Definition
The principle that a person should not be allowed to retain a benefit obtained from another without paying for it when there is no legal basis for the enrichment — the law requires them to make restitution.
Unjust enrichment is the foundational principle of the law of restitution and quasi-contracts. Under Sections 68-72 of the Indian Contract Act, 1872, the law imposes obligations to pay for benefits received even without any agreement — to prevent one person from enriching themselves at another's expense without legal justification. The elements: (a) the defendant was enriched; (b) at the plaintiff's expense; (c) the enrichment was unjust (without legal basis). The remedy is restitution — restoring the plaintiff to their original position by requiring the defendant to return the benefit or pay its value.
Statutory Definition
Section 70, Indian Contract Act, 1872: 'Where a person lawfully does anything for another person, or delivers anything to him, not intending to do so gratuitously, and such other person enjoys the benefit thereof, the latter is bound to make compensation to the former in respect of, or to restore, the thing so done or delivered.' Section 72: 'A person to whom money has been paid, or anything delivered, by mistake or under coercion, must repay or return it.' Both sections are quasi-contractual provisions that prevent unjust enrichment.
Etymology & Origin
From 'unjust' (not just, unfair) + 'enrichment' (the state of being made richer, from 'enrich' — to make wealthy). 'Unjust enrichment' is an enrichment that is not just — one that lacks a legal basis and therefore cannot be retained by the recipient.
Full Legal Analysis
Unjust Enrichment: The Law of No-Free-Lunch
The law of unjust enrichment fills the gap between contract law (which requires an agreement) and tort law (which requires a wrong). When a person receives a benefit from another without agreement and without committing a tort, but retaining the benefit would be unfair, the law of unjust enrichment provides a remedy. The principle: no one should be allowed to profit from another’s loss without a legal justification for the profit.
Quasi-Contracts Under ICA: Sections 68-72
Indian law codifies specific quasi-contractual obligations to prevent unjust enrichment: (a) Section 68: Necessaries supplied to a person of unsound mind or minor — the supplier is entitled to reimbursement from the incapable person's estate. (b) Section 69: Reimbursement for payments made on another's behalf to protect their interest. (c) Section 70: Non-gratuitous benefits — if A, not intending to give a gift, does something for B or gives B something, and B enjoys the benefit, B must compensate A. (d) Section 71: Finder of goods — the finder must compensate the owner and is entitled to compensation for expenses. (e) Section 72: Money paid by mistake or under coercion must be returned.
Quantum Meruit: Reasonable Value for Services
Where a contract fails or is void but one party has performed services for the other, the performing party may claim 'quantum meruit' (as much as was merited/earned) — the reasonable value of the services rendered, to prevent the other party from being unjustly enriched by the performance. The Supreme Court has applied quantum meruit extensively to government contracts where the contract formalities were not completed but the work was done and accepted.
“Unjust enrichment is the law of fair dealing between persons who are not in a contract. When I do something for you at my expense, and you benefit without paying, the law says: pay for what you received. You cannot pocket a benefit and say you owe nothing just because we made no agreement. The law will not permit that.”
This Term in Indian Statutes
Indian Contract Act, 1872, 1872
"Where a person lawfully does anything for another person, or delivers anything to him, not intending to do so gratuitously, and such other person enjoys the benefit thereof, the latter is bound to make compensation to the former in respect of, or to restore, the thing so done or delivered."
Section 70 ICA: unjust enrichment prevented — if one person benefits from another's act without payment, they must compensate
