What is Unjust Enrichment?
What is Unjust Enrichment?
“Unjust enrichment” may occur any time one party wrongfully gets benefits or profits at the expense of another party. While state laws may vary, unjust enrichment usually refers to benefits that are received passively, accidentally, or by mistake. In general, unjust enrichment is considered to be unfair, and laws require a party that has been unjustly enriched to pay restitution to the other party.
An example of unjust enrichment is where a person enters into a contract with an auto body shop to paint two of their cars. Suppose that the auto shop completed the painting of one car, but couldn’t finish the second car. Here, the owner of the cars will be unjustly enriched if they don’t pay for the paint job of the first car. While the shop may be in breach for not finishing the second car, they are still entitled to payment for the work they have completed.
What is Unjust Enrichment in a Contracts Claim?
Unjust enrichment most frequently arises in breach of contract lawsuits. As mentioned in our example earlier, a common contract situation involving unjust enrichment is where incomplete services are not paid for. Another common example of unjust enrichment in a contracts claim is where one party receives property or goods in a way that is considered unjust.
In a contracts setting, methods for recovery exist in order to prevent unjust enrichment of one party. The most common equitable remedy for unjust enrichment is restitution, which is monetary payment for the benefit that was wrongfully obtained by the other party.
Unjust enrichment can also occur in situations beside a contract claim, such as those involving personal injuries or criminal violations.
What is the Difference Between Restitution and Compensation?
A party that is unjustly enriched almost always has to pay restitution to the other party. Restitution is calculated based on the amount gained by the enriched party, not by the losses suffered by the other party.
In contrast, compensation is calculated based on how much the other party lost, not by how much the enriched party gained. Also, restitution may involve a requirement that the enriched party return a specific item that they had gained; if compensation is applied, the party might be required to pay the other party for the value of the property.
This difference is important, because it can affect the overall amount that the defendant needs to pay. Compensation is usually reserved for standard breach of contract cases that don’t involve unjust enrichment.
Do I Need a Lawyer if I Have a Dispute Involving Unjust Enrichment?
Unjust enrichment is a common issue when it comes to breach of contract claims. You may wish to contact a lawyer if you have any disputes or conflicts involving unjust enrichment. Your lawyer can go over the laws in your area with you to help you obtain the appropriate remedy under law. Or, if another party is claiming unjust enrichment against you, your lawyer can represent you in court during a lawsuit.
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Last Modified: 05-31-2012 11:19 AM PDT
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