When homeowners and builders enter into construction contracts, they set out the terms and conditions for the work to be done. During the project, changes might occur, and these are known as variations. Variations can be due to a range of factors such as design changes, unforeseen site conditions, or the homeowner’s request for additional work. In most cases, variations must be documented and signed by the homeowner before the builder can proceed with the additional work. If the variation complies with the contract then these are known as “Contractual Variations”. But what happens when variations are not documented in accordance with contractual provisions, or when the owner does not sign off on the changes?
This is where the legal principle of quantum meruit comes into play. These are known as “Non-Contractual Variations”. Quantum meruit allows a builder to claim reasonable remuneration for work done or materials supplied in situations where there is no valid and enforceable agreement governing their right to compensation. In other words, a builder can claim for the value of the work they have completed, even if the owner has not approved the variations in writing. In this article, we will explore the legal principle of quantum meruit and how it applies to claims for variations not signed and accepted by owners. We will discuss the key requirements for claiming quantum meruit, examine relevant case law, and provide practical advice for homeowners who are in NCAT proceedings and being sued for quantum meruit.