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CASES
Unjust Enrichment and Contract
Peter Jaffey*
Benedetti v Sawiris was concerned with the measure of a quantum meruit, and in particular
whether a ‘subjective’ or ‘objective’ measure should be preferred. The Supreme Court addressed
the issue broadly in line with the approach in the mainstream academic literature on unjust
enrichment, according to which this is a problem of how to measure benefit. The article argues
that this unjust enrichment approach is misguided because it obscures the role of agreement and
conflates transfer and exchange, and that a contractual analysis of the case would make the issues
clearer and easier to resolve.

INTRODUCTION

On the face of it, Benedetti v Sawiris1 (Benedetti) is a case on a narrow and technical
point on the measure of the quantum meruit in the law of unjust enrichment,
but it is significant beyond this in what it says, or implies, about the law of unjust
enrichment generally and its relationship with the law of contract.
The facts of the case are complicated, but so far as they are relevant for present
purposes they can be summarised quite simply. Benedetti approached Sawiris to
see if he would be interested in collaborating in the acquisition of a company
called Wind. The original idea was that Sawiris would become a shareholder
along with Benedetti in a new company established to take over Wind, but most
of the funding for the acquisition would come from other investors that
Benedetti would find. This was set out in the Acquisition Agreement. It seems
to have been envisaged that Benedetti would profit from the venture as an
investor or director in the new company when the Acquisition Agreement was
implemented. In the end, however, no other investors were found and so the
Acquisition Agreement was abandoned. Sawiris decided to continue with the
takeover by providing the funding himself, and Benedetti continued to work on
his behalf towards the acquisition on this new basis, though there was no longer
any written contract governing the relationship between them, and there was no
explicit agreement for Benedetti’s remuneration. The acquisition of Wind by
Sawiris was eventually successful. Although Sawiris accepted that Benedetti was
entitled to be paid for what he had done, the two parties could not agree on the
amount, and Benedetti sued Sawiris on various bases including contract and
unjust enrichment. By the time the matter reached the Supreme Court, the only
issue was the measure of recovery in unjust enrichment, Sawiris having accepted

*Brunel Law School.

1 [2013] UKSC 50.

© 2014 The Author. The Modern Law Review © 2014 The Modern Law Review Limited. (2014) 77(6) MLR 983–1008
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that he was liable in unjust enrichment, and the other bases, including contract,
having been rejected by the lower courts.

THE CONTRACTUAL CONTEXT

The significance of the claim in unjust enrichment cannot be appreciated

except in its contractual context. Normally payment for the supply of goods or
services is governed by contract. A party may do something for another party
without a contract, knowing that he is not entitled to be paid for it, though
perhaps hoping that he will be paid, or that he will subsequently secure a right
to be paid by making a contract. For example, a window cleaner might clean
a window to demonstrate the quality of his work, or an architect might send
a plan to show his idea for a project. In this way, a supplier might do work
and incur costs, and he might confer a benefit on the other party, but the
traditional understanding, certainly so far as contract law is concerned, is that
there is no right to be paid.
Consider an alternative possible rule: one party, the supplier, may simply
confer a benefit on another party, the buyer, and then, if he intended to be
paid rather than to confer a gift, he is entitled to be paid for his work, the
price to be set by a court if it is not agreed by the parties. It goes almost
without saying that this would in general be a far worse rule. One might say
in its favour that the purpose of a contract is to achieve a mutually beneficial
exchange of goods or services for payment, and that this alternative rule would
also achieve this, provided that the price set is fair. A fair price would be a
price that is less than the value the recipient attributes to the benefit he has
received, and enough to cover the supplier’s costs and leave him what he
would regard as a sufficient return for what he did in providing the benefit.
But of course different people have different resources and different prefer-
ences, and are in different circumstances with different plans, and so they may
place very different values on the benefit or on an acceptable return for the
work. For many possible recipients of benefits there would be no price that
they would be willing to pay that the supplier would consider sufficient, and
so no fair price at all, and even where there might be a fair price it would be
very difficult to say what it is. The advantage of requiring an agreement is, of
course, that the parties take on the responsibility for agreeing the terms of
exchange, so that someone only has to pay for a benefit if he has determined
that it is worth at least what he has to pay for it under the contract, and a
supplier will perform only if he has determined that the price is acceptable.
The contractual approach, first, respects the autonomy of the parties over the
use of their resources; secondly, it means that the price and the remedy
awarded reflect the parties’ valuation of the costs and benefits of the exchange;
and, thirdly, it allows the parties to allocate the risks of changes in the costs
and benefits of the exchange.
However, there are circumstances in which the alternative rule might be
appropriate. Where it is impossible or impracticable for the parties to negotiate
with each other, and it is also clear that they would have negotiated and reached
an agreement if they could have done, it may be justified to recognise a liability

