UNJUST ENRICHMENT- SWEDEN
Mårten Schultz 2000
UNJUST ENRICHMENT- SWEDEN
“The concept of unjust enrichment is in Swedish law considered far too unclear for it to be referred to for any claim.”
Hugo Tiberg Fordringsrätt
“[T]he main rule in Swedish law must be that an enrichment someone has made on someone else’s expense may be kept.”
Torgny Håstad Tjänster utan uppdrag
Unjust enrichment is a rarely discussed concept in the contemporary Swedish legal discussion. There are different reasons for this, one being the severe criticism from proponents of the Swedish legal realist movement and other scholars. This attitude has lead to the concept having an unclear status in positive Swedish law. But that does not mean, however, that the notion have no role whatsoever within the legal system. It is clear that the courts rarely accept “unjust enrichment” as a ground for a successful action. I will in this paper try to present some of the main features of the notion of unjust enrichment in Swedish law. As will be stressed Swedish law has not accepted unjust enrichment as a separate legal institute, even though the idea of enrichment occurs in different areas of legislation. There is also one group of exceptions to the refutation of independent enrichment rules where the courts have used the concept of unjust enrichment without basing it on enrichment notions in specific statutory provisions, in some old cases of timber rights. These special cases will be presented separately
A preliminary comment on the sources is in order. As with negotiorum gestio, mentioning of unjust enrichment occur scarcely in the legal sources. There is no mention of unjust enrichment in the index of the most used Swedish collection of legal statutes Lagboken or Svea Rikes Lag. However, some statutory provisions, as will later be presented, have been interpreted in the doctrine to have a connection with the notion of unjust enrichment. From the courts may some decisions be found in which the concept is referred to, besides the exceptional timber decisions. There is for instance one debated decision from the Supreme Court from last year where the court discussed questions concerning unjust enrichment. This decision has been thoroughly criticised by Jan Hellner, the main authority on unjust enrichment in Sweden. Jan Hellner’s thesis Om obehörig vinst (1950) is the only monograph on unjust enrichment in modern Swedish doctrine. Hjalmar Karlgren, who was, among other things, one of the leading Swedish authorities on tort law of the previous century, has also written on the subject in Obehörig vinst och värdeersättning from 1982, which was published after Karlgren’s death. Karlgren had previously addressed some of these questions in the essay “Utan det vises, att det honom till nytta använt är” published as early as 1934. Another account of enrichment notions in statutory law was given in the article “Principen obehörig vinst i svensk lagstiftning” by Fritjof Lejman from 1949. Also, since the legal sources are otherwise silent on the subject, special attention should be given to Svante Bergström’s review of Hellner’s thesis in Svensk Juristtidning 1951. Besides these works mentioning of unjust enrichment in the Swedish doctrine have mostly been brief comments in general accounts of, for instance, contract law.
The following presentation will account only for the Swedish discussion. However, some short comments should be initially given of what has been said in the other Nordic countries. Where the Swedish writers, most importantly Hellner, have been sceptical towards the idea of unjust enrichment some Danish academics have been more favourable, and a defence of a general rule of unjust enrichment came from the influential Henry Ussing in his Erstatningsret (1937). Before this also Julius Lassen, although very critical, left a door open for a general enrichment rule (in Handlingar paa fremmed Formuerets omraade, 1880 and Kort Fremstilling af de saakaldte Kvasikontraktsmaessige Retsforhold i dansk Ret, 1881). In opposition to these opinions is Anders Vinding Kruse who, on the whole, opposed a general legal institute on unjust enrichment in his Restitutioner (1950). From Finnish law one older work written in Finnish (which means that I am not able to give any account of it’s content) may be mentioned, Hakulinens Perusteettoman edun palautus. Siviilioikeudellinen tutkimus from 1931, which has been said to follow the German and Roman ideas on the subject.
A few words concerning the terminology should be said. The Swedish expression for unjust enrichment is “obehörig vinst”, which is not literally translatable with the English term. The closest literal translation of “obehörig” would probably be “unauthorised” and “vinst” may best be translated with “profit”. In the discussion also other expressions have been taken as indicators of unjust enrichment, for instance the Swedish word “nytta” (“benefit”) is often taken as corresponding to enrichment.
The starting point of unjust enrichment in Swedish law follows from the introductory quotations; the concept of unjust enrichment has an insignificant part within the legal system. There is no independent legal institute of unjust enrichment in Swedish law, nor is there a generally accepted systematic view of “enrichment-law” as a distinct discipline or part of law. But this should not be interpreted as the idea of the law of enrichments of having no importance at all. There are in fact some cases from the courts were situations referred to as unjust enrichment have been tried and even where a claim based on a rule of unjust enrichment have been successful. And more importantly, the unjust enrichment notion is traceable in different specific statutory rules. Tiberg points out that you can not base a claim against someone merely on the ground of the other person being “unjustly” enriched on your expense, but says that there are, for instance, situations were the amount of a compensation is calculated on the enrichment someone has made. Hellner has said that even though Swedish law does not allow unjust enrichment in itself to be referred to as a ground for a claim, as for instance the rule in BGB § 812 may be used in German law, the concept of unjust enrichment may still be used as a summarizing principle for situations in which someone is obliged to compensate another person, and where the scope of compensation is decided on the basis of the profit. This will be further examined below. The common characteristic, if there is such a common characteristic, of the different rules that are presented as enrichment-rules is that they use a similar way of calculating the compensation and the scope of the obligation.
