Key Takeaways
- A quantum meruit claim may be available for work performed before a contract was terminated only where no contractual accrued right to payment had arisen; if payment had already become due under the contract, the claimant must generally rely on that contractual entitlement.
- Following Mann v Paterson Constructions Pty Ltd [2019] HCA 32, restitution for work done is unavailable where the contractor already has an accrued right to payment, and where restitution remains available it is ordinarily capped at the contract price allocated to the relevant work.
- Victorian courts first ask whether a contractual right to payment had accrued and whether termination for repudiation was validly accepted; only where no accrued contractual payment right exists will restitution (quantum meruit) be considered.
- Contemporaneous records and valuation evidence (contracts, scope documents, progress claims, timesheets, invoices, site records, expert reports, photos) are critical to separate completed, incomplete and defective work and to quantify any quantum meruit claim.
- Practical steps: identify the correct cause of action (contractual debt, damages or restitution), analyse payment/milestone/variation/termination clauses (and applicable statutes like the Domestic Building Contracts Act 1995 (Vic)), preserve evidence, and obtain early legal advice—unjust enrichment cannot be used to escape an unfavourable bargain.
Can you make a quantum meruit claim after a contract is terminated?
A quantum meruit claim Victoria businesses pursue may be available for work performed before a contract was terminated where no contractual right to payment had already accrued.
If payment had already become due under the contract, the claimant must generally rely on that contractual entitlement. Where restitution remains available, recovery will ordinarily be limited by the contract price allocated to the relevant work.
- An accrued contractual payment right will generally prevent recovery through quantum meruit for the same work.
- The contract’s milestones and payment clauses will determine when an entitlement accrued.
- Quantum meruit cannot ordinarily be used to escape agreed pricing or payment conditions.
The available claim will depend on the contract, the work completed and whether the termination was legally valid.
When a contract ends before completion, a business may seek payment for the value of work already performed through a quantum meruit claim in Victoria. However, the remedy is narrower than it once appeared. Following Mann v Paterson Constructions Pty Ltd [2019] HCA 32, restitution for work done is unavailable where the contractor already has an accrued right to payment. Where restitution remains available, there is effectively a cap at the contract price, meaning the claimant cannot recover more for the relevant work than the amount allocated to it under the agreement.
These principles are particularly important for business owners, directors and professional service providers involved in building and services disputes, where work may have been completed across several stages before repudiation and termination. The available claim will depend on the payment structure, the timing of termination, and whether the contract has already fixed the amount payable for the completed work.
A claim based on unjust enrichment is not an alternative route around an unfavourable bargain. It is a limited restitutionary remedy that may arise only where the contract does not already govern payment for the relevant performance.
What Is the Legal Framework for a Quantum Meruit Claim After Contract Termination in Victoria?
A quantum meruit claim in Victoria is primarily governed by the common law of contract and restitution rather than by a single statute. In domestic building matters, however, the Domestic Building Contracts Act 1995 (Vic) can materially affect recovery. Section 38 regulates claims for variations, while section 40 limits the progress payments that may be required at specified stages unless the contract lawfully departs from the prescribed structure. These statutory requirements cannot necessarily be avoided by reframing the claim as restitution for work done.
The leading authority is Mann v Paterson Constructions Pty Ltd [2019] HCA 32. The High Court rejected the proposition that termination for repudiation automatically allows the innocent party to disregard the contract and recover the market value of all work performed. Instead, the court must separate work for which an accrued right to payment had already arisen from work performed before termination for which no contractual payment right had yet accrued.
Where the contract has already created a right to payment, the claimant must rely on that contractual entitlement. A restitutionary claim is not available merely because a valuation based on reasonable value would produce a better result. For incomplete stages where no payment right had accrued, recovery may still be available, but there is ordinarily a cap at the contract price allocated to that work. The contract therefore remains central to valuation even after repudiation and termination.
Earlier decisions remain relevant but must now be read consistently with Mann. In Pavey & Matthews Pty Ltd v Paul (1987) 162 CLR 221, the High Court recognised restitutionary recovery for work accepted in circumstances where payment was expected. The principles of restitution and unjust enrichment do not create a general power to award what appears fair. A claimant must establish a recognised legal basis for restitution, including that the defendant received a benefit in circumstances where the law requires payment.
