Quantum meruit in Australia: how to claim fair payment when a contract fails

Getting paid for work should be simple. But when there’s no clear contract or when extra work falls outside the scope of the agreement, payment disputes can arise. That’s where quantum meruit comes in. It gives a legal path to claim fair pay when no formal contract covers the work. Whether you're a freelancer, contractor or business owner, knowing your rights can help you avoid unpaid work and resolve disputes with confidence.[ez-toc]

A quick guide to quantum meruit

Quantum meruit means “what one has earned.” It lets a person claim fair payment for work done when no valid contract exists. It applies if a job goes beyond the agreed scope, ends early or starts without a signed deal. This legal rule helps stop one party from unfairly gaining without paying for services received.

What is quantum meruit?

Quantum meruit is a legal concept that means “what one has earned.” It allows someone to be paid for work or services even if there is no valid contract in place. In simple terms, it’s about getting paid fairly for what you’ve done.This principle becomes important when a contract is missing, unclear, or no longer enforceable. For example, if you do extra work not included in the original agreement, or if the other party ends the contract early, you may still have the right to be paid. This type of claim is called a quantum meruit claim.Quantum meruit helps protect people and businesses from doing work for free when someone else benefits. It stops one party from being unjustly enriched at the expense of another. It is often used when there is no agreement on a final contract price, but work has already been completed.This type of claim often comes up in:

• Construction – builders and subcontractors who do extra work outside the original scope.
• Freelancing – designers, writers, and developers who start work before a contract exists.
• Consulting – professionals who provide advice or services without clear written terms.
• Trades and services – plumbers, electricians, and other workers dealing with sudden changes or verbal instructions.

Whether you're a freelancer, small business, or work in the construction industry, understanding quantum meruit can help ensure you’re fairly paid.

When quantum meruit applies and why it matters

Quantum meruit applies when one party provides work or services but cannot rely on a valid contract for payment. This may happen for many reasons. In these cases, the law steps in to make sure the person who did the work still gets paid fairly.

Common situations where quantum meruit applies

A claim in quantum meruit can arise in the following situations:

• No formal contract – Work is done before both sides agree to written terms.
• Unenforceable contract – The contract doesn’t meet statutory requirements or fails in some legal way.
• Termination – One party may terminate the contract early, but the other party has already completed part of the work.
• Extra work outside agreement – The parties agree on new tasks verbally, but the change is not included in the original contractual terms.

When any of these apply, the party who did the work may have a quantum meruit claim to recover a reasonable sum.

Comparing payment types

FeatureQuantum meruitContractual paymentBased onValue of the work or services providedPre-agreed contract priceWhen usedNo valid agreementA valid contract existsCourt focuses onFair market valueTerms of the contractRequires formal contractNoYesIncludes extras and changesSometimesOnly if included in original contract

Why it matters

Quantum meruit helps prevent unjust enrichment. It ensures that one party cannot benefit from the work performed by another without paying for it. The law says it is unfair to enjoy a service and refuse payment just because no formal contract was signed.

Example

A freelance web designer agrees to build a website. The client never signs the contract. The designer builds the site anyway and the client uses it. When the client refuses to pay, the designer can make a claim for quantum meruit. The court may decide the designer is owed a reasonable sum for the value of the services rendered.Quantum meruit helps uphold fairness when contracts fall short.

What makes a valid quantum meruit claim

To succeed in a quantum meruit claim, the person making the claim must meet certain conditions. Courts look at what happened, what was agreed on, and how much value was given.

Key elements of a valid claim

A claimant can bring a claim in quantum meruit when:

• The other party requested or accepted the services provided.
• The claimant expected to be paid for the work.
• There is no valid contract or the contract is unenforceable.

This applies in many situations. For example, if a client ends a contract early, or if the contractual terms are unclear, a claimant may still have a right to payment.

Checklist for a quantum meruit claim

Use this quick checklist to decide if a quantum meruit claim might apply:

• Was work or service done?
• Did the other party accept or benefit from it?
• Was there an expectation of payment?
• Was there no enforceable agreement or did the contract break down?
• Did the party doing the work suffer damage by not being paid?

If you tick all these, you may be able to claim a reasonable sum.

How courts assess the value

Courts look at:

• The value of the work completed.
• Time spent and skill level needed.
• The going market rate for similar work.
• How much the other party gained from the work.
• Whether the work was done under pressure or outside the agreed scope.

The goal is to make sure the other party is not unjustly enriched.

