Quantum meruit, a Latin phrase which can be roughly translated as "as much as deserved," refers to the compensation which someone is entitled to for providing goods and services with an expectation of payment. If someone is not compensated, the issue can be taken to court and the court can award damages on the basis of quantum meruit. These damages cannot exceed the reasonable amount to which the person is entitled; people cannot be compelled, in other words, to pay more than something is worth in restitution.
This concept often comes up in cases in which there is an implied promise to pay, but no explicit agreement is made. It can also occur when a contract is breached, or in a situation where people have a quasi-contract. In all cases, even if there is no formal agreement to pay or if the terms of a contract have been suspended as a result of a breach, people are still entitled to payment under quantum meruit.
This is designed to prevent unjust enrichment, in which people benefit from products and services at the expense of someone else. For example, if a contractor is working on a deck and quits partway through, breaching the agreement, the contractor is still entitled to compensation for the materials used in the deck under quantum meruit. Of course, the homeowner can also sue for breach of contract and recover damages from the contractor, since the homeowner will need to find another contractor to finish the job.
The amount awarded in such cases must be reasonable. The court considers the costs claimed by the party seeking restitution and arrives at a judgment it thinks is fair, based on the situation and the real world value of the products and services provided. As mentioned in the previous example, receiving restitution under quantum meruit does not insulate people from liability for breach of contract, and it is possible to be countersued by the respondent.
In order to avoid cases in which people must sue for restitution, it is advisable to make contracts for situations in which one party is providing goods and services and for those contracts to specifically spell out terms in the event of a breach. This will reduce time spent in court in the event that the contract needs to be broken, and provide security for both parties involved in the arrangement. A lawyer can assist with the process of developing an appropriate contract and confirming that the contract is structured properly.