Unjust enrichment occurs when one person receives benefits at the expense of another. If a person or party does not pay or compensate another person for the benefits they received, they are said to be “unjustly enriched”.
Unjust enrichment is considered to be unfair. Many laws require parties who have been unjustly enriched to pay restitution to the party that provided the benefit. If a party has been unjustly enriched, the party that provided the benefits may file a civil suit in order to receive a restitution award.
Unjust enrichment commonly occurs in situations involving a breach of contract. It commonly occurs when one party begins providing goods or services with the expectation of being paid, only to discover later on that the other party refuses to pay for the goods.
For example, suppose that a property owner hires a contract to install windows in their home. Next, suppose that the contract was terminated prematurely due to a breach, and only half of the windows were installed. Then suppose that the property owner refuses to pay for the work that was partially completed.
This could be considered unjust enrichment- the property owner was “unjustly enriched” because they received benefits from the contractor, i.e., half of the windows. In this example, the court would probably require the property owner to provide the contractor with payment for the amount work that was completed.
Unjust enrichment can therefore occur in a wide variety of circumstances. Anytime one party stands to gain unfairly from another party, it may lead to an unjust enrichment claim.
Each state may have different definitions of unjust enrichment according to their particular set of laws. In general, a court will consider the following questions when proving unjust enrichment:
- Was the defendant enriched by the activity of the plaintiff?
- Did the enrichment occur at the expense of the plaintiff?
- Was the enrichment unfair or unjust?
- Are there any defenses available to the defendant?
- What types of remedies is the plaintiff requesting?
In particular, the court will focus on the question of whether the enrichment was unfair or unjust. In most cases, if the defendant benefited at the expense of the plaintiff, it is likely that the enrichment was unjust. On the other hand, if the plaintiff also received a benefit in exchange, then the enrichment might not be considered unjust.
Finally, some jurisdictions require that the defendant be aware that they are receiving an unjust enrichment; that is, they must be aware that they are receiving a benefit without having to pay for it.
A main characteristic of unjust enrichment is that only one party is receiving benefits at the expense of the other. With regards to charity, it is true that the party receiving the charity is receiving benefits from the donating party. However, in most cases, persons who contribute to a charity are also receiving benefits in return, such as tax deductions or write-offs.
Also, with a charitable donation, the party making the contributions is fully aware that they are contributing their funds without necessarily receiving goods or services in return. In other words, they have consented to the particular donation arrangement.
On the other hand, unjust enrichment usually occurs precisely because one party has stepped outside the boundaries that they have consented to in a contract.
Proving unjust enrichment in court can be a fairly difficult task. Unjust enrichment claims can often involve many unique factors and circumstances, and so courts usually handle them on a case-by-case basis. Thus, you may wish to hire a business lawyer for legal assistance if you are involved in an unjust enrichment claim. Your lawyer can help represent you in court and can provide advice according to the specific laws in your area.