Saturday 7 April 2012

What is basic concept of unjust enrichment?

"The doctrine of unjust enrichment is an equitable concept created to remedy injustices that occur where one person makes a substantial contribution to the property of another person without compensation. 

"... unjust enrichment arises when three elements are satisfied: an enrichment; a corresponding deprivation; and an absence of juristic reason for the enrichment. When a claimant is under no obligation contractual, statutory or otherwise to provide the work and services to the recipient, there will be an absence of juristic reasons for the enrichment.

"... personal as well as proprietary remedies are available to remedy unjust enrichment.

"Two remedies are possible: an award of money on the basis of the value of the services rendered, i.e. quantum meruit, and the one the trial judge awarded, title to the house based on a constructive trust."
Thus, there are said to be three conditions which must be met before you can get a court to force reimbursement or compensation based on unjust enrichment: (1) an actual enrichment or benefit to the defendant, (2) a corresponding deprivation to the plaintiff, and (3) the absence of a legal reason for the defendant’s enrichment. Seward v Seward:
"Unjust enrichment results where facts display an enrichment, and a corresponding deprivation in the absence of any juristic reason for the enrichment.

"The Court should consider two matters in determining whether there is an absence of juristic reason for the enrichment. First, the Court should consider whether there are any contractual or statutory obligations existing between the parties that would justify the enrichment. If the parties contracted to undertake certain activities, the fact that one of them greatly benefits from the contractual arrangement will not lead to a successful suit in unjust enrichment.

"The second matter into which the Court should enquire is whether the enrichment and the deprivation are unjust in the circumstances. In this regard, the ... requirement is met where a party prejudices himself or herself with reasonable expectation of receiving something in return, and the recipient party freely accepts the benefits conferred by the conferring party in circumstances where the recipient party knows, or ought to have known, of that reasonable expectation."
The legal theory behind unjust enrichment is the constructive trust, which the court imposes upon the circumstances to hold the person unjustly enriched as the trustee for the person who should properly get the property back, held to be the beneficiary of the constructive trust.
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