Unjust enrichment under the Obligations and Contracts Act

UNJUST ENRICHMENT

Article 55(1) of the Obligations and Contracts Act provides that a person who has received something without legal grounds, in contemplation of grounds that did not materialise, or on grounds that subsequently ceased to exist, must return it.

The distinction between the individual situations was explained in detail by Interpretative Decree No. 1 of 28 May 1979 of the Plenum of the Supreme Court in Civil Case No. 1/1979, which remains in force.

Under the first proposition of Article 55(1) of the Obligations and Contracts Act — initial absence of legal grounds — the situation arises where something was received on the basis of a void act and, in cases of voidability, where the transfer took place after the act had been declared voidable. It should also be noted that the transfer may have taken place without any legal relationship at all.

For the situation under the second proposition of Article 55(1) — grounds that did not materialise — at the time the sums in dispute were received there must have been no legal relationship between the parties justifying their receipt, while the parties expected such a relationship to arise.

The prerequisites for upholding a claim under the third proposition of Article 55(1) of the Obligations and Contracts Act are:

1) enrichment of the defendant, consisting in the acquisition of a pecuniary benefit;

2) impoverishment of the claimant;

3) a causal link between the two;

4) retroactive cessation of grounds that had previously existed for the transfer of the pecuniary benefit from the estate of the impoverished person to that of the enriched person.

Claims based on unjust enrichment are claims for an order to perform, and when upheld they enable the creditor to obtain a writ of execution.

If you have received something without legal grounds and a creditor has brought a claim against you, or if you have given something without legal grounds and wish to recover it, it is advisable to consult a qualified lawyer practising in the law of obligations.