Unjust Enrichment

Legal Meaning

For a claim, an enrichment obtained at the expense of another’s assets or labor without a justified ground, and the legal ground of that transfer, are examined (TBK Article 77). Payment of something that is not owed, a payment made under an invalid contract, or the failure of an expected ground to materialize are the main examples.

Restitution may take the form of returning the enrichment in kind or paying its value. The part disposed of by a good-faith enriched person and the liability of a bad-faith enriched person are not the same. The statute of limitations is subject to special provisions.

A person who voluntarily makes a payment although there is no debt must prove, in claiming it back, that the payment was made in the belief that the payer owed the debt. For this reason, performance of a debt that has become time-barred or of a moral duty cannot be reclaimed (TBK Article 78). TBK Article 81, concerning what was given for the purpose of bringing about an unlawful or immoral result, is also reserved.

The restitution claim becomes time-barred under the statute of limitations two years after the entitled person learns of the right to claim back and in any case ten years after the enrichment (TBK Article 82). That the money has been spent does not by itself remove liability; the nature of the benefit disposed of and good faith are assessed under TBK Article 79.

Core Elements and Practical Criteria

• There must be no justified legal ground.
• The enrichment must have occurred at the expense of another’s assets or labor.
• The scope of restitution varies with good or bad faith.
• An invalid ground or one that did not materialize may give rise to a claim for restitution.

Practical Significance

The explanation on the bank receipt (dekont) showing for which debt or purpose the payment was made, the contract, correspondence and account activity should be preserved. Whether another contractual or statutory claim exists should also be evaluated.

Commonly Confused Concepts

• In a tort, an unlawful and faulty act is central; in unjust enrichment, a shift in assets without justified reason is central.
• For restitution claims arising from a contract, the validity of the contract and the provisions on its termination are examined first.

Practical Example

A payment made to a wrong bank account and not based on any debt may, if the conditions are met, be reclaimed under the provisions on unjust enrichment.

Frequently Asked Questions

Can every erroneous payment be reclaimed?

The legal ground of the payment, the payer’s knowledge of the debt and the special limitations in the law are examined.

Does liability end if the enriched person has spent the money?

Good or bad faith, the manner of disposal and whether the enrichment continues affect the scope of restitution.