Swedish law is thus reluctant to use the concept of unjust enrichment, and rely instead on other rules. For instance are rules of damages often a preferred way of dealing with enrichment problems, for instance in situations when someone has used another person’s property in good faith (which is a paradigm example of unjust enrichment in German law). Also within the law of obligations are other ways of establishing the amount of compensation rather used, as for instance when a contract has been declared void and where one of the parties cannot return the property. We shall see that perhaps the most important competitor of the enrichment rule in Swedish law is a special rule for compensation called “värderegeln”, the value-rule.
But the insignificance of general enrichment rules is not only to be attributed to the fact that Swedish law prefer other approaches. Another reason is that the need for such a rule is not as important as in other legal systems, for instance in German law. In Swedish law one does not distinguish between transfer of ownership within the law of property on the one hand, and “kausal”-contract within the law of obligations on the other. As far as I understand it, this is one reason for using the notion of unjust enrichment in German law; to correct unwanted results in contractual situations were, for instance, the transfer of ownership was accomplished under the law of property but there was something wrong in regard of the causa which is a part of the law of obligations, for instance if the party entered the contract being under coercion. This need for a enrichment does not exist in Swedish law were one does not use the principle of abstraction in the law of property. According to Hellner, should these differences between the German and the Swedish approach should not be exaggerated; it may well be that the differences is rather a matter of terminology than practice. But on the other hand should it be noticed that some of the examples Hellner gives of enrichment rules in Swedish law has since his thesis was published changed with compensation rules that have no clear connection with the enrichment discussion. I think it is fair to say that the unjust enrichment concept have an even lesser importance in Swedish law today than it did when Hellner wrote his work on the subject.
In the discussion of the role of unjust enrichment in Swedish law, again with special reference to Hellner’s work, the concept has been analysed from the perspective of which different possible ways the concept could be used in the legal system. Hellner has distinguished between three major approaches. The concept of unjust enrichment may firstly be a motivation for legal rules, secondly a material rule in itself (as in the BGB) or thirdly, a term used to systematically present positive rules in the legal system that have the common characteristic of basing the calculation of a compensation on the gain, profit or enrichment of someone. These different approaches have all had their advocates (and adversaries) in Swedish law and will be presented one by one.
Jan Hellner has characterised the development, not restricted to the development in Swedish law, of the notion of unjust enrichment as first being used as a general principle, which were then seen as a ground for establishing positive legal rules, to later become a positive legal institute itself. In the first stage of development, unjust enrichment was considered more or less a part of natural law, and was then used to “explain” or motivate legal rules or specific legal conclusions with the argument that the result would otherwise lead to someone being unjustly enriched. An example: When someone has paid another person an amount of money in the mistaken belief he owed that person the money (in Sweden referred to as a paradigm example of condictio indebiti), the payer’s right of recovery of the money is based on the argument that the receiver would otherwise be unjustly enriched. The concept was thus a method of legitimising a specific rule or result, or even considered to be a general principle from which specific rules could be deduced. The main point of the criticism against this way of using the enrichment notion has been that the idea, in this was used, is nothing more than a circular argument, a vicious circle or a tautology. This criticism has been pointed not only against the concept of enrichment itself but also against the seemingly more precise idea of the enrichment being unjust. Hellner’s criticism is formulated in the following way, indicating the general attitude towards the notion in Swedish law:
“Unjust enrichment is a formula, which can be resorted to in well near every situation to hide the lack of rational consideration; a phrase that may be used to cover any kind of result that has been reached in an intuitive manner. […] The referring to [the idea of unjust enrichment] means in reality nothing more than a naked reference to justice and fairness in general, and should not be considered to be anything more than that.”
Hellner points to the fact that rules that have earlier been motivated with the argument that someone would, in the absence of the proposed rule in question, make an unjust enrichment, have been of very different kinds, which he takes as a ground for scepticism: A principle that may be used for such disparate phenomena (inter alia condictio indebiti, compensation in necessity situations, some situations of expropriation) could only have very little real content.
A similar attitude was earlier held by Lundstedt. Lundstedt was a proponent of the Scandinavian Realist movement and a disciple of the great Axel Hägerström. The influence of this movement over the Swedish legal discipline can hardly be exaggerated; although some of it’s basic tenets have been questioned lately. Addressing the rule of unjust enrichment, Lundstedt’s, somewhat complicated, arguments may be summarised as following:
“Unjust enrichment” is a concept, which is only used when the usual concepts of the law for some reason are not deemed necessary. When someone has borrowed money from another the obligation to give the money back is never based on arguments that the debtor would otherwise be unjustly enriched, even though he obviously would. The reason for this is that in these situations lawyers have other concepts to fall back on. The circular structure of unjust enrichment as a ground for legal rules is unusually apparent: One cannot reasonably treat the rule one wants to motivate, as if it already was in effect. Consider instead that the opposite rule was in effect. Then the enrichment would not be unjust but indeed just. Thus one can with the rule of unjust enrichment not come any further than to say that the rule is in effect if not it’s opposite is in effect, or that the rule is in effect if it is in effect. With every application of the rule must then other factors come into consideration if the rule is to have any practical value. The reason for setting up a rule that obliges debtors to repay the money is not reasonably motivated by an unjust enrichment rule but rather with the argument that such a rule promotes the function of credit in the economy. The same can be said with every rule which one may initially think has been founded on a rule of unjust enrichment; there are always some other reasons that lie behind.