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 Peter Jaffey

for payment. This is typically the position in the case of ‘necessitous interven-
tion’, where the claimant saves the defendant or his property from harm in an
emergency where negotiation was impossible and the defendant would certainly
have sought and paid for assistance if he could have done.2 One might treat in
a similar way the situation where goods or services are supplied but no genuine
agreement is reached because of a mistake by one or other or both parties.
Although the alternative rule may be defensible in these types of case, if the
contractual rule is adopted (as of course it should be and has been), it is surely
clear that there is no room to apply the alternative rule where there is no
impediment to contracting and no mistake. The alternative rule should not
operate to allow a supplier simply to confer a benefit and demand payment
without taking the trouble to make an agreement first. This would completely
undermine the process of negotiation leading to contract, which is based on the
assumption that only if an agreement is reached can there be any liability to pay
for a benefit conferred. It would be bound to create uncertainty and to lead to
opportunistic and disingenuous behaviour in tendering and negotiations.
If and when the alternative rule does apply, it is illuminating to say that, in a
manner of speaking, the court makes a contract for the parties. Of course this is
not literally the case – it is in the nature of an agreement that it can only be made
by the parties. But the rationale of the law is to secure a mutually beneficial
exchange of goods or services for payment, which is what the parties try to
secure through a contract. One can reasonably say that liability in the absence of
a contract is assessed by extension from or by analogy with contract. One might
say that there is an imputed or simulated contract.3 There is no fiction in the
sense of applying a rule that operates on the basis of facts that are taken to be true
but are not. There is no false assumption that there is in fact an agreement.
Thus one might say that the contractual context includes the basic rules (1)
that parties who make an agreement are bound by it, (2) that, where the parties
have made an agreement, liability for payment is governed by the agreement, (3)
that in the absence of an agreement parties are not liable to pay for a benefit if
contracting was feasible, ie, there was no mistake or impediment to contracting,
and, one might add, that (4) where contracting was not feasible there may
sometimes be a liability for payment by analogy with contract to secure a fair
exchange. One might say that these rules form an extended law of contract, or
at least a contract-oriented legal regime governing exchange.4 These rules, or at
least the first three, are surely taken for granted by ordinary business people in
negotiating their contracts. They represent at least the starting point of the

2 See generally A. Burrows, The Law of Restitution (Oxford: OUP, 3rd ed, 2011) ch 18.
3 There are a number of contractually-oriented approaches in the literature for this type of case,
including S. Stoljar, The Law of Quasi-Contract (Sydney: The Law Book Co, 2nd ed, 1989); S.
Levmore, ‘Explaining Restitution’ (1985) 71 Virginia Law Review 65; I. M. Jackman, The Varieties
of Restitution (Annandale: Federation Press, 1998); P. Jaffey, The Nature and Scope of Restitution
(Oxford: Hart, 2000) ch 3; S. Hedley, ‘Implied Contract and Restitution’ (2004) 63 CLJ 435; and
more recently D. Priel, ‘In Defence of Quasi-Contract’ (2012) 75 MLR 54. See also D. Campbell,
‘A Relational Critique of the Third Restatement of Restitution §39’ (2011) 68 Washington and Lee
Law Review 1063.
4 Generally reflected in the contractually-oriented approaches, ibid.

