Unjust Enrichment

• Author: Jeffrey Lehman, Shirelle Phelps

Page 167

A general equitable principle that no person should be allowed to profit at another's expense without making restitution for the reasonable value of any property, services, or other benefits that have been unfairly received and retained.

Although the unjust enrichment doctrine is sometimes referred to as a quasi-contractual remedy, unjust enrichment is not based on an express contract. Instead, litigants normally resort to the remedy of unjust enrichment when they have no written or verbal contract to support their claim for relief. In such instances litigants ask a court to find a contractual relationship that is implied in law, a fictitious relationship created by courts to do justice in a particular case.

Unjust enrichment has three elements. First, the plaintiff must have provided the defendant with something of value while expecting compensation in return. Second, the defendant must have acknowledged, accepted, and benefited from whatever the plaintiff provided. Third, the plaintiff must show that it would be inequitable or UNCONSCIONABLE for the defendant to enjoy the benefit of the plaintiff's actions without paying for it. A court will closely examine the facts of each case before awarding this remedy and will deny claims for unjust enrichment that frustrate public policy or violate the law.

In some circumstances unjust enrichment is the appropriate remedy when a formally executed agreement has been ruled unenforceable due to incapacity, mistake, impossibility of performance, or the STATUTE OF FRAUDS. In certain states, for example, contracts with minors are VOIDABLE at the minor's discretion because persons under the age of majority are deemed legally incapable of entering into contracts. But if the minor has received a benefit from the other party's performance before nullifying the contract, the law of unjust enrichment will require the minor to pay for the fair market value of the benefit received. If the adult used duress or UNDUE INFLUENCE to induce the minor to enter the contract, however, the court will deny recovery in unjust enrichment because the adult lacked "clean hands."

In other circumstances unjust enrichment is the appropriate remedy for parties who have entered a legally enforceable contract, but where performance by one party exceeds the precise requirements of the agreement. For example, suppose a homeowner and a builder have entered into a legally binding...