How to Enforce an Unwritten Contract in Alabama: Unjust Enrichment and Other Claims

I often get calls from people who are seeking to enforce a contract. While many of these contracts are written, I frequently see situations where someone is trying to enforce a contract that was never written or signed. Written contracts do give a great baseline and reference point for the obligations each party owes, as well as expected damages that can be claimed. However, just because a contract is not written, i.e., a “verbal contract” or “oral contract,” doesn’t mean they can’t be enforced.

I wrote previously on when contracts have to be in writing in Alabama. There are certain contracts in Alabama that do need to be in writing unless they fall under specific exceptions. As a general rule though, there are many types of contracts that can be enforced even if they’re not in writing. Fortunately, Alabama law provides a remedy grounded in fairness: Unjust Enrichment, also known as a Quasi-Contract.

This article will explain the procedure and claims that can be made to enforce or defend a contract that is not written. While I may not cover everything here, I encourage you to give me a call at the number above or schedule a consultation if you are facing an issue with enforcing any type of contract, including verbal or oral contracts.

What is a Quasi-Contract?

Unlike a standard contract where two parties explicitly agree to terms (an express contract), a Quasi-Contract (or Contract Implied in Law) is a legal fiction created by the court.

It does not matter if the other party never intended to pay you. Under Alabama law, the court imposes this obligation to prevent “manifest injustice.” The principle is simple: a defendant should not be allowed to retain a benefit provided by the plaintiff if doing so would be unfair.

The 4 Elements of an Unjust Enrichment Claim

If you are seeking recovery in an Alabama court, you generally must prove four specific elements to the reasonable satisfaction of the finder of fact (based on Alabama Pattern Jury Instructions 11.18):

1. Value Provided: You must prove you provided something of value (a benefit) to the defendant.
2. Request or Acceptance: You must show the defendant expressly or impliedly requested the benefit, or knowingly accepted it. Liability arises when someone accepts services and the benefits that come with them.
3. Fairness Requires Compensation: You must demonstrate that, under the specific circumstances, fairness dictates you be compensated.
4. Unjust Retention: Finally, you must show that allowing the defendant to keep the benefit without paying would result in unjust enrichment.

“Implied in Fact” vs. “Implied in Law”: What’s the Difference?

For business owners in Florence, understanding the distinction between these two legal concepts is critical for litigation strategy:

• Contract Implied in Fact: This is a “true” contract. It has all the elements of a standard contract (offer, acceptance, consideration), but the agreement is inferred from the conduct of the parties rather than written words. The court looks for a mutual intent to contract.
• Contract Implied in Law (Unjust Enrichment): This claim disregards the intentions of the parties. It is imposed by law purely to prevent an unfair result.

Note: If a valid, express contract already exists covering the same subject matter, you generally cannot claim unjust enrichment. The written contract rules supreme.

Recovering Your Money: “Money Had and Received”

Sometimes the issue isn’t unpaid labor, but money that was transferred improperly. In Alabama, this is handled through an action for Money Had and Received (MHR).

Historically rooted in the common law action of assumpsit, MHR is an equitable action used to recover money that the defendant received through mistake or fraud. To win an MHR claim (per APJI 12.12), you must prove:

• The defendant received money due to mistake or fraud.
• The money rightfully belongs to you.
• Equity and good conscience require the money be returned.

This is a powerful tool when a transaction goes wrong, or when funds are sent to the wrong party, as it focuses on restitution rather than technical contract rules.

What Damages Can You Recover?

The goal of these claims is restitution, not punishment. The measure of recovery is typically based on Quantum Meruit(Latin for “as much as he has deserved”).

• Reasonable Value: The court will award the “reasonable value” of the goods or services you provided. This often requires expert testimony or industry standards to establish what that value is in the current market.
• Disgorgement: The focus is on the benefit the defendant received. The court compels them to “disgorge” that value to you.
• Prejudgment Interest: Because the amount due isn’t certain until the jury or judge decides it, you generally cannot recover interest for the time period before the judgment.

Important Considerations for Alabama Plaintiffs

Before filing a suit in Lauderdale County or elsewhere in Alabama, keep these factors in mind:

• Statute of Limitations: You typically have a two-year window to file these claims (under Ala. Code § 6-2-38(l)), as they are actions for injury to rights not arising from a contract.
• Illegal Contracts: If the underlying work was illegal or against public policy (e.g., work performed by an unlicensed professional where a license is required for public safety), the court generally will not allow you to recover via unjust enrichment.
• Mistakes happen: A plaintiff’s lack of care (making a mistake) does not necessarily bar recovery. The law recognizes that benefits given by mistake should often be returned.

Conclusion

A missing signature doesn’t always mean missing payment. Whether through Unjust Enrichment, Quantum Meruit, or Money Had and Received, Alabama law offers paths to recovery when equity demands it.

If you are involved in a dispute regarding unpaid services or disputed funds in the Shoals area, it is vital to analyze which of these theories applies to your case. If you would like to discuss your case or contract with me, feel free to give me a call at the number above or schedule a consultation. You can also read more about contracts on my Civil Litigation page or my Business Law page.