As I understand Lundstedt’s argument, it may be interpreted in the following way. One rule that has sometimes been motivated with unjust enrichment-arguments is the rule that mistaken payments should be recoverable for the payer. The argument is then that the receiver would otherwise receive an unjust enrichment since he received the money without a legal ground, as one formulation of the rule reads. But say that the enrichment-rule is the other way around, that a received mistaken payment is a just enrichment. There are no logical objections to such a rule, even though it may perhaps seem less plausible (although not necessarily, such a rule could be motivated with the policy argument that it would influence people to make sure that payments are given to the right receiver, as we shall later see). For the argument to have any significance it thus required that other factors are taken into consideration as to what constitutes the “unjustness” of an unjust enrichment and so on.
Further attention has then be given to possibilities of making the principle more specified, for instance with some support in the idea that an enrichment must have a sufficient ground or otherwise be considered unjust. An obvious comparison here is the wording of the rule in the BGB. Hellner has said that this does not in itself give any indications on what is covered by the rule since the expression “without sufficient ground” is too vague.
With this criticism, the idea of a general principle of unjust enrichment has had difficulties to find support in the Swedish legal discussion. It would then perhaps be seen as I have given this discussion more importance than it deserves. The reason for this is, as will later be apparent, that the critical attitude in Swedish law is perhaps about to change. At least if one judges from a recent decision from the Supreme Court where the discussion of general principles of unjust enrichment was reopened.
In those jurisdictions where unjust enrichment is independently recognised it is, at least primarily, a positive rule, as for instance in the BGB in German law. It is then a more specified rule that is being used, according to which an enrichment on someone else’s expense without a legal ground, as the rule in the BGB states, should go back. Hellner examined what the content of such a rule would be, if it were to be considered for the Swedish legal system. In doing so, Hellner tried to find the basic elements of the rule in other jurisdictions.
Now, it may seem that when the idea of unjust enrichment as a motivation for specific decisions and rules was so vividly criticized by, inter alia, Jan Hellner, the same arguments should also apply for a positive enrichment-rule. This does not necessary follow from the previous critique, however. As a positive rule within the law, the notion of unjust enrichment would get more substance through its use in court decisions and doctrine. Hellner said that the rule in its current state of development would then have a function resembling that of the Swedish “culpa-rule” in tort law, that is, a rule which may originally have been based in natural law but which would now be a positive legal rule. It has been discussed whether such a rule should be imported into Swedish law. Such arguments have normally been made from the background of comparisons with other jurisdictions where the notion is more recognised than in Sweden. The conclusion of this discussion has so far been negative.
As said, Hellner examined the possibilities for an import of the rule in Swedish law, based on an examination of the rule’s content in other legal systems. This does not presuppose, however, a legislative import. On the contrary: The discussion have rather focused on whether a non-statutory rule should be imported into the legal system. Hellner also emphasized that a general principle of unjust enrichment had been used by the Swedish Supreme Court in cases of timber rights (see below) and it must thus be considered that it could occur again.
This leads to the question whether an imported enrichment rule could then be used as a legal ground for a claim or if it is to be perceived in a more restricted way, as a notion signifying the scope of compensation. (Another way of analysing the concept is to try to explain whether this notion in Swedish law would be seen more as a common feature in different rules or as a singular rule, which was pointed out by Bergström in his review of Hellner’s dissertation: Should one talk of one or several independent enrichment-rules within the law. This was a matter of some critique against Hellner’s thesis, that the difference between these two viewpoints and the consequences thereof was not sufficiently examined. In the modern Swedish discussion, most significantly in Karlgren’s work, the latter viewpoint is dominating; a pluralistic view on the concept of unjust enrichment. This will be further discussed in the next section.) The second more restricted view is traditionally considered as a refutation of recognising a general unjust enrichment-rule in the legal system. The common view in Sweden leans towards the second, more restricted, interpretation.
Hellner has said that the distinction is not as clear as it seems and concludes that the question whether the concept of unjust enrichment is a legal ground or a concept for signifying the scope of the compensation is mostly an pseudo-problem. Karlgren on the other hand argues that the distinction is real and of importance, even though it is difficult to understand what the different viewpoints actually mean and where the real conflict between the two approaches lies. Karlgren states that an obvious prerequisite for applying an enrichment-rule is that someone has been enriched; enrichment is thus a required legal fact. The question is then if the enriched party should have to accept some limitation of his enrichment and the grounds for inferring such a limitation. If no common denominator can be found in cases where such limitation have been inferred, but for the fact that the scope of compensation was based on the profit of the party, it does seem that the notion of unjust enrichment is only a collecting term but not a ground for establishing the right of compensation.
Before considering the third approach to the notion of unjust enrichment should an account of how the concept of unjust enrichment is conceived in the Swedish discussion be given: What is required for someone to be considered enriched and how is this established? What are the criteria for recognizing a rule as an unjust enrichment rule?
According to Hellner’s exposition, the unjust enrichment notion is composed of three parts: The enrichment requisite, the loss requisite and the legal ground requisite. 
The enrichment requisite may be established with two different methods.
1. According to the first is the enrichment the advantage someone got from a displacement of fortune. From the enriched party’s perspective is the only relevant factor that he actually has acquired the fortune.
2. The second method takes into account also the total change in the presumably enriched person’s fortune at large. Compensation for unjust enrichment is then calculated on the basis of the increase of this party’s fortune. This approach thus allows for considerations if the advantage was for some reason “lost” or if the enrichment became higher than the actual transfer of fortune.
