In this two part series we will discuss the contract remedy of unjust enrichment. This first installment will explain the basic concept of unjust enrichment. Part two will discuss how to plead and calculate unjust enrichment.
For those not familiar the intricacies of the legal world, legal jargon may seem like a foreign language (and in some cases it is). One of the more difficult subject areas of law is contract law. Contract law, at its essence, seeks to protect the expectations of the parties to the contract and to reach fair results.
Even where no contract exists between parties, the law has developed doctrines meant to provide for fair and equitable results. One such doctrine, called unjust enrichment, seeks to protect the party that conferred a benefit upon another party. Unjust enrichment is a substitute for damages. It may apply where either no contract between the parties existed, or where the benefit conferred was outside the scope of any contract that did exist between the parties. Unjust enrichment is unavailable when there is an express contract between the parties, because damages are available under the express contract, and the court is not supposed to re-write the deal that the parties themselves have negotiated.
In a recent case, Hosford Bros. Concrete, Inc. v. Premer (available at www.michbar.org/opinions/appeals/2011/072611/49429.pdf), the Michigan Court of Appeals discussed the principle that unjust enrichment is not available where an express contract exists. The parties had two express contracts for the lending of money to purchase land and the land contract entered into as a result of the loan. The plaintiff in Premer sought payment for unjust enrichment following work they completed in developing a subdivision. Due to the real estate market collapse, they were unable to fully develop the land and the land was foreclosed on by the defendants. The plaintiffs sought payment for the improvements they made to the land.
The court noted that although there were two express agreements in the case, an unjust enrichment claim was still actionable because the improvements to the land were outside the scope of the two express land sale contracts. Next, how the defendant was unjustly enriched by the improvements to the land needed to be determined and calculated.
