📘 Chapter 13: Unjust Enrichment


🔹 Meaning of Unjust Enrichment

Unjust enrichment means gaining a benefit unfairly at the expense of another without any legal justification.

🧾 It is a principle based on equity and justice which ensures that no one should be allowed to profit unjustly at the expense of another.


🔹 Definition

Unjust enrichment is:  “A situation where one person is enriched at the expense of another in circumstances that the law sees as unjust.”


🔹 Essential Elements of Unjust Enrichment

To claim unjust enrichment, the following three conditions must be fulfilled:

1. ✅ Enrichment of the defendant

➤ The defendant must have gained some benefit.

2. ✅ At the expense of the plaintiff

➤ The benefit must come directly or indirectly from the plaintiff.

3. ✅ Unjust to retain the benefit

➤ Keeping the benefit must be unfair or against the principles of equity.


🔹 Examples of Unjust Enrichment

📌 A receives money by mistake from B. A must return it.

📌 B constructs a house on A’s land thinking it’s his. A enjoys it knowingly. A must compensate B.


🔹 Restitution in Unjust Enrichment

Restitution means returning or compensating for the benefit received.

If someone is unjustly enriched, the court may order restitution to the aggrieved party.


🔹 Defenses to Unjust Enrichment

The defendant may avoid liability if they can prove:

1. ❌ Gift – The enrichment was voluntarily given as a gift.

2. ❌ Contractual right – The benefit was received under a valid contract.

3. ❌ Change of position – The defendant has changed their position based on the belief that the benefit was rightly theirs.


🔹 Remedies Available

🔸 Monetary Compensation – Paying back the value of the unjust enrichment.

🔸 Constructive Trust – Holding the property or asset in trust for the rightful owner.

🔸 Subrogation – Allowing one party to step into the shoes of another to recover payment.


🔹 Importance in Business Law

✔ Prevents fraud and exploitation

✔ Promotes fairness and justice

✔ Encourages ethical business conduct



🔹 Case Laws (Illustrative)

📚 Fibrosa v. Fairbairn (1943): A contract was frustrated, but the advance payment was ordered to be returned under the principle of unjust enrichment.


📚 Moses v. Macferlan (1760): First recognized unjust enrichment under common law. Lord Mansfield held that one should not retain money wrongly received.


🔚 Conclusion

Unjust enrichment ensures that legal systems support fairness and do not allow anyone to benefit wrongly at someone else’s cost. It is a moral and legal principle fundamental to business justice.