Owners and contractors should always avoid undertaking a project without a contract. But if they do build the project without a contract, the British Columbia Court of Appeal has recently recognized that the party which received the benefit of the work or supplies must pay a fair amount to the party which provided them.
This may not be a novel proposition. But what is novel is that the courts now recognize this situation as an "ineffective transaction" which falls within a discrete category of unjust enrichment.
While the result in this case may come out of left field so far as construction law is concerned, it is a good one for that branch of the law. It recognizes that an "ineffective transaction" constitutes a comprehensive classification to which the principles of unjust enrichment may be applied.
The BC Court of Appeal provides a comprehensive basis for a court in Canada to assess equitable compensation if a construction contract is ineffective for any reason.
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Constitutional Law Updates
DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.
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