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Unjust Enrichment: Understanding the Basics and Defending Claims

Unjust enrichment is a legal concept that arises when one person benefits at the expense of another in a manner deemed unfair by the law. Unlike contract law, unjust enrichment does not require the presence of a formal contract. Instead, it hinges on specific criteria that must be met for a claim to succeed. In this blog post, we’ll provide a basic overview of unjust enrichment, including its key elements, who can and cannot claim it, and the defences that can be raised when facing an unjust enrichment claim.

Key Elements of Unjust Enrichment

To establish an unjust enrichment claim, certain essential elements must be satisfied:

  1. Benefit Conferred: The plaintiff must have conferred a benefit on the defendant. This benefit can be in various forms, including goods, services, or even saving someone’s life or property.
  2. Knowledge and Retention: The defendant must be aware of and retain the benefit. In other words, they should know that they have gained from the plaintiff’s actions.
  3. Unfair Circumstances: The circumstances must make it unjust for the defendant to retain the benefit without compensating the plaintiff. If it’s fair for the to keep the benefit, an unjust enrichment claim may not succeed.

Who Can and Cannot Claim Unjust Enrichment?

Not everyone can claim unjust enrichment. There are certain exceptions:

  1. Good Samaritan Rule: If a benefit is rendered out of goodwill or charity, the defendant can usually retain it without being obligated to pay for it. This rule recognises the value of acts of kindness and charity.
  2. Officious Intermeddler: Recovery may be denied to those who insert themselves into a situation unnecessarily, disrupting transactions between willing and informed parties.

Quantum Meruit and Quantum Valebat

When the enrichment takes the form of services or goods received by the defendant, the claimant may opt for a more specific claim:

  • Quantum Meruit: This claim pertains to services and arises when there is no binding contract in place or when services fall outside the contract’s terms.
  • Quantum Valebat: This claim relates to goods and is applicable when there is no binding contract, or the contract’s terms do not cover the provided goods.

Both these claims raise questions about how the conferred benefit should be valued and who derived that benefit.

Defending Against an Unjust Enrichment Claim

If you’re facing an unjust enrichment claim, there are several defences you can consider:

  1. Change of Position: If the defendant has changed their position due to the enrichment, a causal link must exist between the enrichment and the change. For instance, if the defendant received money by mistake and spent it, this could be a valid defence.
  2. Ministerial Receipt: This defence applies to agents who receive a benefit but must account for it to their principal.
  3. Bona Fide Purchaser for Value: A defendant may argue that they received property in good faith and for good consideration, making it unfair to deprive them of it.

Other defences may include estoppel, impossibility of counter-restitution, the passing on of loss, or reliance on illegality in certain circumstances.

Unjust enrichment is a legal principle that provides a remedy when one party benefits unfairly at the expense of another. To succeed in an unjust enrichment claim, specific elements must be met, and various defences can be raised. Understanding these basics is crucial for both potential claimants and defendants to navigate the complex terrain of unjust enrichment claims within the legal system.

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