3.5 unjustified enrichment

3.5 Unjustified enrichment



Unjustified enrichment continued

The last source of the law of obligations which will be discussed, is unjustified enrichment. Unjustified enrichment is when the estate of one person is enriched (made richer) at the expense or loss of another person, and there is no lawful basis on which the one estate should have been enriched at the expense of the other. For example, if party A accidently uses the wrong account number and pays party C R 800 000 instead of party B, then party C has been enriched by the value of R 800 000, whilst party A has suffered a loss of R 800 000. In those circumstances, party C has been unjustly enriched – i.e. C has no right to keep the money, as there was no legal relationship between A and C, and therefore C is obligated to give the money back. 

The requirements are quite simple. Firstly, a person’s estate must have been enriched (this person is usually the defendant in a court case, so they shall be referred to as such in this section). This could either mean an increase in money in a bank account, or an addition of an asset, both of which would never have occurred had it not been for the conduct of the person whose estate has decreased (‘the plaintiff’). The defendant is liable to pay whatever amount they were enriched with at the time the proceedings where initiated (Lotz, 2005: 209). If money was incorrectly transferred, and the defendant used a portion of it, then the plaintiff can only claim back that amount which was in the defendant’s possession at the time the proceedings where initiated. Secondly, the plaintiff’s estate must be impoverished. This means there must have been some type of loss in the plaintiff’s estate. Thirdly, the defendant’s enrichment must be at the expense of the plaintiff. This implies that the loss that the plaintiff suffered must correlate with the increase that the defendant made. There must be a relationship between the loss and increase of the plaintiff and defendant. The last requirement is that there must be no reason in law as to why the defendant should be enriched. The enrichment must be unjustified (Lotz, 2005: 209). In the example above, with the incorrect transfer into a bank account, party C is not entitled to the money, as it was a mistake on party A’s behalf. C must return the money as C was enriched without a valid reason in law. If, however, C performed contract work for A, and A paid C, but wants the money back as A is no longer satisfied with C’s work, then this requirement has not been met. There is now a legal relationship between A and C, and it is for the courts to determine whether A is entitled to get the money back or not. 


Unjustified enrichment occurs when one person's wealth increases at another's expense without legal justification. For instance, if party A mistakenly pays party C R 800 000, party C is unjustly enriched since there’s no legal reason for them to keep it; they must return it to party A. The key requirements are:

  1. Defendant Enrichment: The defendant (the enriched party) must have gained value, like money or assets, due to the plaintiff’s loss.

  2. Plaintiff Impoverishment: The plaintiff must have suffered a loss or decrease in their assets.

  3. Correlation: The defendant’s enrichment must directly result from the plaintiff’s loss — there should be a clear connection.

  4. No Legal Justification: There must be no legal basis for the defendant’s gain; otherwise, the enrichment is not unjustified.
    Example: If C was paid by mistake, they must return the money. But if A paid C for work, and now wants the money back due to dissatisfaction, no unjust enrichment is claimed because there’s a valid contractual relationship.