411: The Legal Theory of Unjust Enrichment

411: The Legal Theory of Unjust Enrichment

As we’ve remarked multiple times on this blog, and as you were probably told countless times during your youth, life isn’t always fair. That said, as we’ve also expressed consistently on this blog, the law does provide a remedy for righting wrongs that might otherwise seem to be the result of unfairness or bad luck.

Being taken advantage of is a harsh reality of life, but that doesn’t mean that there is no legal recourse for the abused. Sometimes, the party who willfully gains from the losses of another can be held liable for those losses. If someone is the beneficiary of enrichment that unjustly came about due to the work of another, that person can be responsible for restitution to the person who was responsible for the “enriching” based on the legal theory of unjust enrichment, a legal principle that, in its modern form, dates back to the 1937 publication of Restatement of Restitution.

The Restatement of Restitution reads, in part, a “person who has been unjustly enriched at the expense of another is required to make restitution to the other.” Clearly the most problematic element of this legal concept is the definition of “unjust”; specifically, what makes an incident of enrichment unjust? The answer to that question is contingent upon factors that vary on a case-to-case basis, though there are some general principles that guide the reasoning.

For a case to be a viable unjust enrichment case, there must be a few verified factors. There must be clearly, demonstrable enrichment—for example, the enrichment of a value of a home, by way of contract work, design work, etc. Additionally, it must be proven that that the supposed benefits are indeed benefits. Furthermore, and not conclusively, it must be clear that the person whose work was responsible for the enrichment was not compensated for their work.

Let’s look at an example of something that would probably be dismissed as a case of unjust enrichment. Bob tells John that he will buy John a pizza if John helps Bob paint his living room. Bob does buy John a pizza, and then John does help Bob paint his living room. Afterward, John realizes that he enriched the appearance (and perhaps the value) of Bob’s apartment by helping him paint the living room. Additionally, John asserts, he was not paid for his work. This would not be a case of unjust enrichment because of the facts that, among other things, a) there was an agreement that the compensation for the paint work would be a pizza purchase for John by Bob, and b) the changing of paint color in a living room is a small task for which there are no clearly proven economic (or other) benefits that indicate enrichment.

Finally, we will look at a feasible case of unjust enrichment. Let’s say Jane, a wealthy woman, starts dating Bill, a construction manager with a small business. Jane, after getting engaged to Bill, decides to purchase a new home, invites Bill to live there with her, and enlists Bill and his small crew of coworkers to do all of the extensive construction and renovations in the house—work that takes a full year and prevents Bill from doing any work for which he is actually paid. Jane does not offer to pay Bill for the home, and Bill assumes that this is because the two are engaged to be married and thus will share the home, which he has worked so hard on professionally fixing-up. Conveniently, after the renovations are complete, Jane breaks off her relationship with Bill, after a year of unpaid work that he did one the house that enriched the value of her house significantly. Bill may very well have on his hands a viable case of unjust enrichment, in which Jane benefited demonstrably (based on the value of the hew house, the price at which the home was purchased, and the determinable amount of money it would have cost a construction worker to perform the work in the home for pay) and Bill’s work went uncompensated.

If you have questions about unjust enrichment, please reach out to us for a free consultation by calling 561-266-919 or emailing daronberg@build.simple.biz. Don’t let others take advantage of you; in many cases, the law is there to protect you.

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