Unjust Enrichment

Business litigation is a major focus of the attorneys at BerlikLaw. Commercial disputes typically involve written contracts, but sometimes business gets done on the basis of a "gentlemen's agreement" and no written contract is ever signed. Other times, there's no express agreement at all, written or otherwise; the entire transaction is conducted on the basis of an implied understanding, measured by the parties' past course of dealing or other factors. Enter the law of unjust enrichment. Unjust enrichment is an implied "quasi" contract theory based on the principle that one person may not enrich himself unjustly at the expense of another.

Under Virginia law, to recover unjust enrichment or "quasi contract" damages, a plaintiff must show that: (1) it conferred a benefit on the defendant; (2) with the reasonable expectation of payment; (3) the defendant knew or should have known of both the benefit conferred and the expectation of payment; and that (4) allowing the defendant to accept or retain the benefit without paying for its value would be inequitable. In other words, contract or no contract, if one business provides valuable services to another and both parties understand that the services are being provided in exchange for compensation, the party receiving the services can't avoid its duty to pay by merely pointing out the absence of a written contract. That would lead to an inequitable result, which the law does not allow.

Note, however, that a party may not recover for unjust enrichment or quasi-contract when an actual contract--express or implied--exists between the parties regarding the transaction. It stands to reason that an express contract, negotiated and expressly agreed to by the parties, should preclude the existence of an implied, contradictory agreement regarding the same subject matter. Thus, when an actual contract exists (and assuming it was not procured by fraud), the actual contract will govern the parties' respective duties and rights rather than any vague, equitable notion of achieving justice.

While the terms "quasi-contract" and "implied contract" are often used interchangeably, there are important differences. An implied-in-fact contract is a true contract, containing all of the elements required to form an enforceable agreement. We say the contract is implied simply because the agreement has not been reduced to writing or expressly vocalized in an oral agreement. If the parties' actions demonstrate the existence of an actual agreement, courts will infer an implied-in-fact contract. Unjust enrichment, on the other hand, is not dependent on the existence of a real contract; a quasi-contract will suffice. A quasi-contract is not a contract at all but rather an equitable remedy created by the courts to avoid unjust enrichment. Some courts refer to unjust enrichment as an implied-in-law contract.

At BerlikLaw, if the facts and law support an unjust enrichment claim, we will fight for your right to compensation, regardless of the existence of a written contract or verbal agreement. We know how much victory means to our clients. When the stakes are high, Virginia businesses trust BerlikLaw. Let us put our extensive trial and arbitration experience to work for you.