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traditional approach to contract. The problem now, as Benedetti demonstrates, is

that this traditional position is being put at risk, to no obvious advantage, by
recent developments in the law of unjust enrichment.5
There is another preliminary point to make about the legal context before
addressing Benedetti directly. Claims arising under this contract-oriented regime
governing exchange can be contrasted with an altogether different type of claim.
If C owns property that comes into the possession of D without a valid transfer
of ownership, C can normally recover it. (This is not of course as straightforward
as it might seem but it is not necessary to pursue it here). C recovers what he was
already entitled to and there is no injustice to D who was never entitled to it.
Where C pays money to D by mistake or where C’s money reaches D without
C’s authority for the transfer, C can recover the value of the transfer. Here C
may not recover the same tangible thing, and the claim may not be understood
as a matter of property law, but nevertheless the claim recovers for C something
that he originally had, which was transferred to D and can be returned. The thing
recovered is the money as wealth or intangible value, which existed before the
transfer and persists after D has received it. It subsists independently of C and D
and so can be transferred from C to D and returned to C. This is so whether the
money is embodied in a tangible form or takes an intangible form such as an
investment or a contractual right of payment. Some would say that this sort of
claim is still fundamentally a matter of property, but, in any case, it has essentially
the same rationale. It protects C’s pre-existing right to his money.
This is quite different in principle from a claim for payment for services. The
provision of services does not involve the passage to D from C of a thing,
tangible or intangible, to which C was entitled and that is capable of being
returned to him. The provision of services may cost C nothing and the benefit
to D may not be in the form of anything that comes from C and endures in D’s
hands and is capable of being restored to C. The services may simply provide D
with a transient experience, for example. Even if they do cause an enduring
change or generate a thing for D, D does not acquire something that C
previously had. Payment for services is not the return of something transferred.
The two types of claim raise quite different issues, in the case of a mistaken or
unauthorised transfer the appropriate regime for the protection of pre-existing
property and wealth, and in the case of services the appropriate regime for
exchange as discussed above.6 Unfortunately, the law of unjust enrichment treats
a non-contractual claim for payment for services as analogous to the claim to
recover a mistaken payment, and assimilates these very different types of claim
under a common framework for unjust enrichment. This obscures the distinc-
tion between them, and undermines the contractually-oriented regime for claims
for payment for services.

5 See further P. Jaffey, ‘Restitutionary Remedies in the Contractual Context’ (2013) 76 MLR 429.
cf R. Grantham and C. E. F. Rickett, ‘On the Subsidiarity of Unjust Enrichment’ (2011) 117 LQR
273; see also R. A. Havelock, ‘The Valuation of Enrichment in the Supreme Court: Benedetti v
Sawiris’ (2013) 21 RLR 97.
6 See generally Stoljar, n 3 above, and the other works referred to in the same footnote.

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 Peter Jaffey

THE BASIS FOR THE UNJUST ENRICHMENT

CLAIM IN BENEDETTI

In Benedetti the claim was in unjust enrichment, and, on the face of it, the effect
was to allow a claim for payment for services provided, without reference to any
agreement, in the absence of a mistake and with no impediment to contracting,
even though the parties were dealing with each other and possibly in negotiation
over terms. As discussed above, this is inimical to the law of contract and should
be a matter for serious concern. The underlying problem is that the law of unjust
enrichment obscures the true character of a claim for payment for services.
This was not exactly the problem in Benedetti, however. The position is more
complicated. It seems that in Benedetti there was actually an agreement between
the parties. As Lord Neuberger put it, there was a contract ‘arising from the
parties’ words and conduct . . .’, and ‘it must be at least arguable that there would
be implied into the contract a term that [Benedetti] should be paid a reasonable
sum’,7 which would normally be described as a contractual quantum meruit. In
my view it would have been preferable if the matter had been dealt with in this
way, though possibly this avenue was not open to the Supreme Court.
One might think that under the unjust enrichment approach the presence of
this agreement was irrelevant, but this was not actually the case. Curiously it
appears that the presence of the agreement between the parties was actually a
necessary condition of the unjust enrichment claim. For an unjust enrichment
claim, there must be an ‘unjust factor’.8 This is the category of reason that justifies
a claim for restitution for unjust enrichment in the circumstances in question.
The unjust factor here was given as ‘failure of consideration’, which in this
context is understood to mean not that there is no consideration in the ordinary
contractual sense, but that the benefit is conferred on a basis that fails, or on a
condition that has not been satisfied.9 There is room for argument over what
exactly this means. Can a supplier unilaterally and privately specify that he is
supplying a benefit on the basis that he is to be paid for it, and then demand
payment? This would exactly reproduce the alternative rule. In fact, it seems to
be accepted that there can be a failure of consideration only when there is an
agreement, of some sort, between the parties.10 Presumably the rationale for this
is to protect the recipient’s freedom to choose what benefits to pay for, to ensure
that the exchange is beneficial to him – the same reason, of course, why it is
normally said, in the contractual context, that, rather than applying the alterna-
tive rule, a contractual agreement is required for liability to arise.
Thus, despite appearances, the position in Benedetti was not that the alternative
rule was applied in circumstances where the parties could perfectly well make an
agreement. The claim was actually based on agreement, but in the form of a
claim in unjust enrichment. The effect of invoking the law of unjust enrichment