In Sopov v Kane Constructions Pty Ltd (No 2) [2009] VSCA 141, the Victorian Court of Appeal assessed the reasonable value of construction work following termination for repudiation. Its broader approach to valuation has since been constrained by Mann, particularly where the amount claimed exceeds the contractual allocation for the relevant work.
How Do Victorian Courts Assess a Quantum Meruit Claim After Termination?
Has a contractual right to payment already accrued?
The first issue is whether the claimant had already earned payment under the contract before termination. Where an accrued right to payment exists, the claim will be pursued as a contractual debt rather than as restitution for work done. This depends on the payment structure, including whether payment is triggered by a stage, milestone, time period, or completed service.
In building and services disputes, substantial work may have been performed without completing the contractual stage that gives rise to payment. That distinction identifies whether the claimant must rely on the contract or may still consider quantum meruit.
Was the contract validly terminated for repudiation?
A claimant relying on repudiation and termination must prove that the other party repudiated the contract and that the repudiation was validly accepted. Repudiation usually requires conduct showing an unwillingness or inability to perform an essential obligation or the contract as agreed.
A delay, disputed invoice or isolated breach may not be sufficient. If termination was unjustified, the terminating party may itself have repudiated the contract. Courts therefore examine the parties’ contractual termination rights, including notice requirements, cure provisions, correspondence, and conduct leading up to termination.
Is restitution available for the relevant work?
A quantum meruit claim in Victoria cannot ordinarily replace an existing contractual entitlement merely because a reasonable-value assessment may produce a higher return. Restitution is considered only for work where the contract has not already created an enforceable payment right.
The court must also identify a recognised basis for recovery. Unjust enrichment does not give judges a general power to award what appears fair. The claimant must show that the defendant received a benefit in circumstances where the law permits restitution.
How is the value of the work assessed?
Where quantum meruit is available, the court may consider market rates, labour and material costs, invoices, expert evidence, the quality of performance, defects, and incomplete work. The contract price remains central because it records the value the parties agreed for the promised performance.
Following Mann v Paterson Constructions Pty Ltd [2019] HCA 32, there is ordinarily a cap at the contract price attributable to the relevant work. Restitution cannot be used to escape an unfavourable bargain or recover more merely because the claimant’s actual costs exceeded expectations.
What evidence do courts require?
Contemporaneous records are usually critical. Contracts, scope documents, variation approvals, progress claims, timesheets, invoices, site records, and expert valuation evidence can help separate completed, incomplete, and defective work.
That evidence allows the court to determine whether the claim lies in contract, damages, or restitution, and to value the work without relying on unsupported estimates.
What Common Disputes Arise When a Contract Ends Before the Work Is Complete?
Disputes commonly arise where a contractor, consultant or service provider has performed substantial work, but the contract ends before the next payment milestone is reached. In these matters, the central issue is often whether the claimant has an accrued right to payment, damages claim for breach, or a limited entitlement to restitution for work done.
In construction matters, the dispute may concern a partly completed stage, unpaid variations or work performed outside the original scope. The principal may argue that no payment is due because the contractual stage was incomplete, while the contractor maintains that the benefit of the work has been retained. These claims require careful separation of completed contractual work, approved variations, defective work, and incomplete items. The presence of a cap at the contract price also means that evidence of higher labour or material costs will not necessarily increase the amount recoverable.
Professional and commercial services disputes often involve a different payment structure. Accountants, consultants, technology providers, and project advisers may work under monthly retainers, milestone fees, or blended arrangements. When repudiation and termination occur part-way through an engagement, the parties may disagree about whether payment accrued progressively or only on delivery of an outcome. The wording of the payment clause, scope document, and variation process is usually decisive.
Has your contract ended before you were paid for completed work?
Your entitlement may involve a contractual debt, damages following repudiation or a limited claim for restitution. The correct approach depends on the payment terms, termination process and evidence of the work performed.
Book a Confidential ConsultationAnother recurring issue is the attempted use of unjust enrichment as a fallback claim where the contractual case is weak. Courts will not permit a claimant to avoid agreed pricing, risk allocation, or payment conditions simply by asserting that the other party received a benefit. A quantum meruit claim in Victoria must be tied to work for which the contract does not already provide an enforceable payment right.