How the enrichment in casu should be established is not certain, but the tendency in Swedish literature seems to have been to also take into account other factors than only the amount of the displacement. This is in accordance with the view in Swedish law that the enrichment rule is a compensation rule which is less severe for the debtor than obligation to pay damages or the value-rule. On the other hand it seems that Swedish law does not go so far as the German in crediting the debtor for changes in the amount of the enrichment. A special aspect of this question is whether the enrichment must still remain when the claim is raised. For instance, does it matter if the value of the property has gone down for some reason? If such considerations were not allowed to effect an amount of compensation, the debtor could have to pay an amount which is then higher than his actual enrichment, at that time. In Swedish law it seems that the general tendency is to not take such factors into consideration. Deductions are however allowed for different costs and similar posts, for instance, the debtor is naturally entitled to deductions for amounts that have already been given to the creditor. Possible payments from a third party, on the other hand, is not considered to have any influence over the establishing of an amount of compensation. It is also more uncertain whether the debtor may get a reduction if he in good faith has used the property or if he as a result has made expenses he otherwise would not have done. Say A has a claim against B on the ground that B, in good faith, has used his car and that A’s compensation for this shall be calculated on the basis of B’s enrichment. Will B then have a right to reduction of the amount for costs he has had on the car? To some extent the answer is yes, as will be further presented below. Lately, as also will be further examined, the general idea of how an enrichment, or rather a profit, should be established has been a matter of discussion. Hellner made a thorough examination of different factors that may influence the interpretation of what should be defined as an enrichment in his thesis, but did not explicitly confess to any of the two main approaches above. What constitutes a “vinst” in Swedish law is too ambiguous for any meaningful attempt of final definition.
Secondly is required that some party suffered a loss as a result of the other party’s enrichment. This condition has no independent importance, according to Hellner, but is dependant upon the enrichment test. But what if the enrichment of the enriched party is higher than the loss of the other party, what amount shall the debtor then pay? The creditor can in such a situation only be entitled to compensation within the limits of his loss. What then if there has been no loss? This may for instance be the case within intellectual property law, as Hellner frequently used for his examination. In the Swedish Copyrights Act (Upphovsrättslagen) there are no longer any rules on compensation for enrichment. Instead, if someone has infringed on a person’s intellectual property right he is obliged to give reasonable compensation for this, sect 54. The liability is strict. Generally, one would then probably fall back on the enrichment-test in these cases.
Thirdly, the enrichment must have been without a legal ground. Hellner has stated that this condition generally does not give any guidance for establishing whether a displacement of fortune was unjust in a specific case. There are no such guidelines for what should be classified as being “without a legal ground” so that the courts may use it. The enrichment is without a legal ground if and only if it can be reclaimed by the party who suffered the loss, and where such a right of reclaim is restricted to the enrichment. In other words: The legal ground requisite is only a systematic collecting term for different cases where a debtor’s obligation has been restricted to his enrichment. With this interpretation the unjust enrichment-rule thus dissolves into special different rules in which the legal fact is that someone has been enriched, other factors has been taken into account and of which no general judgment may be made and where the legal effect of this is that the debtor is obliged to give out compensation based on his enrichment.
Further guidance is then perhaps given from comparisons between the situation in question and other situations where the principle was previously used. Even though no common feature can be found of these different cases, one can still use the concept as a collecting term for those reservations a general enrichment rule must be supplemented with. So much is absolutely clear, that not all enrichments of parties can give the losing party a right of recovery.
In this regard the rule on unjust enrichment is acceptable in Swedish law, Hellner argues, since it is then not used as an explanatory concept. One can then talk of an enrichment rule anytime any court claims to have used a rule of enrichment. It can more be seen as a pedagogic method of categorization. The downside is that the question whether such an enrichment rule in practice should be said to be law or not is indifferent. Another consequence is that the rule in this way defined does not distinguish between situations where the rule was itself used a legal ground for a specific result and when the notion was only used to describe the amount of the compensation: As soon as an enrichment is recoverable it lacks a legal ground. Hellner conclusion can be described as whether one want to use the concept or not is a matter of systematic taste.
In his review of Hellner’s thesis, Bergström expressed an even more explicit aversion to the enrichment rule. According to Bergström can no common distinguishing feature be shown between the cases in which one has said that an act lacks a legal ground. Therefore, Bergström argues, the enrichment rule has no value. Because in this way the courts would have no guidance through it’s previous use and it is then meaningless to talk about a general enrichment rule. It can not be reasonable to talk of a general enrichment rule just because one court has once claimed the used the rule and it can no more be reasonable to talk of a general rule if there are now signifying feature in common for those cases in which the rule has been referred to. Such a rule is practically unusable.
This analysis leads to the attitude towards the unjust enrichment rule in contemporary Swedish law, that it is only meaningfully used as tool for examining cases or rules where the restriction of a compensation right was founded on the profit or enrichment of some party.
The third way of approaching the notion of unjust enrichment is then to use the concept as a label for a common feature in different specific rules or decisions. This is the favoured viewpoint in contemporary Swedish law, and will be the approach taken in the rest of this presentation. In the next section some disparate examples of specific statutory provisions in which the idea of unjust enrichment comes in will be presented. The common denominator of these provisions is that they, under some circumstances, acknowledge a right to compensation based on someone’s enrichment. These are considered as exceptions to the more favoured way of establishing the scope of a right to compensation in Swedish law, which is to base the compensation on the value of the property in question, if necessary with some adjustment. I will below make some comments on a recent decision from the Swedish Supreme Court where it seems that a general idea of unjust enrichment was once again used as a motivation for a concrete rule in a specific case, in this decision rules concerning condictio indebiti.