7 n 1 above at [177].
8 The concept of the unjust factor is due to P. Birks, An Introduction to the Law of Restitution (Oxford:
OUP, rev ed, 1989).
9 See for example, n 1 above at [86] per Lord Reed.
10 This seems to have been the view in this case and has support in the literature: eg, Burrows, n 2
above, 372.

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is simply to get around restrictive conditions or remedial limitations in the law

of contract although, again, this is obscured by the understanding of the claim as
a claim to recover a transfer. The law would be more coherent if it either denied
a claim or developed the law of contract to allow a contractual claim based on
the agreement.11 This is of direct relevance to Benedetti, because, as discussed
below, the problem in the case is that an essentially agreement-based claim was
forced into an unjust enrichment framework that was not really adapted for it.
An analogous problem arises where an agreement has given rise to a valid
contract. It is said that there can sometimes be a non-contractual quantum meruit
in respect of some part of the performance of the contract. This was not in issue
in Benedetti but it receives implicit support.12 Again it is based on the idea that the
principle of unjust enrichment provides an alternative basis for making someone
liable to pay for a benefit that he has agreed to pay for, which can arise
concurrently with a contractual claim based on the agreement, based presumably
on the assumption that the claim serves to recover a transfer. But it is difficult to
see what basis there is for requiring payment for part performance of the contract
other than the agreement itself or why a claim based on the agreement should
not be regarded as contractual.13

THE REMEDY

The legal issue identified by the Supreme Court was apparently quite simple. For
the purposes of the claim in unjust enrichment, the measure of recovery was the
value of the benefit received by Sawiris from Benedetti, and the question was
whether this benefit should be measured ‘objectively’ or ‘subjectively’. Accord-
ing to the court, the objective measure of the value of services is their market
value, whereas the subjective measure is the value actually attributed to them by
the recipient, which could be higher or lower than the market price. If a
recipient values the benefit at less than the market values it, the issue is whether
he can rely on a principle of ‘subjective devaluation’ to reduce the measure of
recovery from the market price, and if he values it more highly than the market,
the question is whether the claimant-supplier can insist on ‘subjective revalua-
tion’ to justify a higher measure of recovery.14 Here it was subjective revaluation
that was in issue, because Benedetti argued that there was evidence that Sawiris
valued the services more highly than the market, but subjective devaluation was
considered first, as a step in the argument and because it is the more common
case.
One problem concerning valuation is not explicitly addressed in the judge-
ments. As I have said, the unjust enrichment claim is conceived of as undoing or
reversing a transfer and thereby removing a benefit, as in the case of a mistaken

11 This has commonly been argued by opponents of the unjust enrichment approach though it now
appears in Burrows, n 2 above, 372.
12 See eg n 1 above at [31] per Lord Clark.
13 As argued in Jaffey, n 5 above.
14 These expressions are again derived from the unjust enrichment literature, in particular Birks, n 8
above, 109–110.

