepted. He sued for his remuneration.

Held: He recovered a reasonable sum on a quantum meruit. The obligation to pay did not arise from the invalid agreement, nor from any contract implied in fact, since the parties had intended the written agreement to govern. It was imposed by law upon the company, which had received and retained the benefit of the services. Greer LJ observed that the obligation is imposed by a rule of law and is not dependent on the consent of the person who is bound.

Ratio: A quantum meruit claim lies where services have been rendered and accepted under an agreement that turns out to be invalid. The obligation is imposed by law to prevent unjust enrichment and does not depend on any contract.

3. The Indian Route: Section 70

In India the principal statutory vehicle for a quantum meruit claim is Section 70, which requires that a person lawfully did something for another, not intending to do so gratuitously, and that the other enjoyed the benefit. The measure of recovery under the section is compensation, which the courts assess as a reasonable sum. State of West Bengal v. B. K. Mondal & Sons, AIR 1962 SC 779 is the leading application: a contractor who did work for the State under an arrangement void for non-compliance with Article 299 recovered compensation under Section 70, the claim resting on statute and not on the void contract.

⚠ Quantum meruit is not the contract rate

This is the point that decides the quantum in almost every case. A claimant on a quantum meruit is not suing on the contract, so he cannot recover the contract price as of right. He recovers what the work was reasonably worth, assessed objectively on evidence of the market rate, the nature and difficulty of the work, and the benefit conferred. The contract rate is evidence of what is reasonable and is often the best evidence, but it is not the measure, and a claimant who had made an improvident bargain cannot be held to it, just as one who had made an advantageous bargain cannot insist on it.

4. Quantum Meruit and Damages Compared

	Damages under Section 73	Quantum meruit
Basis of the claim	The contract, which is affirmed and sued upon	Restitution; the contract is set aside, void, or silent as to price
What is protected	The expectation: the position had the contract been performed	The value of what was done, as a reasonable sum
Loss or gain?	Measured by the claimant's loss	Measured by the value of the benefit conferred
Effect of a bad bargain	The claimant is held to it; he recovers only his contractual expectation	He is not held to it; he recovers a reasonable sum
Proof required	The loss and its causation and remoteness	The work done and its reasonable value
Mitigation	Applies, under the closing paragraph of Section 73	Does not arise in the same way; the claim is for value conferred
Availability	Only where there was an enforceable contract that was broken	Also where there was no enforceable contract at all

The election between the two can matter a great deal. Where the claimant made a losing bargain and has done substantial work, the quantum meruit may exceed what damages on the contract would yield, since damages would give him only the profit he would have made, which may be negative. Where the bargain was profitable and little work has been done, damages on the contract are usually larger.

5. Who May Claim

The party not in default, where the contract has been discharged by the other's breach, as in Planché v. Colburn.
A party who rendered services under a void or invalid arrangement, as in Craven-Ellis and in B. K. Mondal.
A party who did work outside the contract at the other's request.
In limited circumstances, the party in default, where the other party has taken the benefit of the partial performance and had the option of accepting or rejecting it. Where he had no such option, as with a building partly erected on his land, the claim ordinarily fails on the reasoning in Section 70 that the benefit must have been enjoyed with a real choice.
Section 65 supplies the route where a contract becomes void, requiring restoration of an advantage received, which is narrower than a quantum meruit because it reaches only a benefit actually received.

6. The Position Stated Shortly

Unjust enrichment is the principle; quantum meruit is one of the remedies that gives effect to it.
A quantum meruit claim lies where work has been done and no enforceable contract price governs.
The recurring situations are discharge by the other party's breach, a void or invalid contract, silence as to price, work outside the contract, and frustration after part performance.
Planché v. Colburn: where the defendant's abandonment prevents completion, the claimant may sue for a reasonable sum for work done.
Craven-Ellis v. Canons: services rendered under an invalid agreement and accepted give rise to an obligation imposed by law.
In India the statutory route is Section 70, applied to government contracts void for non-compliance with Article 299 in B. K. Mondal.
The measure is a reasonable sum and not the contract rate, though the contract rate is evidence of what is reasonable.
Damages protect the expectation and are measured by loss; quantum meruit is measured by the value of what was conferred.
The election matters most where the bargain was a losing one, since a quantum meruit is not capped by the contract price.

7. Related Topics and Provisions

Topic or provision	Connection
Doctrine of Unjust Enrichment	The principle, its requisites and its defences
Obligation of a Person Enjoying a Non-Gratuitous Act under Section 70	The Indian statutory route to a quantum meruit claim
Quasi-Contract vs Restitution	Where quantum meruit sits within restitution
Compensation on Rightful Rescission under Section 75	Quantum meruit as a remedy for breach
Section 70, Indian Contract Act	Lawful non-gratuitous acts and enjoyment of the benefit
Section 65, Indian Contract Act	Restoration where a contract becomes void
Section 73, Indian Contract Act	Damages, and the contrast in measure
Article 299, Constitution of India	Form of government contracts