My students asked me what is meant by quantum meruit payments. Simply pu it means amount deserved. It generally applies to claims for a reasonable amount reflecting the cost of carrying out the works or providing goods or services or both.
A quantum meruit claim cannot be made if there is a contract between the parties to pay an agreed amount. Quantum meruit arise where parties have failed to agree to a price, or where a party have carried out work in the reasonable expectation of a contract being formed, but where agreement have never been reached as in cases of design and built work based on letter of intent. The latter situation is often referred to as falling within the law of restitution, or the doctrine of unjust enrichment.
The law of restitution ensure payment of reasonable price for goods or services rendered on circumstances where it is unjust to allow one party to be enriched at the expense of the other, and where the goods or services have been freely accepted.
The issues in quantum meruit can be highlighted in the recent case of Mowlem vPHI Group Ltd
where it was held that also Mowlem did supply materials to PHI but since these materials did not meet the specification ane were subsequently rejected, their claim should fail.
Monday, September 24, 2007
Wednesday, September 12, 2007
Wrongful Termination of Professionals
The star of 30th August 2007 reported the Federal Court decision in allowing the appeal of Arkitek Tenggara Sdn Bhd against developer Mid Valley City Sdn Bhd.
The facts of the case were were that in April6, 1984 Akitek Tenggara (AT) were appointed by MVCSB for a proposed comprehensive development opn 5 lots of land at Jalan Penghulu Mat, Kg Abdullah Hukum, KL. Their services were terminated in November that year. It claimed that the termination were unlawful as it was neither in breach of an express term or implied term of the agreement with the developer. Thery claimed professional fees and damages for wrongful termination of its services as an architect, and a breach of a contract.
MVCSB grounds for terminating was that the project had been aborted and it pleaded that its right to terminate the contract was implied by law. It also said that the letter of appointment had implied that the architect can be terminated if the project was aborted or delayed.
In December 1988 MVCSB wrote to LAM seeking assistance in seeking a letter of release from AT as well as to arbitrate for the fees amount. A month later LAM replied and advised MVCSB that if it really intended to terminate the architect's services, it should write a letter to AT clearly stating its intent.
In May 1999 the KL High Court awarded AT RM7.7m in fees due and damages and loss of profit. Unhappy, MVCSB appealed and in 2005 the Court of Appeal overturned the High Court ruling. AT appealed to the Federal Court and Justices Abdul hamid Mohamed, Abdul Aziz Mohamad and S Augustine Paul unanimously allowed the appeal.
Whatever the gounds of the ruling, the morale here is that work done must be paid, even if you want to abort the project. Time and money spent must be reimbursed.
The facts of the case were were that in April6, 1984 Akitek Tenggara (AT) were appointed by MVCSB for a proposed comprehensive development opn 5 lots of land at Jalan Penghulu Mat, Kg Abdullah Hukum, KL. Their services were terminated in November that year. It claimed that the termination were unlawful as it was neither in breach of an express term or implied term of the agreement with the developer. Thery claimed professional fees and damages for wrongful termination of its services as an architect, and a breach of a contract.
MVCSB grounds for terminating was that the project had been aborted and it pleaded that its right to terminate the contract was implied by law. It also said that the letter of appointment had implied that the architect can be terminated if the project was aborted or delayed.
In December 1988 MVCSB wrote to LAM seeking assistance in seeking a letter of release from AT as well as to arbitrate for the fees amount. A month later LAM replied and advised MVCSB that if it really intended to terminate the architect's services, it should write a letter to AT clearly stating its intent.
In May 1999 the KL High Court awarded AT RM7.7m in fees due and damages and loss of profit. Unhappy, MVCSB appealed and in 2005 the Court of Appeal overturned the High Court ruling. AT appealed to the Federal Court and Justices Abdul hamid Mohamed, Abdul Aziz Mohamad and S Augustine Paul unanimously allowed the appeal.
Whatever the gounds of the ruling, the morale here is that work done must be paid, even if you want to abort the project. Time and money spent must be reimbursed.
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