As has frequently been mentioned there are no general statutory legal rules on unjust enrichment in Swedish law. But there are provisions that have a connection with the concept as it was above presented. The most important rule in this regard is probably the last section of an old rule from 1734 in handelsbalken (The Commercial Code) Ch. 18 sect 3, which deals with questions concerning agency.  It should be noted that while the similar rule on negotiorum gestio in handelsbalken Ch. 18 sect 10 has an unclear status, the rule in Ch. 18 sect 3 was explicitly recognised to still be in effect by the legislator in a provision in avtalslagen, the Act on Contracts, (sect 27) from 1915.
According to the heading of handelsbalken ch 18, the chapter deals with “sysslomän” and ”ombudsmän”. From the modern perspective of the law of agents are these unclear terms. Especially the word “ombudsman” would for most people today have the connotation of a special public authority (which Swedish bureaucracy also has exported; the ombudsman). Also the word “syssloman” is somewhat obsolete. It may be seen as a collecting term for a variety of legal relations; agents, powers of attorney/proxy, commissionaires and procuration. It has been said that the legislators of 1734’s handelsbalk did not have clearly defined concepts of these different types of agents (or whatever word should be used as collecting term). It has also been said that the old rules from 1734 has little importance today due to later legislation in different areas which precedes as lex specialis. Section 3, however, has a special status due its recognition in the Act on Contracts in situations of powers of attorneys or proxy (Swedish word: fullmäktige, German: Vollmacht). I will hereafter use the word “agent”, since that is the literal translation of the old Swedish word “syssloman”, although its main importance seems to be in cases of powers. A special kind of power which is of significant importance is “uppdragsfullmakt”, “power of position”. A typical example of these special powers is the legal competence and authority of a clerk in a store. These powers are of special interest for the enrichment-rule in handelsbalken 18:3.
The wording of the section is the following in Swedish. It is only the last part that is considered to be an enrichment rule, here emphasized with italics.
“Handlar syssloman oredligt, brukar list emot honom, som fullmakt gav, vänder sig hans gods till nytta, lånar hans pengar ut, eller tager penningar upp i hans namn; svare till all skada. Vare ock den, som fullmakt gav, saklös i allt, vad syssloman, utom hans ombud eller vilja, av annan lånt, eller med någon slutit haver; utan det vises, att det honom till nytta använt är.”
A literal translation of the section is difficult since it is written in ancient Swedish, but the content is the following. The first part of the section says that if an agent acts dishonest against the principal, uses the principal’s goods for his own benefit, lends out the principal’s money or borrows money in the principal’s name, the agent is responsible for all damage that is hereby caused. From the second part of the section follows that the principal is not bound by actions taken by the agent under these premises, “unless it is showed to have been used for his benefit”. That is, the principal is only bound by the actions to the extent he was enriched.
If a principal appropriates property that an agent acquired on his behalf, knowing that the agent had exceeded his mandate (for instance bought something to a higher price), he is nevertheless obliged to fulfil the contract, that is, to pay for the goods. It does not matter if the third party knew that the agent entered into the contract without mandate or not in this case. (If on the other hand the principal did not know of the agent’s exceeding of his mandate, but the third party knew or should have known about this, the rule is probably still applicable.) And if the principal has been negligent in appointing the person in power or if he has given the agent unclear instructions he has to bear the consequence of the negligence and is obliged to compensate the third party, presumably in accordance with the enrichment rule in handelsbalken 18:3.
Of most interest here is then situation, that is, where the principal uses the property without knowing that the agent had exceeded his mandate. One can here distinguish between three different possible solutions. 1: One could let the principal bear the full risk of the agent’s behaviour and let the agent’s actions be binding for the principal the same way he would have been if the agent had not exceeded his mandate. This solution thus fully protects the third party interest. 2: One could let the principal be obliged to compensate the third party to some extent if he has benefited from the contract. Such compensation can be based on the enrichment of the principal. This alternative encompasses that the contract is not binding between the principal and the third party. 3: A last possible solution is to let the principal be obliged to, so to say, fulfil his obligations towards the agent to the third party. In other words, to let the third party take over the agent’s claim against the principal. Such a right may be of quite different value for the third party. For it to do the third party any good is naturally required that the third party has acquired a claim against the principal and that the claim has not been paid. On the other hand is this the most lenient solution for the principal, because he would seemingly be indifferent to whether he pays the agent or a third party. Different scholars have interpreted the enrichment rule in handelsbalken 18:3 in all these three ways, but the favoured approach seems now to be the second.
The problem arises most often in situations where the agent has purchased property on credit in the name of the principle or borrowed money in the name of the principal, but may also occur when the agent sold the principal’s property or other situations. Say, for instance, that the agent B continuously purchases rice on behalf of the principal A, who owns a restaurant, with the restriction of not purchasing rice to a price higher than X. On one occasion B purchases, in spite of the restriction, rice for a price higher than X, from a seller C. If A knows that the price was higher than X but uses it in his restaurant, he is obliged to pay C, according to general rules of contract law. If A does not know that the agent entered into the agreement with C to a higher price than X and uses the rice, handelsbalken ch 18 sect 3 is applicable. What this old rule actually implies, then, has been a matter of vivid debate. The rule seemingly says, according to the general interpretation, that the principal in these cases is obliged to fulfil the contract only to the extent that it was of benefit for him: The principal must compensate the third party to the extent he was enriched from the contract The further interpretation of this is also unclear, however. Say that the principle A in our previous example used all of the purchased rice in his restaurant: Is he then obliged to pay the full overprice to C since it was all of benefit for him, or is this price also to be adjusted, in some way? It seems that the principal must pay the full price for the property if it was of benefit for him, in our case the contractual price of the rice.