Key case example

In Pavey & Matthews Pty Ltd v Paul (1987), the High Court of Australia allowed a builder to recover payment. The builder completed work based on an oral agreement. However, the contract was not valid due to statutory requirements. The court found the client had been unjustly enriched, so the builder had a right to a fair payment under quantum meruit.This case shows how Australian law uses quantum meruit to provide a fair remedy when formal contracts fail.

How breach of contract differs from quantum meruit

Breach of contract and quantum meruit are not the same. Each one deals with payment disputes, but they apply under different conditions. It is important to know the difference before making a claim or taking legal steps.

Breach vs quantum meruit

A breach of contract happens when one party fails to follow the terms of a valid contract. This could include not paying, not finishing work, or doing something that breaks the agreement. If a contract exists, a court will look at the contractual terms to decide what the claimant is owed.A quantum meruit claim, on the other hand, applies when there is no enforceable contract. The person doing the work can still ask for a reasonable sum if the other party accepted the work or benefit.Here is a simple breakdown:FeatureBreach of contractQuantum meruitContract required?YesNoPayment based onTerms of the contractValue of the services renderedWhen it appliesContract is broken by one partyNo valid contract or unenforceableLegal focusLoss or damage caused by the breachFair pay for the work performedOutcomeAgreed sum or contract price enforcedReasonable payment decided by court

Different remedies and legal paths

In a breach of contract case, the court may order the other party to pay the debt, cover losses or fix the issue. The claimant must show that a contract existed, it was broken and they suffered damage.In a claim for quantum meruit, the goal is restitution. This means stopping one party from being unjustly enriched at the expense of another. Quantum meruit is rooted in the principle of fairness and balance.Understanding the legal path that fits your situation can help you prevent wasted time, effort and money. When in doubt, seek legal advice from a trusted legal professional.

The legal position of quantum meruit in Australia

Quantum meruit is recognised under Australian law as a way to claim fair payment when a formal contract does not apply. It is based on the idea that no party should be unjustly enriched at the expense of another. This remedy helps people and businesses recover the value of services provided or work performed when there is no clear contractual right to payment.

How it works in Australia

In Australia, quantum meruit claims are common in courts. The law allows a claimant to seek a reasonable sum for work or services if:

• The other party accepted the benefit.
• There was no valid contract, or the contract was unenforceable.
• The work was not done as a gift.

Courts look at fairness, not fixed prices. They assess the value of the work, market rates, and how much the other party gained.

State laws and key regulators

While the core principle is the same across states, each one may follow different rules. Some state-based construction laws affect how and when a quantum meruit claim can be made.Key regulators and bodies include:

• State civil and administrative tribunals (e.g. VCAT in Victoria).
• State building and construction commissions.
• The High Court of Australia (for legal precedent).

Global differences

In some countries, like the UK, courts may apply stricter views on quantum meruit. Other places may limit it to cases of full repudiation or termination. In Australia, courts give more room to use quantum meruit to prevent unfair outcomes.

Why compliance matters

To avoid disputes, it’s vital to understand local law. What works in one state may not apply in another. Always check the rules where you do business. Using clear written agreements can help you prevent problems and reduce risk. When in doubt, get trusted legal advice.Utilise Business Kitz to securely store key contracts and manage essential documentation. Get access to over 100 document and agreement templates, create and sign contracts, manage employee and contractor agreements and much more! Sign up for free today.

Common construction industry issues leading to quantum meruit

Quantum meruit often appears in the construction industry. This is because many jobs change during the build, and not all changes are documented. When this happens, a builder or contractor may still be owed money, even if the contract doesn’t cover the extra work.

Why claims arise so often

Construction jobs involve many moving parts, and things change quickly. When those changes are not recorded in writing, disputes can follow. A quantum meruit claim helps one party get paid when the work falls outside the original contract scope.Some common triggers include:

• Variations not documentedA builder adds extra features or finishes but doesn’t get them signed off.
• Scope creepThe client asks for more work during the build. The team does the work, but payment terms for extra work are not agreed in writing.
• Early terminationA party ends the contract early, but the builder has already done some work.
• Verbal instructions onlyA project manager tells the builder to do extra work, but no written agreement is signed.
• Repudiation of contractOne party refuses to keep going, and the other is left out of pocket.

Top 5 risk scenarios in construction projects

• Changes to plans or finishes without signed approval.
• Delays in written contract variations.
• Verbal approvals followed by payment refusal.
• Work done before contract signing.
• Project stops but partial work already completed.

Example: builder adds extra rooms

A builder is hired to construct a two-bedroom unit. Midway, the client asks for a third room. The builder agrees and finishes the extra work. The client refuses to pay, claiming the contract price was fixed. With no signed variation, the builder cannot claim under the contract. A claim in quantum meruit becomes the only way to recover costs.

