When the parties fail to reach a formal (or informal)  agreement that contains the requires elements of a  contract, a claim may still exist based on their  dealings.

Unjust Enrichment

This involves a situation where the parties do not  have a contract, but one party has conveyed a benefit  on the other and it would manifestly unjust unless the  party receiving the benefit pays something for it. This  type of claim triggers the equity side of the court,  which also handles injunctions. The issue is fairness,  but again, there must be no contract between the  parties for unjust enrichment to apply. Often, parties  make the mistake of thinking that because a contract  is not “fair” or the other party is not acting “justly,”  unjust enrichment will apply.

Promissory Estoppel

This is also called “detrimental reliance.” Here, again,  this applies when the parties do not have a contract,  but one party made a statement and the other  reasonably relied on it to his detriment. The courts will compensate the relying party to the extent of her  reliance.

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Key Topics:  Essential Terms | Oral Versus Written Agreements  | Statute of Limitations  | Breach of an Agreement