Contractors Beware: Don't rely on Quantum Meruit to fill a gap in a contract


The principles of contract interpretation and quantium meruit are obviously quite distinct. But in its recent decision CH2M Hill Energy Canada, Ltd. v. Consumers' Co-operative Refineries Ltd., the Saskachewan Court of Appeal has reminded us that they also give rise to two very different and separate payment obligations. There cannot be an obligation to make a quantrum meruit payment if the contract, properly interpreted, covers the subject matter but contains no contractual obligation to pay.

This decision is a fair warning to contractors: If you want to be paid for each element of the materials or services that you provide, then ensure that the contract clearly identifies those elements and states an obligation to pay for each of them. If you don't at least provide for the obligation to pay, then don't expect quantum meruit to fill the gap left by an adverse interpretation of the contract.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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