How to manage risk

To reduce disputes, always:

• Get written sign-off on changes.
• Keep detailed records of costs and instructions.
• Use variation forms and templates.
• Confirm price changes in writing.
• Stick to clear contractual processes.

Good paperwork helps you enforce your rights and avoid needing a quantum meruit remedy in the first place. Securely store your contracts in Business Kitz Document vault to ensure you never lose your important documentation. Access your contracts from any device at any time simply by signing in to your account, and send and sign documents at the click of a button. Get started today!

Minimising damage and disputes before they happen

Many quantum meruit claims come from poor paperwork. If changes are not written down or agreed in writing, the risk of a dispute goes up. The best way to avoid problems is to plan ahead and use good systems.

Tips to prevent risk

These simple actions help parties stay clear of conflict:

• Document scope changesWrite down any work that falls outside the original contract. Include who requested it and when.
• Use variation formsGet clear approval for new work. Use a form that both parties can sign. Keep this with your contract.
• Confirm in writingIf the client agrees to something over the phone or in person, follow up with an email or written message outlining the key points of the conversation.
• Stick to signed contractsDon’t begin extra work until changes are confirmed in writing. Avoid verbal changes where possible.
• Track progress and costsKeep records of time, materials and labour. This helps show the value of the work if a dispute arises.

Example: Michael the Physio

Michael owns a busy physio clinic. He hires a builder to renovate the space. They agree to a two-room layout. Later, Michael asks for a third treatment room but doesn’t update the contract. The builder completes the extra work. When Michael refuses to pay the extra cost, the builder can no longer rely on the original agreement. With no updated contract price, the builder must file a claim in quantum meruit to get paid.

Making a claim for quantum meruit: step-by-step

If a contract falls through or the other party refuses to pay, you may need to make a claim in quantum meruit. This type of claim lets you ask for a reasonable sum for services provided or work performed. You need to follow the right steps and support your claim with strong evidence.

Steps to follow when making a claim

It is best to speak with a lawyer regarding making a quantum meruit claim. You can take the following steps to get a head start:

• Evaluate the work doneList what work or services you completed. Check how much was done after the termination or outside the contract scope.
• Collect all proofGather emails, texts, job sheets, timesheets and any verbal or written approvals. You must show that the other party asked for or accepted the work.
• Work out the valueBase your claim on the fair market rate. The court will not use the old contract price. Instead, it will look at what the work is worth. You need to show how you reached that amount.
• Try to settle firstTry to prevent going to court. Offer to talk things through or mediate. Many disputes settle faster and cheaper this way.
• Seek legal help if neededIf the other side won’t pay or refuses to talk, it may be time to get legal advice.

A claim for quantum meruit should always be your backup, not your first option. Good records and fair dealing often stop disputes before they grow.

When to seek legal advice in a quantum meruit dispute

Not every quantum meruit issue needs a lawyer, but some clearly do. If you are facing a large or complex dispute, speaking with a legal expert early can save time, money and stress. Legal advice helps you understand your rights and the strength of your claimant position.

When legal advice is essential

Call a lawyer when you deal with:

• Large sums of moneyIf the reasonable sum owed is high, mistakes could lead to big losses.
• Complex projectsIf the contractual work involved many changes or unclear scope, a lawyer can help untangle the details.
• Risk of court actionIf the other party threatens legal steps or you feel forced to file a claim, don’t delay.
• Questions about rightsIf you’re unsure whether a valid contract existed, or if the contractual terms support your case, get advice before making a claim for quantum meruit.

What legal support looks like

A lawyer will:

• Review your documents (emails, invoices, agreements).
• Tell you if a claim in quantum meruit is likely to succeed.
• Help prepare your claimant position.
• Explain the next steps if the party refuses to pay.
• Guide you through court or mediation if needed.

Having the right systems in place can help you minimise business risks. Business Kitz enables you to:

• Get digital signatures quickly.
• Store all records in one secure place.
• And many more features!

Good systems help reduce mistakes, improve the protection of both parties, and clarify obligations. This lowers the risk of repudiation, termination, or disputes down the track. When your paperwork is strong, you often prevent issues before they start. Sign up for a free Business Kitz trial today!

The role of consideration and intent in quantum meruit disputes

Quantum meruit focuses on fair payment when no clear contract exists. However, the idea of consideration and intention still plays a big part. These two terms help a court decide whether someone should pay for the work performed.

