Unjust enrichment - Basic principles

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Overview

Unjust enrichment is a key doctrine in the law of obligations, ensuring fairness when one party benefits at another's expense outside of contract and tort law. For the SQE1 FLK1 exam, understanding unjust enrichment is vital, including its main elements, considerations, and possible defenses. This article offers a detailed look at these principles to help you tackle legal scenarios and exam questions with confidence.

Essential Elements of an Unjust Enrichment Claim

To succeed in an unjust enrichment claim, four elements must be established:

  1. Enrichment: The defendant must have received a benefit, identifiable and measurable, such as money, property, or services.

  2. Expense to the Claimant: There must be a direct expense to the claimant that matches the defendant's benefit.

  3. Unjust Retention: It would be unfair for the defendant to keep the benefit without compensation. This is based on fairness, considering factors like mistake, coercion, and failure of consideration.

  4. Absence of Defenses: The defendant should have no valid defenses to justify keeping the benefit.

Unjust Retention Considerations

The "unjust retention" element is often challenging. Considerations include:

  • Mistake:

    • Fact: Errors about factual matters.
    • Law: Misunderstanding the legal impact of actions.

  • Failure of Consideration:

    • Total: No goods or services provided despite payment.
    • Partial: Some promised goods or services delivered, but not all.

  • Coercion:

    • Duress: Benefits gained through threats.
    • Undue Influence: Benefits obtained by undue influence over the claimant.

Case Studies and Examples

  1. A homeowner mistakenly pays a contractor 5,000insteadof5,000 instead of 3,000 for repairs. The contractor gains a $2,000 benefit due to this error.

  2. A lawyer drafts a will, later invalidated in court. This may lead to an unjust enrichment claim, depending on the details.

  3. A construction firm completes work based on informal agreements, but the owner refuses payment. An unjust enrichment claim could be possible.

Defenses Against Unjust Enrichment Claims

Defendants can counter claims with defenses like:

  • Change of Position: Significant changes made in reliance on the benefit may make it unfair to return it.

  • Entitlement: Demonstrating a legitimate right to the benefit serves as a strong defense.

  • Benefit Disposal: Already disposing of the benefit can affect restitution claims.

Broader Legal Context

Unjust enrichment intersects with:

  • Contract Law: Arises when contracts are invalid or unenforceable.
  • Tort Law: Can overlap in cases like negligence or misrepresentation.

Conclusion

Understanding unjust enrichment is essential for the SQE1 FLK1 exam and legal disputes. Key points include:

  1. The four essential elements: enrichment, claimant's expense, unjust retention, and absence of defenses.
  2. Complexity around unjust retention, with considerations of mistake, failure of consideration, and coercion.
  3. Awareness of defenses like change of position, entitlement, and benefit disposal.
  4. Connections to contract and tort law.
  5. Real-world application through case studies.

By comprehending these principles, you'll be well-prepared to tackle complex legal situations and excel in your exam.