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 Peter Jaffey

payment, but in this sort of case the claim is better understood as securing
payment for a benefit and so effecting an exchange. The real issue is not the value
of the defendant’s benefit or gain, but the appropriate price for it. This is clear
where the quantum meruit is contractual, and it is equally true here where it is
non-contractual. The objective value or objective price is the ordinary market
price. However, as the court discussed, there may be a specialist market price, the
price in a sub-market for suppliers and buyers with the particular features of the
parties involved.15 Furthermore, where there is no actual market at all, one can
ask what a reasonable person in the recipient’s position would have had to pay.16
As I understand this, it is an assessment of what would have been agreed between
the parties taking account of objective or public circumstances, which is
described as a market price, though it is not a price ascertained from an actual
market. These are variants of the objective price.
By contrast, the subjective price is the price that would have been agreed by
these parties in the light of all the factors that would actually have influenced
them in deciding whether to contract, including their private preferences, plans
and resources.17 If the parties do actually negotiate, they may typically accept the
market price if there is one, but they may instead arrive at a different price, a
subjective price in this sense. The market price merely represents the price at
which supply meets demand. It does not mean that there is necessarily a
mutually-beneficial exchange for the parties at that price or that there cannot be
a mutually beneficial exchange at another price. A buyer might insist on a lower
price and a supplier might well agree to a lower price, even though he makes less
than he would at the market price, if this happens to be the best option open to
him in the circumstances.
In Benedetti, if there had been a contractual claim based on the agreement, the
remedy would have been a contractual quantum meruit. This is ‘reasonable
payment’, normally understood to be payment at the market price.18 The
rationale is presumably that this was implicitly agreed. Parties who contract
without agreeing a specific price can be taken to have agreed to an objective
price, in the sense of the market price or the price that a reasonable person in the
buyer’s position would have had to pay. Since they chose not to negotiate a
price, it seems right that neither party should be able to insist on the subjective
price that they might have negotiated in the light of additional private consid-
erations. However, if a supplier confers a benefit in circumstances where there
was no agreement but the recipient is liable under the alternative rule, because
it was impossible to negotiate or because of mistake, normally the market price
should apply again, but here the assumption must be not that the parties
implicitly agreed to this, but that they would have agreed to it if they had
negotiated. Furthermore, it may well be justified to adjust the price on the basis
that, if the parties had been able to negotiate, they would have agreed a higher

15 n 1 above at [17] per Lord Clarke; at [111] per Lord Reed.

16 ibid at [17] per Lord Clarke.
17 On this understanding the subjective valuation is not really the recipient’s ‘subjective opinion of the
value’ (ibid at [12] per Lord Clarke), which suggests that the recipient’s valuation is a judgement of
the actual, objective value.
18 See eg E. Peel, Treitel on The Law of Contract (London: Sweet & Maxwell, 13th ed, 2011) 22–020.

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or lower price than the objective price in the light of private considerations. In
other words, here a subjective price is appropriate.
The claim in Benedetti was not in contract but in unjust enrichment. One
might think that, if one were to adopt a rule for a non-contractual, unjust
enrichment claim, it should be the approach applicable for the alternative rule,
in the absence of an agreement, so that the court should be prepared to depart
from the market rate according to subjective devaluation or revaluation.
However, the court said that the starting point for measuring a benefit in unjust
enrichment is the objective measure.19 Lord Reed offered the following expla-
nation for this:

The object of the remedy . . . is . . . to correct the injustice arising from the
defendant’s receipt of the claimant’s services on a basis which was not fulfilled. That
injustice cannot be corrected by requiring the defendant to provide the claimant
with the reward which either party might have been willing to agree. That is
because, in the absence of a contract, neither party’s intentions or expectations can
be determinative of their mutual rights and obligations. Nor can the court make the
parties’ contract for them: a contract which might have included many other terms
and conditions besides a price. In such circumstances the unjust enrichment arising
from the defendant’s receipt of the claimant’s services can only be corrected by
requiring the defendant to pay the claimant the monetary value of those services,
thereby restoring both parties, so far as a monetary award can do so, to their previous
positions.20

This line of argument might be appropriate for a claim to recover a mistaken

payment of money. For a payment of money, the transfer typically has a value
that corresponds to the claimant’s loss and the defendant’s gain. But for a supply
of services, with respect, it is surely not true to say that the ‘monetary value of
the services’, meaning the market price, is in general a measure of what the
claimant, C, has lost and the defendant, D, has gained, or that, by requiring D
to pay this sum to C, the law restores C and D to their original positions. This
is the error discussed above of conflating a claim for payment for services, which
gives effect to an exchange, with a claim to recover a transfer. Benedetti con-
cerned an exchange, not a transfer.
With respect to an exchange, the appropriate remedy is not the ‘monetary
value of the services’, as if it were the value of a transfer, but a fair price, a price
that will render the exchange mutually beneficial. If there was an agreement, it
is reasonable to take the market price as the price that should be paid, and the
reason is not that it is an objective measure of the value of a transfer, but that it
is reasonable to infer that this is what the parties agreed. The market price is not
in any way a neutral price, in the sense of being necessarily a fair or ‘even-
handed’21 price between these two parties as if it were the value of a transfer.
Although Lord Reed proceeded on the basis that the claim was not based on
agreement, it seems to me that it is only because there was an agreement that it

19 n 1 above at [15]–[16] per Lord Clarke; at [99] per Lord Reed; at [180] per Lord Neuberger.
20 ibid at [99]. See also at [123]. The other judges did not offer any comparable explanation.
21 ibid at [123] per Lord Reed.

