In its simplest terms, unjust enrichment is getting something for nothing. It arises in those instances where there is no written contract, but a party expects a benefit after paying for services—or someone performs a service and expects payment only to have that refused. It is profit at someone else’s expense, and unjust enrichment is the legal answer to confronting that situation.
Rather than a cause of action, unjust enrichment is the legal theory allowing parties to seek relief, even if no contractual obligations guaranteeing that assistance is in place. The plaintiff will often file a lawsuit for breach of contract with damages described using the unjust enrichment theory and ask that the court find a contractual relationship. It can also come into the picture if a written contract is unclear on a matter or was ruled unenforceable.
Elements of Unjust Enrichment
A plaintiff is required to show the following to prove unjust enrichment:
- The defendant received something of value (usually money) in return for goods or services.
- The defendant acknowledged, accepted, and benefited from what plaintiff provided.
- If the defendant enjoys or benefits without paying, it is considered unconscionable or inequitable.
Unjust enrichment can occur in many types of situations. Plaintiffs may pay for transactions that are later discovered to be part of an unenforceable contract, so they never receive anything in exchange for that payment. There are also cases where a transaction requires preliminary steps not itemized in a contract and additional compensation is requested and refused. Unjust enrichment can help provide a legal theory that the wronged or shorted party receives their just compensation.
Cases of undue influence, lack of capacity, or mistake often compensate people through the theory of unjust enrichment, especially if the plaintiff did not have knowledge of the circumstances.
Unjust Enrichment and Business Litigation
In business litigation, most transactions are in writing and usually enforceable, so this theory does not need to be often used. However, sometimes there are shortcomings requiring the support of the law, even if the parties do not have a valid contract.
Years of business relationship often build trust but also result in shortcuts. The inertia of habitual contractual relationships often results in parties becoming lazy with documentation. People may start to bypass written invoices and contracts altogether and rely on verbal agreements, which becomes a problem if there is a dispute.
These matters can become touchy very quickly, and you will need the assistance of skilled legal counsel to help sort it out. Contact the Law Offices of John J. Zidziunas & Associates when you are uncertain of a transaction but feel you require compensation. We can guide you through the matter and negotiate or litigate as necessary. Call the office at (973) 509-8500 for a free telephone consultation.