Breach of Contract and Unjust Enrichment
Under Pennsylvania law, a contract is binding is there is offer, acceptance, and consideration (i.e. some value given and received). Most oral contracts are valid in PA, except for the sale of real estates, leases, and some other exceptions. In PA, parties asserting claims for breach of contract must allege the following three elements: (1) the existence of a contract, including its essential terms; (2) a breach of duty imposed by the contract; and (3) resultant damages. The statute of limitations for bringing a breach of contract action is four years, whether the contract is in writing or verbal.
Consider the following hypothetical scenario:
A carpenter tells you he will install hardwood flooring in your living room for $1000.00. You agree and state the flooring must be installed a week from today.
Offer= “install hardwood flooring for $1000.00”
- Essential Terms = Price ($1,000.00), time, (a week from today), etc.
Acceptance= agreeing to the price
Consideration= Payment of $1,000 in exchange for the installation of hardwood floors.
A week goes by and the carpenter installs the hardwood flooring. However, when he goes to collect his $1000.00 payment, you refuse to pay because you “changed your mind.” You would, therefore, be in breach of contract. As previously established, a contract existed between you and the carpenter. There was a duty to pay the carpenter $1,000.00 imposed by the contract. As a result, the carpenter suffered damages of about $1000.00. The carpenter, hypothetically, could bring a breach of contract claim against you.
Unjust enrichment claims typically go hand-in-hand with breach of contract claims, depending on the facts of each case. Unjust enrichment occurs when one party is enriched at the expense of another in circumstances that the law sees as unjust. Under Pennsylvania law, a claim of unjust enrichment must allege the following elements: (1) plaintiff conferred a benefit on the defendant; (2) the defendant appreciated the benefit; and (3) acceptance and retention by the defendant of the benefits, under the circumstances, would make it inequitable for the defendant to retain the benefit without paying for the value of the benefit.
Applying these elements to the previous example, the carpenter may bring a claim for unjust enrichment.
(1) The carpenter conferred the benefit of new hardwood flooring on you
(2) You accepted and understand the full worth of the new hardwood flooring
(3) It would be unfair for you to retain the new flooring without paying the carpenter for his labor/materials.
It is important to stress that this is merely a hypothetical for purposes of explaining Pennsylvania law. Each breach of contract and unjust enrichment claim must be analyzed on its own unique set of facts. For assistance navigating contract claims contact an RMN attorney today at lawyer@RMN-law.com or 412-626-5626.