This rule apparently puts a quite heavy burden on the principal. What is of interest is then if it matters whether the third party was in good faith concerning the agent’s exceeding of his mandate. Again, this is not clear. In such situations the principal’s obligation to pay perhaps may be adjusted, although this is debatable.
A special factor that needs to be taken into consideration is the circumstances surrounding the contractual situation. It should be noted that modern Swedish law has had a tendency to protect weaker parts in legal relationships, for instance consumers. In cases of the earlier mentioned powers of position has this been taken as an argument for letting the principal bear the risk of his agent’s exceeding of mandate when dealing with consumers, especially if the agent himself is excluded from responsibility. This would then mean that the contract is basically binding for the principal. Whether this view is reflecting the law in practice should be left unsaid.
From the few court decisions it seems that the rule has been given a restrictive interpretation:
NJA 1949 s 313: Kihlskog handed over his car to Andersson, who had agreed to perform some repairing services on it. While the car was in Andersson’s custody, it got damaged in a collision. Therefore, Andersson turned the car over to a third party, Byström, who owned a repair shop in Stockholm. What happened thereafter was a matter of dispute between the parties. Byström stated that he knew that Andersson could not pay for the reparation himself and that he therefore waited for approval from Kihlskog, which he also got. In accordance with this, Byström demanded full payment from Kihlskog. Kihlskog refused to pay under the argument that he had not ordered the services from Byström, nor from any employee of his. When he some time after the collision visited Byström’s repair shop, the reparation was already done. He thought therefore that Andersson had ordered the services (which Andersson denied). Byström argued then that Kihlskog should be obliged to pay for the reparation regardless of whether the court should find that it was Andersson who had ordered the service, since Kihlskog would otherwise be unjustly enriched.
Svea Hovrätt (the court of second instance) found that it had not been established that Kihlskog had ordered the services from Byström. The Court also stated, laconically, that Kihlskog could not be obliged to pay for the reparation of the collision damages on some other ground either. The Supreme Court approved of the decision.
It seems that this decision shows a reluctance from the courts to accept claims for compensation for unordered services on the grounds of unjust enrichment. Situations such as these are close to negotiorum gestio-situations where the courts have been very unwilling to entitle gestor a right of compensation (which has been presented in another paper). Håstad has pointed out that the tendency from the courts seems to be more reluctant towards accepting claims, even when the reparations were useful for the owner.
Many of these cases would now fall under the special statutory regulation for consumer-relationships in konsumenttjänstlagen (the Act on Consumer Services) according to which (section 8) a service-provider in some situations may be allowed to perform additional, unsolicited, services and receive compensation for these (section 38). For a right to compensation is required that instructions from the consumer can not be obtained, that the price of the additional service is insignificant or low in comparison with the price of the ordered service, or that the service-provider has special reason to believe that the consumer wanted the services. (The service-provider is also obliged to perform some additional services if the consumer would otherwise risk serious damage). This raises a methodological question, to which extent can this provision be used for analogies, perhaps most importantly in non-consumer relationships? The general attitude seems to be that consumer legislation is motivated by such special considerations that they are not suitable for analogies outside consumer relationships.
Another rule that contains an enrichment-element is föräldrabalken (The Code on Parents and Children) Ch. 9 sect 7. This provision deals with situations in which a minor has entered into a contract and where the contract for that reason is cancelled. In such a situation must the party who entered into the contract with the minor return what he received, even if he can not get his own performance back, according to the main rule. There are rules that protects the party that entered into the contact with the minor: If the minor can not return what he received under the contract shall he give compensation to the other party if the consumed property was used in his household or was otherwise of benefit (i.e.: an enrichment) for him. What this entails is that if the minor A bought a bottle of whiskey from B and A drunk the whole bottle, he would nevertheless get his money back from B without being obligated to compensate B. If on the other hand A bought something that benefited him, say the book Gemeineuropäisches Deliktsrecht, A must give compensation for the value of the property.
In practice should the evaluation of whether the performance was of benefit for the minor be made in casu; the value of the enrichment is not to be evaluated from a general “objective” viewpoint but from the background of the circumstances under which it was given to the minor in the actual case. Secondly, the benefit should be objectively defendable from the viewpoint of a sensible guardian, which in reality is a significant limitation of the compensation-rule, especially since the burden of proof here is on the other party. It is furthermore clear that if the performance benefited the minor but this benefit later for some reason vanished, say for instance the minor without negligence lost the book of Gemeineuropäisches Deliktsrecht, this does not change the minor’s obligation to compensate the other party.
In the second sub-section are stated special rules for compensation when the minor acted fraudulent and similar situations.
Another enrichment rule may be found within the legislation concerning bills of exchange, that is växellagen section 74 (The Bill of Exchange Act). This rule, which was inspired by an old German rule in the Wechselordnung from 1848, came into force 1880 and was unchanged in the following Bill of Exchange Act from 1932, which is still in force. According to this rule may, when a bill of exchange becomes stature barred, the creditor still receive compensation for the debtor’s enrichment. A similar rule apply for cheques, according to checklagen section 57 (the Cheque Act). These special rules emanate from efforts to harmonise the legislation in Europe, which explains why these rules found their way into the Swedish system, despite Sweden’s reluctant attitude.