Valuation disputes can be equally significant. Parties often rely on competing expert assessments of market rates, percentage completion, defects, and rectification costs. In building and services disputes, poorly maintained records can materially weaken an otherwise arguable claim. Progress reports, timesheets, variation approvals, invoices, site photographs, and contemporaneous correspondence are therefore not administrative detail. They are often evidence that determines whether recovery is available and how the value of the work will be calculated.
What Should a Business Consider Before Pursuing or Defending a Quantum Meruit Claim?
Before commencing a quantum meruit claim in Victoria, the first task is to identify the correct legal cause of action. A claimant may have an accrued right to payment, a damages claim arising from repudiation and termination, or a limited entitlement to restitution for work done. Pleading the wrong claim can increase costs, complicate the evidence, and create avoidable exposure to an adverse costs order.
The contract should be analysed clause by clause, particularly the provisions dealing with milestones, progress payments, variations, suspension, termination, and valuation. In building and services disputes, it is also important to determine whether statutory requirements affect the enforceability of payment or variation claims. The fact that work has been performed does not, by itself, establish an entitlement to recover its market value.
Evidence should be preserved before positions harden. Relevant material includes the signed contract, schedules, scope documents, invoices, payment claims, variation approvals, time records, project reports, photographs, expert assessments and correspondence concerning delay, defects, or termination. A party defending the claim should also document incomplete work, rectification costs and any benefit that was not received or retained.
Valuation strategy requires particular care. Following Mann v Paterson Constructions Pty Ltd [2019] HCA 32, a claimant cannot treat unjust enrichment as a route around the agreed bargain. Where restitution is available, the cap at the contract price will usually shape both the claim and the settlement position.
Early advice can clarify whether the appropriate commercial litigation process involves negotiation, expert determination, mediation, or court proceedings. A focused assessment of liability, valuation and evidentiary gaps often creates more leverage than an inflated claim combining contractual debt, damages, and restitution without a clear legal basis.
Frequently Asked Questions
Can I claim payment for work done after a contract is terminated?
Possibly. A quantum meruit claim in Victoria may be available for work performed before termination where no accrued right to payment arose under the contract. The claim will depend on the payment structure, the basis of termination, and whether the contract already governs payment for that work.
Can I claim quantum meruit if an invoice was already due?
Usually not for the same work. If the contract had already created an accrued right to payment, the claimant must pursue the amount as a contractual debt. Restitution for work done is not normally available as an alternative simply because it may produce a more favourable valuation.
Can a quantum meruit claim exceed the contract price?
No. Following Mann v Paterson Constructions Pty Ltd [2019] HCA 32, there is ordinarily a cap at the contract price attributable to the relevant work. A claimant cannot use unjust enrichment to recover more than the value the parties agreed for that performance.
What happens if the contract was terminated without a valid reason?
A party that terminates without proper legal grounds may itself have repudiated the contract. This can change which party is entitled to damages and may undermine a claim based on repudiation and termination. The termination clause, notice requirements, cure periods, and surrounding correspondence should be reviewed before any termination step is taken.
What evidence do I need for a quantum meruit claim?
Strong claims are supported by records showing what work was performed, when it was performed, and how it should be valued. Useful evidence includes the contract, scope documents, timesheets, invoices, variation approvals, progress reports, photographs, and expert valuation material. In building and services disputes, evidence of incomplete or defective work and rectification costs will also be relevant.
When Should You Seek Advice About a Quantum Meruit Claim in Victoria?
A quantum meruit claim in Victoria can provide a limited path to recovery where a contract ends before payment rights have fully accrued. However, the outcome depends on the payment structure, the validity of repudiation and termination, the scope of any accrued right to payment, and the cap at the contract price identified in Mann v Paterson Constructions Pty Ltd [2019] HCA 32.
Businesses should assess the contractual, restitutionary and evidentiary issues before advancing or defending a claim. Pentana Stanton Lawyers advises business owners, directors and professionals on unpaid work, termination disputes and related building and services disputes. For advice on the available causes of action and the commercial strategy best suited to the matter, visit our commercial litigation service page or book a consultation with our team.
This article is general information only and not legal advice. For advice specific to your circumstances, please contact our team.