What consideration and intention mean

• ConsiderationIn contract law, this means something of value that each party gives or promises. It could be money, services or goods. Without consideration, a contract may not be valid.
• IntentionThis refers to whether both parties meant to form a legal deal. If they planned to be legally bound, even without signing a contract, the law may still treat their actions as a deal.

In quantum meruit cases, these ideas help judges work out if payment is fair and expected. Even if there is no signed contract, a party may still be entitled to a reasonable sum if the other side clearly accepted the work.

Example: when intent is unclear

A graphic designer sends a client a mock-up for a brand project. The client says they like it and asks for edits. The designer delivers the final files. Later, the client refuses to pay, saying there was no agreed sum or signed contract.Here, the court may find that the client accepted the services provided, showed intent to use the work and gave clear feedback. These facts support a quantum meruit claim, as they show intention and consideration in action.

The significance of quantum meruit for today’s business landscape

Quantum meruit has become more important in today’s work world. Many jobs now rely on fast, flexible deals. Freelancers, small businesses and service providers often start work before a full contract is signed. This can lead to confusion, disputes or unpaid work if things go wrong.

Why quantum meruit matters more now

Work styles have changed. So have the risks.

• Freelance and gig economyFreelancers often work off emails or messages. Many clients ask for quick results but delay signing formal agreements. This leaves workers exposed if payment terms aren’t clear.
• Remote and project-based workOnline projects move fast. Teams may be global. Clear roles and pricing can get lost if no one keeps strong records. If a contract is missed or terminated, the worker may still have rights under quantum meruit.
• Extra work outside the original scopeIn flexible projects, clients often ask for more work. Without a written update to the contract, this extra work may not be covered.

Risks and rights to know

• You risk not being paid if terms aren’t written down.
• A party who accepts work may still owe payment, even without a valid contract.
• A claimant may be able to recover a reasonable sum if they prove value and benefit.

Be proactive, not reactive

To prevent problems:

• Use clear contracts for every job.
• Confirm changes in writing.
• Save all key emails and approvals.

In a fast-paced business world, quantum meruit remains a key principle for fair pay. But ensuring you have good systems in place mean you may never need to use it.

Frequently asked questions about quantum meruit

What does understanding quantum meruit claims involve?

Understanding quantum meruit claims means knowing when you can ask for payment without a valid contract. You must show that work was done, the other party accepted it and that payment was expected. It helps make sure you receive fair compensation for the value delivered, even when no formal contract exists.

When can I make a quantum meruit claim?

You can make a claim when there is no valid contract or when the contract is unclear or unenforceable. This includes cases where extra work was done, the job ended early or the original agreement broke down. The circumstance must show that the other party accepted the benefit of the work.

What makes a strong quantum meruit case?

A strong case includes proof of the work done, proof that the other party accepted it, evidence that you expected to be paid, and evidence that you were not compensated. It helps if you can show time spent, cost of labour and market value. Clear records make your case stronger.

Can I claim if there was a verbal agreement?

Yes. If you completed work under a verbal deal and the other party accepted it, you may still have a claim. It’s crucial to show intent to pay and that the work had real value. Seek legal advice to get a better understanding of whether your case has grounds for quantum meruit.

Do I still need a contract if quantum meruit protects me?

Yes. A written contract is still the best protection. Quantum meruit is a backup if the contract fails or doesn't cover everything. Relying on it should not be your first plan.

Is legal advice needed for a quantum meruit claim?

In simple cases, you may not need legal help. But if the circumstance involves a large amount or complex work, it’s crucial to get legal advice. This can help you prepare your claim and avoid court. For best results, it is generally recommended to get legal assistance in any instance where you intend to make a claim and engage the legal system.

Protect your work and get paid fairly

Quantum meruit lets you claim fair payment when no valid contract covers the work. It applies when jobs fall outside the agreed scope, when deals are verbal or when a contract ends early. It helps stop one party from being unjustly enriched at the expense of another.But it should not be your first plan. It’s a safety net—not a solution to poor paperwork. Clear agreements and strong records are always better.To protect your business:

• Use written contracts from the start.
• Get changes approved in writing.
• Keep all documents in one secure place.

Business Kitz makes this easy. With ready-to-use contract templates and digital storage, you can stay organised and reduce risk. Sign up for free!Disclaimer: This content is intended to be used for educational and informational purposes only. Business Kitz does not offer legal advice and cannot guarantee the accuracy, reliability, or suitability of its website content for a particular purpose. We encourage you to seek professional advice from a licensed professional and verify statements before relying on them. We are not responsible for any legal actions or decisions made based on the information provided on our website.Unless expressly stated otherwise, all content, materials, text, images, videos and other media on this website and its contents are the property of their respective copyright owners.