Unjust Enrichment
Rule
A party who confers a benefit on another without a valid contract may recover in quasi-contract (implied-in-law contract) when retention of the benefit would be unjust. Recovery is the reasonable market value of the benefit conferred, not expectancy.
Elements
- Plaintiff conferred a benefit on the defendant
- Defendant had knowledge of the benefit
- Defendant accepted or retained the benefit
- It would be unjust for defendant to retain the benefit without compensation
Exceptions
- Gratuitous conferral: No recovery if plaintiff had no reasonable expectation of payment (Bloomgarden v. Coyer — party seeking business advantage)
- Foisted benefits: No recovery where defendant could not avoid or reject the benefit (unless defendant later accepts by hiring another party — Kelley v. Hance)
- Breaching party’s recovery: A party who materially breaches may still recover the value of partial performance conferred, reduced by the damages caused by the breach (Britton v. Turner; Restatement 2d § 371)
- Contract price as ceiling: When a valid contract exists, the contract price caps unjust enrichment recovery (Johnson v. Bovee); a fully performing party cannot elect restitution over contract price (Oliver v. Campbell)
Policy
Unjust enrichment prevents windfall gains and compensates for real economic contributions even without formal contract. It serves as a safety net when contracts are unenforceable (Statute of Frauds, indefiniteness) but a party has conferred real value. Policy concern: must distinguish genuine restitution from attempts to circumvent the Statute of Frauds.
Key Cases
- Sparks v. Gustafson — business services to a friend’s estate; reasonable expectation of payment based on commercial nature of services
- Britton v. Turner — breaching employee can recover for partial performance; employer should not be enriched by work done before breach
- Watts v. Watts — unmarried cohabitants may raise unjust enrichment claims for business (not domestic) services upon termination of relationship