Compulsion or duress was involved in the payment or

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compulsion or duress was involved in the payment or where the money might otherwise be unjustly forfeited (as could be the case with excessive deposits). where the plaintiff is claiming ‘reasonable remuneration’ for work done, goods supplied or services rendered under void, invalid or partially performed contracts. In such cases because the plaintiff has no contractual entitlement to payment he or she can only recover a ‘reasonable remuneration’ via a quantum meruit. Quantum meruit Literally the term quantum meruit means ‘an amount which is warranted in the circumstances’. A quantum meruit can be awarded where the contract is silent as to the amount which is to be paid — in which case the quantum meruit is a reasonable price for what has been supplied — or where there is no contract governing what has been done. This can occur, for instance, when a contract has been frustrated before any entitlement to payment arises. In such cases, particularly if the work has proceeded on the basis of the new set of circumstances, recovery can only be on a quantum meruit rather than on the originally agreed contract price. See for instance, Codelfa Constructions v State Railway Authority which was discussed earlier in the context of ‘frustration’. The leading Australian case on restitution through the award of a quantum meruit is Pavey & Matthews v Paul (1987) 162 CLR 221. In that case the appellants had carried out some building work for Mrs Paul under a wholly oral agreement. Unfortunately the Builders Licensing Act 1971 (NSW) provided that building contracts were not enforceable unless they were in writing and signed by both parties. When the work was finished Mrs Paul refused to pay. Pavey & Matthews sued. The court held that, although the contract was unenforceable, Pavey & Matthews could still recover ‘reasonable remuneration’ as a quantum meruit. Their Honours found that Mrs Paul’s obligation to pay lay not in contract but in ‘restitution or unjust enrichment’. As Deane J. put it (at 263): All that [Mrs Paul] can be required to do is to pay reasonable compensation for work done of which [she] had received the benefit and for which in justice [she] is obligated to make such a payment by way of restitution. Summary and conclusion The law of contract is all about creating and enforcing binding agreements. The parties generally decide the content of their agreements and the law then intervenes only to ensure that they are carried out as agreed — or, if they are not, that the innocent party is adequately compensated for the guilty party’s default. This Study Guide has been
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© Stephen Graw 2012 concerned mainly with a broad overview of the fundamental common law and equitable rules (and some of the statutory variations of those rules) under which that happens.
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