I. An example used in United States
law schools is usually the case of
Steven v Bromley & Son [1919]. • Facts • Shipowners agreed a charter fee for the transportation of steel billets • The charterers loaded general merchandise, in breach of the agreement • Issue :Could the ship owners be entitled to nominal damages only; or could a contract be inferred at a higher rate • Decision :Claim for beyond nominal damages allowed • Reasoning :A contract could be inferred such that the shipowners were entitled to the general rate for the ‘breaching’ cargo loaded.
II. Person A (
plaintiff in this hypothetical) tells neighbor B (
defendant) that he is going to build a wall on their property that will give a benefit to both A and B; A implies that it would be cheaper for both of them if A performs the labor instead of hiring a professional. B agrees that the wall should be built, but no price is negotiated. A builds the wall, and then asks B to compensate him for the benefit of the wall that he conferred on B (usually half the value of the wall). B refuses. A is entitled to some compensation based on
quantum meruit. This is because there was an implied promise between A and B, which is derived from contract law, because A was acting under the assumption that B would pay for part of his services (see
Estoppel). The winning of the case, or damages that would be agreed in any out of court settlement, will be directed as an assumpsit on a
quantum meruit.
Day v. Caton, 119 Mass. 513 (1876). :In
Canada,
quantum meruit is not based on contract law but rather depends on equitable principles of unjust enrichment. Canadian law generally upholds the old maxim that estoppel allows an implied promise to act as a shield against litigation but never a sword. Therefore an implied promise would not create a cause of action. Instead
quantum meruit is based on the need to prevent the neighbor from unjustly enriching himself by allowing the fence builder to proceed with the work based on an assumption that he would be compensated.
III. Quantum meruit can also apply where there is a
breached contract. :A contractor is contracted to work on a school. He does some work but then quits (breach of contract). He is entitled to be paid for the services he has already provided for the school on the basis of
quantum meruit (however the school may be entitled to damages if it can prove the balance of the works will at market rates cost more than the balance if performed by the earlier contractor; and in some jurisdictions inconvenience/loss of amenity damages especially where time is stated to be of the essence).
IV. If a contractor finds part of their work replaced by others through no fault of their own, they seek damages for the amount(s) that the defendant benefited. Third parties, absent provisions preventing, such as new contractors finding the work more complex as a result of defects may, just as with all equitable actions, like a quantum meruit-basis restitution, promptly to avoid the doctrine of
laches (equity) (having let matters lie) bring action against that contractor.
V. A promoter enters into a long-term service contract with a theatre to help book and organise shows for no one else for a few months. They take part-paid bookings for shows over these months but pass on none of that as agreed as they have grounds to allege the theatre is unsafe and the theatre need to make it safe. The theatre performs no repairs. Instead, the theatre terminates the contract before the benefit of the shows. After this the theatre runs most of the shows and gains benefit but does not pay the promoter. Some shows the theatre cancels without cause. A court would decide, following similar precedent, that the promoter is entitled to an assumpsit on a
quantum meruit if the promoter has acted in a proportionate way as trustee (depository), delaying forwarding of the principal of the ticket sale part-payments, for sufficiently well-founded premises defects which could have affected its reputation. ==Notable cases==