Is There a Defence of Good Consideration?

Abstract

This essay examines an unresolved question in English law: is there a defence of good consideration to a claim for restitution of an unjust enrichment? It argues that there is no defence, as such, of good consideration. Rather the main issues thought to be raised by this defence relate to the much bigger question of the interplay between the ‘unjust factor’ and the fact that the enrichment was owed by the claimant to the defendant. It is possible to deal with this interplay by treating enrichment owed as a defence and this approach derives strong support from the United States Restatement Third: Restitution and Unjust Enrichment. However, the preferable strategy is to treat the fact that the enrichment was owed by the claimant to the defendant as an ‘upfront’ matter relating to prima facie liability, with the legal burden of proof being on the claimant, and not as a defence. At a deeper level, this involves recognising that the unjust factors and the civilian ‘absence of basis’ approaches are closer than has traditionally been thought.

Keywords: restitution, unjust enrichment, good consideration, restatement third