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 Peter Jaffey

was justified to use the market price. If one were to ignore the agreement, it
would seem appropriate to try and determine a subjective price in the light of
whatever subjective factors would have influenced the parties if they had nego-
tiated, since this in the end would be a better way to determine what would be
a fair price as between these two parties. This counterfactual exercise of deter-
mining a subjective price in the absence of agreement does not of course draw
on actual intentions and expectations.
Consistently with this, the court proceeded to say that, although the objective
measure is the standard measure in unjust enrichment, subjective devaluation
should generally be allowed.22 The reason for this is not explored in the
judgments. Lord Reed’s argument quoted above seems to imply that it should
not be available. In Benedetti, subjective revaluation was in issue rather than
subjective devaluation. Although the court favoured subjective devaluation, it
was against subjective revaluation.23 The reason given was that subjective
revaluation is unnecessary to protect the defendant. However, the question is
whether fairness to the claimant calls for subjective revaluation if this will not be
unfair to the defendant. If a claim is allowed where there is no agreement, there
may be an argument for allowing the claimant the benefit of a higher price if the
parties would have agreed to this.
In any case, where there is ‘free acceptance’, according to the court, the law
reverts to the objective measure. The reason appears to be that, if the defendant
‘freely accepted’ the benefit, he cannot then deny its objective value and insist on
a subjective valuation. This argument might be attractive if the defendant freely
accepted the benefit on the understanding that he would have to pay the market
price for it, but not if his understanding was that he would not have to pay for
it at all, or that he would be liable at a lower price than the market price.24 Thus
Lord Reed preferred what he called the ‘choice of benefit’ principle.25 A
defendant’s liability should depend on the basis on which he chose to accept the
benefit.26 This approach is preferable, according to Lord Reed, because it
protects the defendant’s autonomy, in the sense of his right to control the
deployment of his resources. This seems correct as far as it goes, but the
defendant surely cannot unilaterally stipulate the basis on which the benefit is
supplied, any more than the claimant can. The only way to uphold the
autonomy or freedom to choose of both parties is to base the claim on agree-
ment. The choice of benefit principle to protect autonomy is really what is
behind the traditional requirement that claims for payment for benefits conferred
must be based on agreement, understood to mean confining the claim to
contract. Thus, again, the true justification for applying a market rate without
subjective devaluation in Benedetti is that the claim was based on agreement.

22 ibid at [18] per Lord Clarke; at [113]–[119] per Lord Reed.

23 ibid at [30] per Lord Clarke.
24 ibid at [25] per Lord Clarke. As pointed out by Havelock, n 5 above, free acceptance has not
generally found support in the literature, either as an unjust factor or as a measure of benefit.
25 n 1 above at [117].
26 Lord Clarke, ibid at [26], rejects what he understands as Lord Reed’s all-or-nothing approach, either
the market price or nothing, but Lord Reed, at [115], does not appear to understand the choice of
benefit approach in this way.

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Lord Reed said he preferred the choice of benefit principle to the principle of
subjective devaluation, but these are not really alternatives. As I have suggested,
the choice of benefit principle really implies that agreement should be preferred
as the basis for a claim for payment for a benefit, where agreement is feasible,
whereas the principle of subjective devaluation – the principle that the subjective
price should be preferred in order to take account of the particular preferences,
plans and resources of the parties in determining the value of the benefit – is
properly applicable, it seems to me, where it is justified to allow a claim in the
absence of an agreement, under the alternative rule.

