Unjust enrichment and contract

• Main Author: TANG, Hang Wu
• Format: text
• Language: English
• Published: Institutional Knowledge at Singapore Management University 2020
• Subjects: Contracts
• Online Access: https://ink.library.smu.edu.sg/sol_research/3402; https://search.library.smu.edu.sg/discovery/fulldisplay?docid=alma99380333602601&context=L&vid=65SMU_INST:SMU_NUI&lang=en&search_scope=Everything&adaptor=Local%20Search%20Engine&tab=Everything&query=any,contains,Research%20handbook%20on%20unjust%20enrichment%20and%20restitution&offset=0
• Institution: Singapore Management University

This chapter considers the relationship between unjust enrichment and contract. It critically examines the now discredited ‘implied contract’ theory of restitutionary obligation, by which courts fictionally imputed a contract pursuant to which the defendant agreed to repay the plaintiff. The result was the longstanding obfuscation of unjust enrichment within contract. The chapter further examines the principle that a claim for unjust enrichment law may usually only operate if there is no valid contract between the plaintiff and the defendant. This is arguably to prevent the subversion of the parties’ agreed distribution of risk. That logic means, however, that restitution might theoretically be available even in cases involving valid contracts, provided that the agreed contractual risk allocation is not undermined. This is consistent with leading authorities of the High Court of Australia and with the courts’ assertion that restitution is precluded if the terms of a contract between the parties expressly or impliedly exclude an unjust enrichment claim. The chapter then considers the implication of this approach for cases where restitution is sought following the breach of a contract, when the contract is void, or when it has failed to materialise as expected. The chapter concludes by considering the controversial question of the extent to which a court should take into account the terms of any failed contract in valuing the defendant’s enrichment in a restitutionary claim.