Unjust enrichment: Overview, definition and example
What is unjust enrichment?
Unjust enrichment happens when one party unfairly benefits at the expense of another, without a legal reason. It’s a legal concept used to prevent someone from keeping a benefit or advantage they didn’t earn, especially when it would be unfair not to compensate the other party.
Why is unjust enrichment important?
Unjust enrichment is important because it promotes fairness in legal and business relationships. It ensures that no one profits unfairly from another’s efforts, property, or losses. Courts use this principle to resolve disputes where formal agreements may not exist, but one party clearly deserves compensation to prevent unfairness.
Understanding unjust enrichment through an example
Imagine a contractor mistakenly builds a fence on your property, believing they were hired by you. Even though you didn’t request or agree to the work, you end up enjoying the benefit of the new fence. If you refuse to pay for it, the contractor could claim unjust enrichment, arguing that it’s unfair for you to keep the benefit of their work without compensating them.
Another example might involve a supplier delivering goods to the wrong business. If that business uses the goods without paying or notifying the supplier, they could be found liable for unjust enrichment because they profited from the supplier’s error.
Conclusion
Unjust enrichment prevents people or businesses from unfairly gaining at someone else’s expense. It ensures that fairness is upheld, even in situations where no formal agreement exists. Understanding this principle is essential for recognizing when compensation may be owed to avoid disputes or potential legal action.
This article contains general legal information and does not contain legal advice. Cobrief is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.