Between parties, disputes may arise where one party benefits at the expense of another. If no formal contract or agreement exists, the harmed party may believe there is no remedy.
In this situation, the equitable remedy of unjust enrichment may provide the harmed party with the relief they seek. An experienced business law attorney can help you build a strong case for an unjust enrichment claim.
What Is Unjust Enrichment in Texas?
When there is a contract, a harmed party can seek a remedy through a breach of contract claim. In the event any party to the contract fails to fulfill its obligations, an enforceable contract contains all the elements required to assert a claim for breach. With an enforceable contract, there can be no basis for relief under the theory of unjust enrichment.
Unjust enrichment is an equitable remedy based on the legal theory that no party should benefit at the expense of another party. Courts created the concept of unjust enrichment in the specific circumstances where no formal contract or agreement exists between the parties.
Unjust enrichment formulates a remedy for a party by applying the principles of restitution to disputes where there is no actual contract or a quasi-contract.
Quasi-contracts were created by the courts to justify the equitable remedy of unjust enrichment. Whether an implied contract exists is decided by the court and based on the particular facts comprising the dispute.
There may also be a basis for a claim of unjust enrichment in Texas if there was an agreement, but it is unenforceable, impossible, or otherwise void.
If the facts show that the parties had a reasonable expectation of some exchange and that exchange did not occur, there is a strong argument for an unjust enrichment claim.
What Are the Elements of Unjust Enrichment?
In an unjust enrichment claim, three elements must be proven:
- A party is unjustly enriched;
- The acquisition of the benefit by one party occurred at the detriment of another party;
- There exists no contract between the parties either due to unenforceability, impossibility, mistake, voidness, or absence of a formal agreement.
These essential elements of unjust enrichment in Texas can be demonstrated with the following example:
A subcontractor working on a home remodel delivers materials to a construction site. Before the subcontractor can install the materials, the contractor goes bankrupt and cannot complete the project.
The homeowner hires a new contractor but refuses to return or pay for the materials provided by the subcontractor. Despite the fact that the subcontrator does not have a contract with the homeowner, the subcontractor would bring an unjust enrichment claim for the value of the materials.
A key element of unjust enrichment claims is that no formal contract exists between the parties or that any existing agreement is deemed invalid or void.
Typically, absent a contract, there would be no remedy for the subcontractor’s harm. However, under the theory of unjust enrichment, the subcontractor may recover a remedy.
It will be up to the court to determine whether the benefit received by the homeowner supports a claim for unjust enrichment. The court must conclude that the facts of the case sufficiently present a benefit acquired by one party at the expense of another party.
The remedy for an unjust enrichment claim is restitution. Restitution is a return of the benefit provided to the other party and is most commonly a monetary remedy. A monetary remedy is a return of the money value of the benefit received by the defendant in the case.
A claim for unjust enrichment is not concerned with providing the harmed party with what they expected under the quasi-contract. For example, the subcontractor in the preceding example would recover damages amounting to the value of the materials left at the homeowner’s property.
The subcontractor would not be able to recover damages amounting to lost profits if the job were completed. Additionally, if the subcontractor did not take on additional work due to the project, those lost job profits are not recoverable. These are otherwise called compensation damages.
Contact Adam Curley
Proving unjust enrichment in Texas can be a difficult task. As with any case, unjust enrichment causes of action involve specific and particular facts that courts must review and analyze with particularity. A trusted and experienced business attorney like Adam Curley can help you determine whether you have a claim for unjust enrichment and will work to resolve the case in your favor.
The Curley Law Firm has practiced for years in the field of business litigation and wants you to succeed. Contact Adam Curley today if you believe you have a claim for unjust enrichment.