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What does a claim of “unjust enrichment” mean?

On Behalf of | Apr 14, 2021 | Common-Law Separation

In a divorce or separation, couples generally take great pains to divide any marital property or shared debt that was incurred during the time spent together. When a common-law relationship ends, however, the parties are given very little legal protection regarding asset and debt division. Without a cohabitation agreement in place, the physical assets simply revert to the ownership of whoever was originally responsible for them.

If one party believes that it would be unfair to allow the other party to leave the relationship without sharing their property, a claim based on unjust enrichment can be pursued. Unfortunately, these types of claims are difficult to prove. The partner must show that he or she contributed to the property, that the property benefited from the contribution and there is no reason for the partner to solely keep this benefit.

Contributions can either be direct or indirect and some examples can include:

  • Direct contributions: Depending on the relationship and the factors surrounding the property itself, it might be possible to show a direct contribution that was beneficial. For example, paying for a new roof on the house owned by your partner or managing the bookkeeping of your partner’s business allowing him or her to focus on growing and improving the company could be considered direct contributions.
  • Indirect contributions: Some contributions might be indirectly responsible for the growth and increased benefit of an asset. For example, one partner was responsible for caring for the children and home which allowed the other partner to complete their education and focus on growing a successful business. Since there is no specific value or receipt attached to the contribution, it can be considered indirectly beneficial.

Even if an unjust enrichment claim is proven, it is unlikely the contributor will be awarded an equal share of the asset’s value. The law considers the amount of contribution versus the total value of the asset to determine what a fair share might include. The partners can work together to decide how this share is satisfied – by cash, stock, interest in the company itself or by some other method. Do not hesitate to discuss your situation and concerns with an experienced family law lawyer.