How the compensation according to these rules are supposed to be calculated in practise is unclear and have been a matter of discussion, especially concerning the rule in the Bills of Exchange Act. Different theories on how the enrichment should be calculated have been developed. The enrichment rules in these two acts are of a special kind, and will therefore not get any detailed presentation here. Some remarks of the purpose behind these rules may however be in order, since they are something of anomalies. It follows from the rules that when a bill of exchange or a cheque is stature barred may a new claim arise; an unjust enrichment claim. It seems somewhat peculiar that the fact that a claim has been stature barred could in itself entail the rise of a new, different, claim. The reason seems to be that if someone has a claim manifested in a bill of exchange, for instance, this claim generally has a ground in a “material claim”. For example: A buys a car from B who in return gives A a bill of exchange, which A himself keeps. If A does not in due time demand the money from B and the bill of exchange is therefore stature barred would B get the car for free if A could not claim payment for the car. B would then be unjustly enriched, as the argument goes. This is the background for these enrichment rules.
In Hellner’s book on unjust enrichment in Sweden, one category is presented in a special section outside the systematic examination of the concept in Swedish law, namely a group of court decisions concerning the right to cut and take timber. The reason for this special treatment is that Hellner’s exposition is systematically restricted to unjust enrichment outside contract, and the court decisions in the special section concerns contractual situations. Nevertheless has Hellner deemed it necessary to include these cases and the main reason for this is probably that these are the only cases where the courts actually has applied a general rule of unjust enrichment in recent times.
The decisions Hellner presents are by now fairly old, the last decision is from the 1931, but of a special interest since they deviate from what was earlier said, that compensation on the ground of unjust enrichment is not acknowledged in the absence of specific statutory regulations. In these cases the Supreme Court did recognise an enrichment-based right to compensation under special circumstances concerning timber. The importance of these decisions should not be overestimated. They should rather be seen as a special solution in situations that are probably not frequently occurring today. Both Hellner and Tiberg has emphasised that these decisions are not suitable for analogies. Nevertheless should some account of the cases be given.
The special circumstances of these cases was that a contract had been made which gave one party a right to cut and take timber on a land unit, but due to special reasons (either as a result of prohibition from the public authorities or because the maximal time limit had expired) this right could not be fully exercised. In the earlier of these decisions the Supreme Court did not consider if the displacement was in fact enriching for the party but based the compensation on the full value of the timber. Tendencies towards more enrichment based approaches could however be found in dissenting opinions of the Court (see Chief Justice Quensel in NJA 1914 s 290).
NJA 1887 s 375: A land unit on the island of Gotland was sold but the seller reserved the right to timber on the land (a right which had an estimated value of 500 rdr), a right which he thereafter sold for 3 500 rdr. A prohibition against cutting down trees on the land unit was taken, based on legislation that were in effect already when the land was sold. The buyer of the timber right claimed compensation from the owner of the land with 1 500 rdr, based on the full value of the remaining trees. The Supreme Court accepted the claim, although not unanimously.
Similar cases were tried in NJA 1892 s 411, NJA 1913 s 397 and NJA 1914 s 290. In three cases, including NJA 1887 s 375, the Court approved of the claims of the plaintiffs who received compensation for the worth of the trees covered by the prohibition. These cases thus let the seller of the right bear the risk of a prohibition and allowed the buyer of the right to recover the full amount when such a prohibition was issued.
The tendency on laying the cost for a subsequent prohibition on the land owner was consolidated under the 1920:s. Special considerations were given in cases were the right to timber was not given in a separate contract but as a reservation in the sales contract. A difference between these cases is that if the right to timber was sold through a separate contract, the seller has received remuneration that he then, in theory, can return. The most important of these latter cases is a rare decision from the Supreme Court in plenary assembly.
NJA 1925 s 184: A land unit was sold with reservation for the right to cut and take timber on the land for the previous owner. A timber prohibition was later issued based on a law that went into force after the selling of the property. The majority of the Supreme Court found that the seller was entitled to compensation based on the enrichment of the buyer, due to the increased value of his property. When estimating the enrichment, the Supreme Court took into account that the (new) owner had limited possibilities to dispose over the property.
Hellner has pointed out that special caution should be taken against obliging the buyer to give compensation in those situations were the timber right was excluded from the sales contract of a real estate. This would seemingly be an infringement of the parties freedom of contract, since an obligation for the buyer to give compensation to the seller is similar to forcing the buyer into a contract, since the parties in fact had excluded the right to timber from the sales contract. The buyer would also be forced into a contract which would in principle be costly for him; he could not dispose over the timber because of the prohibition but would have to pay for the rights with an amount based on the value it was supposed to have on the time the parties entered into the contract. (It should, however, be noted that the prohibitions were generally temporary.) This should be held aside from situations of the first kind, were the right to timber was sold separately, since in these cases the seller would have received pay for the right. But also these cases lay a heavy burden on the seller of the right. No concern was taken to whether the seller in good faith had disposed of the remuneration or if he actually had the financial means to return the money.
After the Supreme Court’s decision in NJA 1925 s 184 the tendency has been also in cases of independently sold timber rights, to base the right to compensation on the enrichment the land owner has had from the right to the trees. In these later cases the prohibition was based not on an act that existed already when the rights were sold but which was enacted afterwards. Hellner has concluded from the later decisions that it seems that the Supreme Court has changed their earlier approach of acknowledging a right of compensation also when the act was already in effect when the contract was entered. It is unclear if the right holder would in such a case even get compensation with an enrichment based amount.
The second category of cases deals with timber rights that were not exercised within the maximum time limit. The background is a statutory rule in the old nyttjanderättslagen (the Act of Usufructuary) ch 1 sect 7, which stated that a right of use to a real estate concerning forestry, including timber rights, could generally not be upheld for a longer time than five years. The right holder could then no longer use his right after five years had passed. A requirement was, however, that the landowner cancelled the contract. If the landowner did not cancel the contract after the five-year period, it continued to be in effect and if the right holder exercised the right after the five years had passed but before it was cancelled, he would not be obliged to compensate the landowner.
