Liability for work done where contract is denied: Contractual and restitutionary approaches

• Main Authors: YIP, Man, GOH, Yihan
• Format: text
• Language: English
• Published: Institutional Knowledge at Singapore Management University 2012
• Subjects: contract; restitution; unjust enrichment; pre-contractual liability; Commercial Law; Contracts
• Online Access: https://ink.library.smu.edu.sg/sol_research/1106; https://ink.library.smu.edu.sg/context/sol_research/article/3058/viewcontent/Liability_for_work_done_where_contract_is_denied__Contractual_and.pdf
• Institution: Singapore Management University

This paper explores the divide between the law of contract and the law of restitution in dealing with the different situations that arise from one party commencing work prior to the conclusion of a formal contract. It argues that contract and unjust enrichment each have a proper role to play in dealing with such cases. First, it argues against a purely contractarian view that such cases should be exclusively resolved by the law of contract, through an implied collateral contract. Such a technique, applied vigorously, would result in nullifying the concept of “essential terms” and an artificial construction of parties intentions. Second, it dispels the myths that the law of unjust enrichment is inadequate to deal with the problem, by clarifying the enrichment test and the unjust factor to be applied in such cases. It will be shown that the defendant s assumption of the risk of financial responsibility for the benefit is key to establishing these two elements of the claim.