The doctrine of unjust enrichment typically refers to a benefit or benefits which are received:

  • Passively;
  • Accidentally; or
  • By mistake.

Unjust enrichment can occur any time when a party profits at the expense of another party. The state laws governing unjust enrichment may vary but, generally, it is considered to be unfair and the laws required that the party that has been unjustly enriched to pay restitution to the other party.

If an individual seeks to file an unjust enrichment claim, they will file a lawsuit in civil court. Lawsuits filed in civil court typically result in monetary remedies and do not involve incarceration or criminal penalties.

For example, suppose an individual enters into a contract with an automobile body shop to paint two of their cars. Suppose that the shop completed the painting of one car but was not able to finish the painting of the second vehicle.

In this example, the owner of the vehicles would be unjustly enriched if they do not pay for the paint job on the completed car. Likewise, the shop would be unjustly enriched if it retained payment for two paints jobs although it only completed one of them.

Although the shop may be in breach for not finishing the second vehicle, it is still entitled to payment for the work that was completed on the first vehicle. The issue of unjust enrichment arises most frequently in breach of contract lawsuits.

One common example of a contract situation that involves unjust enrichment is when incomplete services are not paid for. Another common example involving contracts is when one party receives property or goods in a way which is considered unfair.

There are methods for recovery that are specific to contracts which prevent unjust enrichment of a party. Restitution is the most common equitable remedy for unjust enrichment.

Restitution is monetary payments for the benefit of that which was wrongfully obtained by the other party. Unjust enrichment may also occur in situations outside of contract claims, including those that involve personal injuries or criminal violations.

What is an Example of Unjust Enrichment?

As previously noted, unjust enrichment commonly occurs in situations which involve a breach of contract. It is common for this to occur when one party begins providing goods or services with the expectation of being paid, only to discover at a later time that the party is refusing to pay for the goods or services.

For example, suppose that a homeowner hires a contractor to install windows in their home. Suppose that the contract was terminated prematurely because of a breach and only half of the windows are installed.

Suppose then that the property owner refuses to pay for the work which was already completed. In this example, the property owner was unjustly enriched because they received benefits from the contractor in the form of half of the windows.

In this case, a court would likely require the owner of the property to pay the contractor for the work which was completed. It is important to note that unjust enrichment may occur in a wide variety of circumstances.

Any time a party stands to gain unfairly from another party, it can lead to a claim of unjust enrichment.

How Do I Prove Unjust Enrichment?

The definition of unjust enrichment may vary by state, however, a court will typically consider the following elements of unjust enrichment:

  • Was the defendant enriched by the activity of the plaintiff?;
  • Did the enrichment occur at the plaintiff’s expense?;
  • Was the enrichment unjust or unfair?;
  • Are there any defenses available to the defendant?; and
  • What types of remedies is the plaintiff requesting?.

The court, in particular, will focus on the question of whether the enrichment was unjust or unfair. In the majority of cases, if a defendant benefited at the expense of a plaintiff, it is likely that unjust enrichment occurred.

In contrast, if the plaintiff also received a benefit in exchange, then the enrichment may not be considered unjust. Certain jurisdictions require that a defendant be aware that they are receiving an unjust enrichment.

In other words, a defendant must be aware that they are receiving a benefit without having to pay for it.

What Are the Differences between Restitution and Compensation?

When an individual is suing for unjust enrichment, restitution may be ordered. There are differences between restitution and compensation, including:

  • Restitution is a monetary amount which is calculated based on the amount which was gained by the enriched party. The party that was unjustly enriched is typically required to pay restitution to the other party;
  • Compensation, on the other hand, is based on how much the aggrieved party lost, not by how much the enriched party gained; and
  • Restitution may also involve a requirement that the enriched party return a specific item which they gained. Compensation, on the other hand, may require the enriched party to pay the other party for the value of the property.

The differences between these two concepts are important because they may affect the overall amount which needs to be paid. Compensation is typically used in a standard breach of contract case which does not involve unjust enrichment.

How is Unjust Enrichment Different from Providing Charity?

One of the main characteristics of unjust enrichment is that only one of the parties is receiving benefits at the expense of the other party. Regarding charity, while it is true that the party receiving charity is benefiting from the donating party, in many cases, individuals who contribute to a charity also receive benefits in return, such as a tax deduction or write-off.

In addition, when an individual makes a charitable donation, they are fully aware that they will be contributing their funds without necessarily receiving goods or services in return. In other words, they have consented to the donation arrangement.

Unjust enrichment, on the other hand, typically occurs because one party has gone outside the boundaries of what was consented to in a contract.

Are There Any Defenses to Unjust Enrichment Claims?

Pursuant to unjust enrichment laws, there may be some defenses that are available to an unjust enrichment claim, including:

  • Change of position;
  • Estoppel;
  • Statutory defenses;
  • Laches and acquiescence;
  • Limitation periods; and.
  • The impossibility of counter-restitution.

Other available defenses to unjust enrichment claims may include:

  • The doctrine of unclean hands: The defendant argues that the plaintiff should not receive an equitable remedy because the plaintiff acted in bad faith or unethically;
  • Fraud; and
  • The defendant is a minor: Minors may not be liable for the full amount, even if they were aware of the mistake.

Do I Need a Lawyer if I Have a Dispute Involving Unjust Enrichment?

Unjust enrichment may be a difficult claim to prove because it often involves unique factors and circumstances and is typically handled on a case-by-case basis in court. A contract lawyer is best equipped to assist you with any issues, questions, or concerns you have related to unjust enrichment.

Your lawyer can advise you of the laws in your state, what defenses may be available, and what remedies may be awarded. Whether you are the plaintiff or the defendant, your lawyer will represent you during any court appearances and help ensure that your rights are protected.