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IAI Actuarial Core Principles · Business Management · Implied terms, exclusion of liability, contractual remedies and damages

Tarang Reinsurance engaged Vikram Consultants to deliver a data-cleaning service. Vikram did about 60% of the agreed work satisfactorily, after which Tarang wrongfully terminated the contract. The contract is silent on payment for part performance. Vikram wants payment for the work already done. Which remedy is most directly suited to this claim?

Quantum meruit is the best-suited remedy. Vikram performed part of the work and Tarang wrongfully ended the contract, so Vikram may claim a reasonable sum for the work actually done, rather than seeking enforcement of the remainder or cancellation of the agreement.

  1. AQuantum meruit, a reasonable sum for work actually performedCorrect
  2. BInjunction restraining Tarang from engaging others
  3. CSpecific performance of the unfinished 40%
  4. DRectification of the contract
  5. Rescission with return of all fees to Tarang

Explanation

Where one party performs part of a contract and the other wrongfully prevents completion, the performing party may claim quantum meruit, meaning a reasonable sum for the work done. An injunction or specific performance does not address payment for completed work. Rescission would work against Vikram.

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