Improper appropriation of money, labour or material coupled with an absence of a juristic reason for the exchange echo through the ages of legal conflict.
The legal conundrum of unjust enrichment can be better understood in situations where benefit exchanges in the absence of reciprocation. For example;’
Auto insurance pays out the claim after a vehicle is written off following a traffic accident. Auto insurance company sends a cheque for the value of the vehicle to the policy holder, thus completing contractual obligations as per insurance contract. The policy holder had an outstanding car loan with a bank. The policy holder, instead of paying the outstanding loan, cashed the cheque and purchased a new car for cash, leaving the balance of the loan unpaid. Insurance company wishes to exercise its rights to salvage and attempts to secure the title, but finds out that the policy holder has not cleared the title of the car by paying out the loan. The insurance company issues another cheque to secure the title of the car. The insurer now has the right to recover the additional cost from the insured.
Unjust enrichment often occurs in home renovations and construction projects. For example;
A home owner and a general contractor made an agreement to construct a patio, with base terms being material cost covered by home owner and $50 per hour for building work. The home owner is impressed by the work of the contractor and asks him to build a gazebo as well. Unfortunately, the home owner does not discuss the details of the new contract with the contractor, and when the work is finished, the costs are substantially higher due to increased cost of specialized labour. The homeowner refuses to pay the increased cost, believing that he should only pay as per terms of the previous agreement.
The amount that is worth (quantum meirut)
When there is no established contract on the value of the work, this becomes necessary to establish at law. In general, the courts avoid creating a contract where there isn’t one but at the same time, the courts will establish the fair price for something. For example, if the market value of a gazebo is ‘x’, court will award the fair value instead of the value that is presented by the invoice that was not agreed to at the start.
Third element in proving a case of unjust enrichment requires the absence of a juristic reason that might otherwise negate the legal obligation for the plaintiff to receive restitution from the defendant for the received benefit, the received benefit must be an ‘unjustly’ received benefit.
There are juristic reasons from established categories which may bar a plaintiff from recovering under unjust enrichment including:
- A contract whereas if a contract truly exists then the contract takes precedence – the law of unjust enrichment is intended only to fill the gap where a contract is absent;
- A disposition of law where a juristic decision was previously reached;
- A donative intent where the received benefit was intended as a gift but the giver subsequently seeks payment; and
- A common law or equitable law or statutory law reason such as unlawfulness.