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Unjust Enrichment and an Express Contract

Posted by James Juo | Jul 13, 2023 | 0 Comments

“Unjust enrichment is a judicially created remedy designed to avoid benefit to one to the unfair detriment of another.” Lawry v. Palm, 192 P.3d 550, 564 (Colo. App. 2008).

In Colorado, unjust enrichment requires that: “(1) defendant received a benefit (2) at the plaintiff's expense (3) under circumstances that would make it unjust for the defendant to retain the benefit without commensurate compensation.” Robinson v. Colorado State Lottery Div., 179 P.3d 998, 1007 (Colo. 1994); Lewis v. Lewis, 189 P.3d 1134, 1141 (Colo. 2008), as modified on denial of reh'g (Aug. 18, 2008). A guiding principle is “the commonality of purpose of the parties.” Lewis, 189 P.3d at 1143 (considering situations involving failed gifts or failed contracts between close family members or confidants). The “mutual purpose” of the parties should govern the third prong of unjust enrichment. Id.

As a judicially-created equitable cause of action, unjust enrichment arises from a “contract implied in law.” Lewis, 189 P.3d at 1141. And a party cannot recover for unjust enrichment “where there is an express contract addressing the subject of the alleged obligation to pay” because the express contract precludes any implied-in-law contract. Pulte Home Corp., Inc. v. Countryside Cmty. Ass'n, Inc., 2016 CO 64, ¶ 64, 382 P.3d 821, 833 (Colo. 2016); Interbank Invs., LLC v. Eagle River Water & Sanitation Dist., 77 P.3d 814, 816 (Colo. App. 2003) (“a party cannot recover for unjust enrichment by asserting a quasi-contract when an express contract covers the same subject matter because the express contract precludes any implied-in-law contract”); see also Dudding v. Norton Frickey & Assocs., 11 P.3d 441, 445 (Colo. 2000) (“courts will refuse quantum meruit recovery when expressly contrary to the provisions of the written contract between the parties”).

Two Exceptions

Two exceptions would be when (1) the express contract fails or is rescinded, or (2) the claim covers matters that are outside of or arose after the contract. Pulte Home, 382 P.3d at 833 (citing Dudding, 11 P.3d at 445 and Interbank, 77 P.3d at 816, respectively). Thus, a party may be entitled to some recovery based on the unjust enrichment of a defendant when the plaintiff has no alternative right under an enforceable contract. Backus v. Apishapa Land Cattle Co., 44 Colo.App. 59, 61-62, 615 P.2d 42, 44 (1980).

The attorneys at Thomas P. Howard, LLC litigate cases nationwide including in Colorado.

About the Author

James Juo

James Juo is an experienced intellectual property attorney. He has successfully litigated various intellectual property disputes involving patents, trademarks, copyrights, and trade secrets. He also has counseled clients on the scope and validity of patent and trademark rights.


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