This is an issue which has intrigued me too. Many building contracts - especially standard form contracts published by various institutes for various purposes - explicitly provide for a mechanism by which extras can be charged and paid for. Even where they do not, there will often be a contractual variation to cover the extra work, though it will often be difficult - pace Allan Axelrod, and Steve Hedley in Cornish et al eds Essays for Jones - to spell out the indicia of a contract in such circumstances. But where there is neither an express contractual mechanism nor a variation, then an obligation to pay for the work if done would arise, to adopt the language of the common counts,in a claim for a quantum meruit. To the extent that such a claim is directed to reversing the defendant's unjust enrichment (see McKendrick in Essays for Jones), the plaintiff would have to satisfy the terms of the principle of unjust enrichment, and demonstrate that there was an unjust factor (free acceptance, if it exists, is often deployed to justify such qm claims; failure of consideration, stripped of its confining requirement of totality and expanded to such a services count, is often presented as an alternative to free acceptance in situations such as the present), and an enrichment (the work, as accepted, or bargained for, or incontrovertibly beneficial) at the plaintiff's expense. Furthermore, since it is a bar to restitution that the benefit was conferred pursuant to a valid contract, the plaintiff would have to demonstrate that the building in the circumstances was outside the terms of the contract.

Because there has relatively recently been a particularly bad Irish High Court decision on just this problem, I discuss these issues in a book review of RESTITUTION AND CONTRACT By Andrew Skelton (Mansfield Press, Oxford, 1998) forthcoming in the (1998) Dublin University Law Journal:

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Consider the Irish case of Cotter v Minister for Agriculture (High Court, unreported, 15 November 1999; Supreme Court, unreported, 1 April 1993). A group of farmers hired the plaintiff to drain a river, pursuant to a scheme whereby the Minister for Agriculture would pay up to 50 % of the estimated costs. The provisions of the written contract fixed a price for the work but also allowed the plaintiff to submit a claim for additional payment in respect of "physical conditions which could not reasonably have been foreseen by an experienced contractor" to the farmers' "Engineer" who was to decide whether the physical condition was in fact so unforeseeable. No such "Engineer" was validly appointed. The plaintiff encountered rock in much greater quantities than had been foreseen. Although Murphy J in the High Court found "difficulty in accepting that rock in the bed of a river could not have been reasonably foreseen. The bed of a river must consist of something …" (at p 30 of the transcript), the rock which was encountered was in much greater quantities than foreseen at the outset by the various players in this drama. Thus, it was unforeseen for the purposes of the contract. Nevertheless, the plaintiff did the extra work required as a consequence of the extra rock, and sought remuneration for the extra work. In the High Court, Murphy J held that the plaintiff was entitled to a quantum meruit from the farmers; this was not disturbed on appeal to the Supreme Court, where O'Flaherty J (Egan and Denham JJ concurring) held that the Minister was liable in tort to the farmers for half of the amount which they therefore had to pay to the plaintiff on the quantum meruit. Murphy J had justified this as follows:

"I am satisfied that the farmers are liable in Contract to the plaintiff in respect of the rock encountered in the course of the works to the extent to which the same was "unforeseen". Again I am satisfied that the plaintiff cannot be denied his right to payment for the works done in respect of those unforeseen circumstances solely by reason of his failure to comply with the conditions which were rendered impossible due to the absence of any person acting as Engineer for the purposes of the contract. It seems to me that all that can be done at the present stage is to compensate the plaintiff on a quantum meruit basis for the extra work which he did as a result of the unforeseen conditions. The liability under this heading is one of Contract or Quasi-Contract falling on the Farmers" (at pp 46-47 of the transcript).

The basis of liability in contract is unclear: it was impossible to follow the contract procedures to claim the extra payment; hence, there could be no liability on the contract. Nor was there an effective variation of the terms of the contract to cover the extra work done (as there was held to be in the similar US case of Watkins v Carrig 21 A2d 591 (1941) where the excavator of a cellar encountered rock in the course of excavations and the parties consequently orally agreed a higher price for the work). As to the claim in quasi-contract or restitution, it seems to turn on the assumption that since the contract was inoperable (at least in respect of the extra work), the basis upon which the plaintiff had performed had failed; in other words, the claim in restitution turned upon failure of consideration. But the plaintiff had performed fully, and had been partly paid: he received at least some part of that for which he had bargained; in which case, the failure of consideration was partial and not total. On this reading, the quantum meruit was justified by a partial failure of consideration, illustrating that failure of consideration can be deployed to justify a quantum meruit, that such failure may be partial and need not be total, and that the quantum meruit cases provide excellent examples of partial failure of consideration as a ground for restitution.

For the sake of completeness, a potential problem with a restitutionary reading of Cotter should be noted. It is a cardinal principle of the law of restitution that "a plaintiff's restitutionary claim will fail if it is shown that he was under a[n] obligation to confer the benefit [as where] he has contracted to confer the benefit" (Goff and Jones The Law of Restitution (5th ed, Sweet & Maxwell, London, 1998) p 48 (emphasis in original); Pavey & Matthews v Paul (1987) 162 CLR 221 (HCA) 256 per Deane J; Pan Ocean Shipping v Creditcorp (The Trident Beauty) [1994] 1 WLR 161; [1994] 1 All ER 470 (HL)). Hence, "if the contract is not terminated, the parties to it must seek their remedy under the contract and not in restitution" (id). This principle has been deployed in Ireland to deny a restitutionary quantum meruit where a contract remained on foot (Galvin Estates v Hedigan [1985] ILRM 295 (HC) 302 per Costello J); and in Cotter, it is quite clear that whilst the contract may have been inoperable in respect of the matter of the extra work, it was nonetheless valid and on foot. For example, in the similar US case of US v Western States Mechanical Contractors 834 F2d 1533 (1987), the plaintiff did not recover under the contract for the value of the excavation of the extra rock because the contractual procedure for the claim had not been followed, but did recover on a restitutionary quantum meruit because the contract had been discharged by the defendant's breach (and though the plaintiff had underbid for the work, the quantum meruit was not limited by the contract price) Hence, it seems to follow that whilst the quantum meruit claim in Cotter might have satisfied the first three enquiries of the principle against unjust enrichment, it should have failed on the fourth; that the existence of a valid contract governing the particular relationship between the parties is a bar to restitution should have been an end to the matter. On the other hand, in Miles v Wakefield Metropolitan DC [1987] AC 539 (HL), the House of Lords gave a quantum meruit to an employee who, pursuant to limited industrial action, rendered only partial performance of his contractual obligations, in circumstances where the contract of employment remained on foot. Though, consistently with general principle, Goff and Jones comment that "[n]o restitutionary claim should succeed in such a case" (at p 49), nonetheless, cases like Cotter and Miles could force a reassessment of the strictness of the principle (on which see Mead "Restitution Within Contract ?" (1991) 11 LS 172; Birks p 464; Burrows "Solving the Problem of Concurrent Liability" (1995) 48(2) CLP 103). The result in Cotter is difficult to explain, but if it is to be accepted as a successful claim in restitution, then it provides an excellent example of partial failure of consideration grounding a quantum meruit, a result which would meet with Skelton's favour.

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Best from Dublin

Eoin

EOIN O'DELL
Barrister, Lecturer in Law, Trinity College, Dublin 2, Ireland
(353/0 1) 608 1178 (w) 677 0449 (fx); (353/0 86) 286 0739 (m)
(All opinions are personal. No legal responsibility whatsoever is accepted.)