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What Is Unjust Enrichment and How Does It Impact Your Case?

  • Mar 01, 2023
  • The Harr Law Firm

Businesswoman with handful of money and long nose, implying liesAs personal injury lawyers, we focus a lot on harmed parties seeking restitution for their losses—damage to property, lost income, medical expenses, and so on. But what about when one party in a case actually gains something at the expense of another? This is called unjust enrichment, and it can have a major impact on your case, as well as the final settlement amount. Keep reading to learn more about what unjust enrichment is and how it comes into play in many court cases.

What Is Unjust Enrichment?

As stated above, unjust enrichment refers to a circumstance in which one party receives a benefit at the expense of another. These situations most often arise in breach of contract cases and can occur for a number of reasons, from a simple mistake to a deliberate manipulation of the harmed party. Consider the following example:

A business owner hires a mechanic to provide oil changes for all of the vehicles in their company fleet. As the mechanic is performing this job, one of his workers moves a few of the vans they’re servicing to the rear of the building to make room for other customers to park out from; this is where the mechanic has been moving vans he’s already serviced, so he mistakenly believes these vehicles have already been serviced. The business owner pays for all of the oil changes, only to discover later that several of them were not completed. In this case, the mechanic was unjustly enriched by being paid for work he did not performed. Of course, this case would most likely be worked out between the two parties, with the mechanic correcting the mistake by providing the promised service. However, in larger and more complex cases, even accidental unjust enrichment can lead to a lawsuit.

How Can You Prove Unjust Enrichment?

In the above example, the failure to render services paid for is fairly apparent. In other cases, however, proving that a defendant was unjustly enriched by your loss or manipulation can be more difficult. There are two primary factors that need to be proven in each case:

  1. Consideration – In law, consideration refers to a payment or other transfer of property between the claimant and the defendant. This can also be in regards to services or aid given to the defendant.
  2. Unjust factor – Next, you’ll have to prove that there was an unjust factor in the exchange, or something that spoiled your initial intentions in doing business with the defendant.

Both of these elements need to be taken into consideration when determining whether a defendant was unjustly enriched, and not merely enriched. More specifically, the unjust factor in the case should align with one of the following categories:

  1. Mistake – This is the simplest category for unjust enrichment, and would apply to the example provided above. If a payment or property was given to the defendant by mistake, then the claimant is entitled to restitution, regardless of who made the mistake to begin with (e.g., if the business owner in the example above had accidentally paid for too many vehicle, he would still be entitled to his money back for the excess amount paid).
  2. Failure of consideration – This category applies when the claimant initially intended to enrich the defendant, but other factors caused that intention to disappear, and the defendant still benefited (e.g., the business owner decided to hire another mechanic to perform the oil changes after paying the first mechanic, but before the services were rendered).
  3. Duress – The claimant makes a payment or transfer of property after being threatened or pressured to do so.
  4. Undue influence – The defendant benefits from abusing their relationship with the claimant and taking advantage of their trust.

These last two categories can get quite a bit more complex than the first two, and will almost certainly result in formal claims, rather than settling the matter personally, as in the first example we provided.

How Does Unjust Enrichment Impact Your Settlement?

If you can prove that the defendant in your case was unjustly enriched by your losses (whether it be from an injury, breach of contract, or other causes), your settlement amount will likely be adjusted based on either how much you lost, or how much the defendant was enriched. This is where restitution and compensation come into play.

Restitution refers to the amount of money the defendant received as a result of the unjust enrichment, and are required to pay back to the plaintiff. Compensation, on the other hand, refers to how much the plaintiff lost. These amounts are not always the same, so it’s important to decide whether you should seek restitution or compensation in your case.

If you have questions about how unjust enrichment impacts your case, contact The Harr Law Firm today.