Quantum Meruit in Construction: Getting Paid for Work Done Without a Signed Contract

Quantum meruit means 'as much as he has deserved'. In construction, it is the claim for a reasonable sum for work done when no binding contract price applies - typically under a letter of intent that never became a contract, for work outside the contract, or under a void or early-ended contract.

It pays for value delivered, not for the deal you expected to sign.

What Does Quantum Meruit Mean in Construction?

The phrase is Latin, usually pronounced KWON-tum MERR-oo-it, and sits with contra proferentem among the Latin terms in our guide to legal maxims in construction contracts. Unlike most of them, it is a route to money. It lets a contractor recover the fair value of work performed at the employer's request when no contract price governs that work.

That makes quantum meruit a fallback, not a strategy. Contractors reach for it when the paperwork has failed: the letter of intent expired, the subcontract was never signed, or the work strayed outside the contract. A claim can be valid and still disappoint, because a tribunal values the work from cost and evidence, not from the hoped-for price.

Letters of Intent: Where Many Quantum Meruit Claims Start

Many quantum meruit claims begin with a letter of intent. The employer wants design, mobilisation or long-lead procurement to start before the contract is settled. On GCC projects, where the formal contract often trails the site by months, that is routine.

The classic English authority is British Steel v Cleveland Bridge, where steel was supplied at the buyer's request while the parties still disputed whose terms applied, including liability for late delivery. Robert Goff J held that no contract had been concluded. In that situation, he said, 'the law simply imposes an obligation on the party who made the request to pay a reasonable sum for such work as has been done pursuant to that request'.

The UK Supreme Court reached the opposite result on different facts in RTS Flexible Systems v Molkerei Alois Muller in 2010. Work continued after the letter of intent expired and nobody signed the formal contract. Even so, the court held that the price and every essential term had been agreed, and that conduct had waived the need for signature. Its lesson was the need 'to agree first and to start work later'.

A contract can be unsigned and still binding. Contractors often assume that no signature means a reasonable sum. Where the price and essential terms are agreed and both sides perform, a tribunal may instead find a contract on the negotiated terms, liquidated damages and liability caps included.

Contractual vs Restitutionary Quantum Meruit

A contractual quantum meruit arises where a contract exists but does not fix the price. The law fills the gap with a promise to pay a reasonable sum. In England and Wales, section 15 of the Supply of Goods and Services Act 1982 implies that term into business contracts for services and makes reasonableness a question of fact. A letter of intent promising payment 'on a reasonable basis' does the same job expressly.

A restitutionary quantum meruit arises where there is no contract at all, as in British Steel. The law imposes it so that the employer cannot keep requested work without paying for it. No contractual caps or liquidated damages apply, but neither does any agreed price or payment cycle.

The distinction decides which rules travel with the money. A contractual quantum meruit sits inside a contract, so its time bars, caps and liquidated damages still apply. A restitutionary one sits outside any contract, so neither side can rely on terms it never secured.

Work Outside Scope, Void Contracts and Contracts That End

Quantum meruit appears alongside live contracts less often than contractors hope. Where a contract has a variation clause, such as Clause 13 of the FIDIC forms, instructed changes are valued by the contract's own rules. The contractor cannot step around that machinery to claim a more generous reasonable sum.

The gap opens mainly where requested work falls genuinely outside anything the contract contemplates - a separate building on another plot is the obvious example. If you consider an instruction to be a variation that the Engineer has not called one, act before you start the work.

Under the 2017 forms, the contractor must give notice immediately and before starting the work, and the instruction is deemed revoked if the Engineer does not respond in time. If the Engineer confirms it, or under the 1999 forms, follow the contract's notice and claim procedure, including the 28-day claim notice under Clause 20.1 (1999) or 20.2 (2017). Omissions raise their own question of loss of profit and overheads on omitted work.

