FLK1 · Contract

Unjust enrichment & restitution

SQE1 revision notes — the key rules, leading cases and common traps for this topic, in plain English and current to 2026.

CON.14 — Unjust Enrichment & Restitution

Restitution reverses a defendant's gain at the claimant's expense. It is not based on breach or a promise; it fills the gap where there is no enforceable contract.

The four-stage test (Banque Financière de la Cité v Parc (Battersea) [1999]; Benedetti v Sawiris [2013] UKSC 50)

Was the defendant enriched? (received money, services, goods).
Was it at the claimant's expense? (a direct transfer of value from C to D).
Was the enrichment unjust? — you must point to a recognised "unjust factor", not a general sense of unfairness.
Are there defences?

Unjust factors (must identify one)

Mistake — payment under mistake of fact or law (Kleinwort Benson v Lincoln CC [1999] confirmed mistake of law counts).
Failure of basis / consideration — the basis for the transfer failed. The orthodox rule still requires the failure to be total: if C got any part of what was bargained for, the claim normally fails. A developing exception allows a claim on a partial failure where the benefit is severable and apportionment is possible (e.g. money paid for distinct, separable items). Treat this as an emerging qualification, not a settled replacement of the total-failure rule.
Duress, undue influence, free acceptance, necessity.

Key remedies / measures

Quantum meruit — reasonable value of services where work done but no agreed price (Benedetti: the objective market value is the starting point, capped by what D actually valued/subjectively accepted).
Quantum valebat — reasonable value of goods supplied.
Where money paid, claim is for the sum received.

Defences

Change of position (Lipkin Gorman (a firm) v Karpnale Ltd [1991]) — D in good faith changed position relying on the receipt, so it is inequitable to repay in full. Bad faith / wrongdoing defeats it.
Estoppel, bona fide purchase, ministerial receipt, passing on (limited).

Common SQE1 traps

It is a separate cause of action from contract and tort — don't analyse it as breach.
A valid contract bars restitution: you cannot use unjust enrichment to get a better deal than (or to bypass) a subsisting contract.
You must name a specific unjust factor — "it would be unfair" is not enough.
Enrichment must be at C's expense — a benefit conferred via a third party usually fails this (no "leapfrogging").
Benedetti point: D's subjective devaluation can reduce quantum below market rate.
Mistake of law now counts (post-Kleinwort Benson) — old learning said otherwise.
Failure of basis is still presumptively total — don't assume a partial failure grounds a claim unless the benefit is severable and apportionable.

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In January, a doctor negotiating the sale of his medical practice tells the buyer, truthfully, that the practice generates around £2,000 a month in income. Contracts are not signed until May. Between January and May the doctor falls seriously ill, stops practising, and the patient list collapses, so that by the time of signing the practice earns almost nothing. The doctor says nothing about this change. The buyer, still relying on the January figure, completes the purchase and then discovers the true position.

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