New Bad Bunny Lawsuit Highlights Unjust Enrichment and Contract Law

Contracts form the foundation of nearly every business transaction in California and across the United States. Parties use them to hire employees, license a service, or, as in musician Bad Bunny’s case, feature a private home in a short film.

Bad Bunny faces a lawsuit in Puerto Rico over his recent album’s short film, which featured a private home later recreated for his concerts.

While the homeowner executed a contract with Bad Bunny’s management team for use of his dwelling in the short film, he now alleges he did not agree to further use. The homeowner claims fans are visiting the property to take photos, violating his privacy. He further alleges that the artist profited from his property’s likeness without fair compensation, claiming unjust enrichment.

What is unjust enrichment in California?

Unjust enrichment is a legal principle based on fairness, used when one party unfairly gains a benefit. The party that wrongfully received the benefits must return the benefit to the aggrieved party through restitution.

A person unjustly benefits when they profit at another’s expense, and no valid contract or legal reason allows them to keep it. Here, in California, a plaintiff establishes unjust enrichment by showing the defendant:

• Received a physical or non-physical benefit from the plaintiff.
• Unreasonably retained or accepted the benefit at the plaintiff’s expense.
• Kept the benefit without compensating the plaintiff, considered to be unfair or inequitable.

Parties file an unjust enrichment claim when no formal contract exists to govern the situation, cover the specific benefit given, or provide fairness.

What is an example of unjust enrichment?

A textbook example of unjust enrichment occurs when a homeowner hires a painter to paint their house, but the painter accidentally paints the neighbor’s house. If the neighbor sees the mistake but does not let the painter know, and enjoys the benefit of a freshly painted home, the neighbor may be unjustly enriched.

Real estate transactions, intellectual property disputes, and instances of unpaid benefits, goods, or services may call for an unjust enrichment claim.

What are common defenses to unjust enrichment in California?

The application of unjust enrichment differs from court to court. Defenses to this equitable claim include:

• Estoppel – The defendant thought payment was unnecessary because of the plaintiff’s words, silence, or actions.
• Doctrine of Unclean Hands – The plaintiff was purposely deceitful or acted in bad faith; therefore, they cannot receive relief.
• Gift Principle – The plaintiff cannot make an unjust enrichment claim if they voluntarily give a benefit without expecting payment in return.
• Valid Contract – A sound, enforceable contract that regulates the same subject matter will usually supersede an unjust enrichment claim.

What makes a contract valid in California?

Under state law, three elements establish a valid contract:

• Offer – Both parties signing the contract must comprehend each specific term and individual obligations.
• Acceptance – All parties must agree to the contract’s terms.
• Consideration – The parties must both agree to exchange something of value, such as money, a promise, or an action.

Courts examine what parties said and did, not their private intentions, when assessing a contract’s validity. If the plaintiff fails to prove all three elements, the court will rule that the parties did not form a contract.

Breach of Contract

A violation of a valid contract requires a breach of contract claim, not unjust enrichment. To recover damages for a California contract breach, a plaintiff must prove:

1. Both parties entered a contract.
2. The plaintiff met nearly all the required obligations, or the contract excused them from those they did not meet.
3. The plaintiff met the conditions the defendant needed to perform their obligation(s), or the parties excused them, so the defendant had no obligation to perform.
4. The defendant failed to complete a contract term required or conducted a prohibited action.
5. The defendant wronged the plaintiff.
6. The defendant’s breach of contract caused the plaintiff’s harm.

State law gives breach of contract claims a statute of limitations of two years for verbal contracts, and four years for written ones, beginning on the date of the violation. Written contracts may include provisions for dispute resolution, venue, and attorney fees.

Unjust Enrichment vs. Breach of Contract

Both unjust enrichment and breach of contract are attempts to recover damages by a wronged party; however, the similarities stop there. A plaintiff cannot file for unjust enrichment if an enforceable contract exists, however, the claims may both be pled in the alternative.

Unjust enrichment in California primarily intends to provide restitution and fairly restore the plaintiff to their position before the defendant unjustly enriched themselves.

Final Thoughts

Although the Super Bowl halftime performer’s lawsuit is in Puerto Rico, jurisdictions across the United States observe similar principles of fairness and equity. Bad Bunny’s potential restitution will depend on several factors, including whether the opposing party can prove its claim and whether the artist’s enrichment directly connects to the plaintiff’s loss.

A Business Litigation Attorney can help examine a contract’s provisions to determine whether there is a valid breach of contract claim or potential equitable relief under doctrines such as unjust enrichment are available.

Heidy A. Nurinda is a Business Litigation, Intellectual Property, and Franchise & Distribution Attorney at Lewitt Hackman.