A void contract leaves the same gap as an unsigned one, and quantum meruit usually fills it, although a contract void for illegality raises separate public policy questions. A frustrated contract under English law goes to statute instead. The Law Reform (Frustrated Contracts) Act 1943 lets the court award a just sum for a valuable benefit received before discharge, capped at that benefit's value.

Termination under FIDIC Clauses 15 and 16 is different again, because those clauses build a termination account that sets what you can recover when a contract is terminated. After an accepted repudiation, damages are the usual claim, and common law courts have differed on whether any alternative quantum meruit is capped by the contract price.

How Is Quantum Meruit Calculated?

There is no formula. In ERDC Group v Brunel University, a 2006 decision on work that continued after letters of intent expired, the court said there are no hard and fast rules.

Three measures recur:

1. Reasonable cost plus a margin - actual cost, including site and head office overheads if reasonable and not unnecessarily incurred, plus an appropriate addition for profit, where there was never any contract.
2. Market value for similar work - checked against published price books; a contractor that cannot show what the work cost is asking the tribunal to guess, and the employer may argue it should pay only the value the work gave it.
3. The contractor's own rates - in ERDC the contractor wanted its costs, but the judge applied its tender rates because they were commercial and the work had carried on as before. He agreed a contractor 'should not be better off as a result of the failure to conclude a contract' than if its offer had been accepted.

Your tender can become your ceiling.

Whichever measure applies, the employer does not pay for the contractor's own delay or inefficiency. On a QAR 8 million fit-out package started under a letter of intent, for example, competitive tender rates may simply be applied throughout, with any self-inflicted overrun stripped out.

Quantum Meruit in the GCC: Unjust Enrichment and the Civil Codes

GCC civil codes do not use the English law term, but they reach a similar destination by statute. Qatar's Civil Code, published in English translation on the government's Al Meezan legal portal, shows both routes.

Where a contracting (muqawala) agreement exists but the contractor's dues were never agreed, Article 699 fixes them by reference to the value of similar work at the time of the contract, plus the materials supplied.

Where no contract or other lawful cause justifies the benefit, Article 220 requires a person enriched without lawful reason to compensate the other's loss, but only to the extent of the enrichment. Article 221 bars the claim three years after the contractor became aware of its right, or fifteen years after the right arose, whichever comes first. Recovery is therefore the lower of the contractor's loss and the employer's gain.

Other GCC civil codes have their own provisions, and the UAE replaced its 1985 Civil Transactions Law with a new code in force from June 2026. Many GCC projects on FIDIC forms are governed by local law, so the governing law clause decides which route exists.

Working Before Signature: How Contractors Protect Payment

The problem is rarely the law. It is the paperwork nobody finished.

Four habits protect payment before signature:

1. Make the letter of intent state the scope, price basis, cap and expiry date, and how work is paid if no contract follows - tender rates, or cost plus an agreed margin. Those words are cheaper to negotiate before mobilisation than to prove in arbitration.
2. Diarise the expiry date and the cap, and extend both in writing before either is reached; a cap can outlive the date, as in Mowlem v Stena Line, where a contractor that kept working past the date in its letter of intent was still held to the letter's GBP 10 million cap for all the work.
3. Keep cost records that could prove a reasonable sum, by package and period, applying the same variation capture discipline to work you consider outside the contract.
4. Watch your conduct: invoicing against the draft's payment schedule, or agreeing changes to it without reservation, points toward the concluded contract that RTS found.

In ERDC, work done while the letters of intent were live was valued under the contemplated contract terms, not as a quantum meruit. If you reject the draft terms, say so at the time, not after most of the work is done.

If the work is already done and unpaid, settle first whether a contract exists. That single question fixes the basis of the claim, how it is valued and which defences the employer can run.

In CALIM's experience across dozens of engagements, the contractor arguing quantum meruit rarely chose to be there. The letter of intent lapsed quietly, nobody chased the signature, and the records were kept for a contract that never existed.

At CALIM, we track letter of intent caps and expiry dates as live obligations, and build and present reasonable-sum claims through our dispute resolution support when payment stalls.

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