Most mature systems of law in the world have found it necessary to establish a way to compensate those who provide benefits to a person when there is no contract between them or no other legal relationship between them. In today’s world, it is called the doctrine of unjust enrichment, a modern doctrine dating back to the law of restitution which originated in England in the sixteenth century. In its basic form, the doctrine means that a person who has been enriched (or benefitted) at the expense of another person is required to make restitution to the other person to be just and fair. Unjust enrichment presupposes three things: firstly, that the defendant has been enriched by the receipt of a benefit, such as goods, services, or money; secondly, that the defendant has been so enriched at the plaintiff’s expense; and thirdly, that it would be deemed unjust to allow the defendant to retain the benefit without compensation to the plaintiff. In a nutshell, for recovery to lie, something must have been given, the thing which is given by the plaintiff must have been received and retained by the defendant, and the retention must be without legal reason or justification. With respect to the legal justification test, courts consider whether the plaintiff was under a contractual obligation or statutory obligation to provide the goods, services, or money. If there is a legal justification for receiving the benefit, the doctrine of unjust enrichment will not apply but some other legal concept may form the basis for compensation, such as a contract between the parties.
The doctrine has complex elements to it as the Supreme Court of Canada has stated in its decisions. A simple example will illustrate the basic principle. A house is being built in Haliburton by a general contractor for a Toronto owner. You are a sub-contractor to the general contractor providing electrical services for the house. Your contract is with the general contractor, not with the owner. The house is nearly built. You have not been paid by the general contractor and the general contractor then goes bankrupt. Although you have no contract with the owner, you have provided services to the owner who has received a benefit by your work for no legal reason or justification. You cannot sue the owner for payment on the legal basis that the owner breached the contract with you because you have no contract with the owner, but you may sue the owner on the legal basis that the owner has been unjustly enriched by your work relying upon the doctrine of unjust enrichment.