THE STRUCTURE OF THE LAW ON CLAIMS FOR PAYMENT FOR

BENEFITS CONFERRED

The law of unjust enrichment is becoming increasingly well-established in

English law, but Lord Reed noted that ‘the most suitable analytical scheme’ for
this part of the law of unjust enrichment is still a matter for argument.27 In this
sort of situation, the law seems strikingly and unnecessarily complex. For com-
parison, here is a simple scheme for the law of claims for payment for benefits
conferred through the supply of goods or services, consistent with the contract-
oriented analysis suggested earlier, which is in my view closer to the traditional
common law: (1) Where there is an agreement that meets the conditions for a
contract, there can be a contractual claim. (2) In the absence of such an
agreement, there is no claim, unless agreement was impossible or impracticable
(including where it is precluded by mistake), in which case the law may in some
circumstances recognise a claim for payment. (3) For a contractual claim, the
price is the agreed price, and if it is not explicitly agreed, it is the objective price,
typically the market price. Where there is no agreement, and the law neverthe-
less allows a claim, the appropriate price is the subjective price, which may depart
from the market price, at least for the benefit of the defendant (subjective
devaluation). The outcome in Benedetti seems to be consistent with this scheme,
according to which the claim should have been addressed as an issue in contract,
and the measure was rightly objective, but of course this was not the approach
taken by the court.
Now compare the scheme adopted from the unjust enrichment literature and
applied in Benedetti: (1) Where there is an agreement meeting the conditions for
a contract, there can be a contractual claim. (2) There can also be an unjust
enrichment claim, which may arise in cases where agreement is impossible or
impracticable but is not confined to such cases. (3) To the contrary, there can be
an unjust enrichment claim on the ground of failure of consideration, which
appears to be based on an agreement that may or may not meet the conditions
for a contract. (4) The standard measure of recovery for an unjust enrichment
claim is the objective measure of the benefit. (5) However, where relevant, for
example in the case of a claim for payment for the supply of services, the standard
measure is the subjective measure, at least for the benefit of the defendant

27 ibid at [119].

© 2014 The Author. The Modern Law Review © 2014 The Modern Law Review Limited.
992 (2014) 77(6) MLR 983–1008
 Peter Jaffey

(subjective devaluation). (6) However, where there was free acceptance, or

possibly more narrowly where there was an agreement, as, it would appear, in a
case of failure of consideration, the law reverts to the objective measure.
On the face of it, the problem with the unjust enrichment approach is that it
leaves room for a claim for payment for services in the absence of an agreement,
even though the parties could easily have made an agreement. This would be
highly subversive of contract law and it is a matter for concern that the law may
have reached this position. But the real problem arising from Benedetti is that,
although the claim was in unjust enrichment, it was really based on an agree-
ment. Indeed, I suspect that this unjust enrichment scheme generally delivers the
same outcomes as the simpler more traditional contract-oriented scheme, but it
is complex and opaque. The underlying problem is that in a case like Benedetti
the true justice of the claim lies in the principle of agreement, the principle that
the parties to an agreement should be held to it, but instead of being dealt with
through the law of contract the claim is forced into the unjust enrichment
framework. This framework is constructed around the standard case of the
recovery of a mistaken payment, and is not designed specifically for agreements,
and so has to be adapted to take account of the true basis of the claim by the use
of what are in effect disguised contractual concepts such as ‘failure of considera-
tion’, ‘free acceptance’ and ‘freedom to choose’. It is the mismatch between the
form of the claim and its true basis that is the source of the unnecessary
complexity and opacity of the law, and in Benedetti it was behind the problem of
determining the appropriate measure, since this is liable to depend on whether
the claim is really based on an agreement or not. This underlying problem is not
confined to this type of case but arises whenever the law takes the form of a claim
in unjust enrichment. The recognition of a law of unjust enrichment, with its
own body of rules, and employing its own distinctive concepts, makes sense only
on the assumption that there is a certain general principle of liability to provide
a basis for it. In reality there is no such general principle, and the rules of unjust
enrichment, though constructed around such a supposed principle, have to be
adapted in different situations to give effect to whatever principle of liability is
actually relevant in that situation.28

28 Examples of this type of problem arising from the unjust enrichment fallacy are discussed in P.
Jaffey, Private Law and Property Claims (Oxford: Hart, 2007) ch 8.

© 2014 The Author. The Modern Law Review © 2014 The Modern Law Review Limited.
(2014) 77(6) MLR 983–1008 993
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