Unjust enrichment

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In civil law, unjust enrichment means one party has conferred a benefit upon another party with the expectation he would be compensated for doing so, but has not received compensation equal to the value of the benefit conferred. The party who has unjustly enriched another may sue in restitution and is entitled to receive the fair market value of the benefit conferred upon the defendant, measured according to what one in the position of the defendant could have purchased identical goods or services from another in the position of the plaintiff at the time and place of the unjust enrichment.

Restitution is available to anyone who has benefited another with the expectation that he would be paid for doing so, but has not received the fair market value of the benefit conferred. Restitution is third of the three civil systems of redress in the American legal system, the others being contract and tort.

Because restitution is separate from contract, a party to a contract who has broken his end of the agreement may recover in restitution for the fair market value of his work or services rendered, even though he has breached the contract and therefore could not recover under the contract. However, the breaching party may not recover more than the contract price for his services even if the fair market value exceeds the contract price.

The North Dakota Supreme Court has ruled that five elements must be established to prove unjust enrichment [1]:

  1. An enrichment
  2. An impoverishment
  3. A connection between enrichment and the impoverishment
  4. Absence of a justification for the enrichment and impoverishment
  5. An absence of a remedy provided by the law

In Massachusetts, there are some decisions denying recovery in restitution by the breaching party although this is not generally the rule in the United States.

Here are some examples: B contracts with T to provide a year's worth of labor at a specific price P. T is to pay B for his labor at the end of the year. After 9.5 months B decides to quit the job. B sues T and recovers the fair market value of the labor he performed for T during those 9.5 months. Note that in this instance, because B is in breach of his contract with T, B cannot recover more than the contract rate for his labor. The non-breaching party is protected from paying more than the contract rate for labor. This makes sense because it would be unfair to make the party who has lived up to his end of the agreement pay more than he agreed to in the first place. However, the breaching party is afforded no such protection.

Suppose B is a building contractor who has been awarded a contract to build a skyscraper. B hires A to handle all necessary steel erection. The contract calls for B to furnish the cranes A needs to lift the beams into position. B does not furnish these cranes to A. At first, A performs and hires cranes at his own expense but partway through the contract A stops and refuses to go further on account of B's breach. A sues B and recovers the fair market value of the services he has rendered to B thus far. As the non-breaching party, A is entitled to the fair market value of his services (what it would cost one in B's position to hire one in A's position to perform the services A has rendered to B at the time and place A rendered such services to B) even if it exceeds the contract price for such services.

Not all actions in restitution involve contracts. However, whenever one party confers a material benefit upon another with the reasonable expectation he will be compensated for doing so, the party conferring the benefit is entitled to restitution.hu:Jogalap nélküli gazdagodás zh:不當得利

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