The cases in this category then concerned situations were the right holder had not used his right to cut and take timber within the five-year period and where the landowner on this ground cancelled the contract. The question in these cases was whether the landowner should have to compensate the right holder for his enrichment. All the cases tried in this category concerned rights that were excluded in a sales contract of the real estate, and thus not separate rights contracts.
Two decisions from the 1920:s came to different solutions in establishing a compensation right for the right holder’s losses. In the first case, NJA 1921 s 337, the Supreme Court established that the seller/right holder was entitled to compensation for the timber he was not able to cut due to the cancellation of the buyer. The amount of compensation the buyer was obliged to pay was based on the value of the trees at the time of the sales contract. It should here be noticed that the buyer had entered into a contract, which was in violation of the five year-rule and thereafter cancelled the contract. A difference between these and the cases concerning prohibition is that the buyer in these cases himself could cut and take the timber.
In another case the Supreme court came to a different solution. Also NJA 1925 s 530 dealt with timber rights excluded in a sale of a land unit. According to the contract would the previous owner have a right to cut and take timber for ten years after the sale. After the sale, the buyer of the land sold it to a third person. It was agreed upon, in the second sales contract, that the new buyer should respect the first owner’s timber right. But after five years had passed, the new owner claimed that the right holder should no longer have a right to cut and take timber on the land. The right holder, on the other hand, claimed that if his right could no longer be exercised, he would be entitled to compensation for the trees he had not used. The higher courts found that the first owner’s right could not be used for more than five years and that he did not have a right of compensation for not being able to fully exercise the right. According to Hellner is this decision difficult to interpret. The courts may have based its decision on the doctrine of tacit assumptions, but it is not explicit in the decision.
The Supreme Court also tried a third case, which decision is a compromise between letting the land owner pay the full amount of the unused timber right and not letting him pay any compensation at all. In NJA 1931 s 431 the Supreme Court considered a timber right which was let for 20 years. The right to timber constituted a significant part of the value of the property, and was by the Supreme Court estimated to have been worth 9000 rdr at the time of the contract. After five years the buyer cancelled the right. The right holder then claimed compensation for the land owner’s “unjust enrichment”. The Supreme Court found that the right to timber constituted a substantial part of the payment for the property and that the buyer should therefore be obliged to remunerate the seller, even though the buyer had a right to cancel the contract after five years had passed. The Court found that the seller was reasonably entitled to a compensation of 6000 rdr, after considering “the circumstances of the case”.
In this case the seller was compensated for the loss he was caused due to the cancellation of his right. But he was apparently not fully compensated, the amount was adjusted but on which grounds is not clear. However, it seems that the Court in this case made a compromise between the two decisions above.
These decisions form a special section of unjust enrichment cases in Swedish law. As have been repeatedly pointed out is the importance of these cases today unclear.
As far as I have been able to discover, the decisions concerning timber rights are unique in allowing a right of compensation for unjust enrichment in the absence of statutory rules. There have been other cases where the Supreme Court has tried if other exceptions should also be made.
NJA 1962 A 55: Lundberg worked for the Swedish navy during the second world war. Lundberg made sketches of an invention, a special armour for ships, that he thought could be of interest for the navy. He therefore handed in the sketches to the navy administration in 1939. Two years afterwards, in 1941, Lundberg received a call from an admiral, Tamm. According to Lundberg, Tamm told him that the navy was interested in the project and wanted him to further look into the possibilities of producing the armour and make more detailed drawings of the invention, but Lundberg was also told that this work was not to interfere with his normal duties. Lundberg was under the impression that he would get paid for this work. Tamm on the other hand said that he did not order Lundberg to perform the work, but was only interested in Lundberg giving comments on how his invention in practise could be of use for the Swedish navy. There were also other factors that suggested that Lundberg had not in fact been commissioned to perform the work. Lundberg did for instance not demand any compensation for his work until 8 years after the work was finished. The majority of the Supreme Court found, after taking the circumstances of the case into consideration, that the navy through Tamm’s actions did not order Lundberg’s work. The Court also found that Lundberg himself thought he had a commission to make the drawing and that he also would be compensated for this work. But this impression of Lundberg’s was not realized by Tamm, nor could Tamm under the circumstances been in such a situation that he should have realized that Lundberg was of this belief. It was not shown in the case that the navy had such benefit of Lundberg’s invention that they should be obliged to compensate him.
The minority of the Supreme Court (Chief Justice Conradi), however, came to another decision. Tamm must have realized that the work Lundberg would perform as a result of their discussion would require substantial expenditure of time. Under these circumstances, and since Tamm did not explicitly inform Lundberg that he would not receive pay for his work, it must be considered that Lundberg was commissioned to make the drawings. However, Tamm had not authority to enter into such agreements on behalf of the navy that was clear from the regulation of the navy administration. The navy was thus not bound by the agreement. After Lundberg handed in the completed drawings, however, the navy performed several investigations and tests of Lundberg’s invention. These drawings must have been of benefit for the navy. According to this, and in the light of the rule in handelsbalken ch 18 sect 3, sub-section 2, Lundberg should be entitled to compensation on the basis of the rules of unjust enrichment. Such compensation should be estimated on the enrichment of the navy.
Another case dealing with claims of unjust enrichment is NJA 1963 A 68, where the Supreme Court again dismissed an unjust enrichment claim.
As has been earlier said, the Supreme Court recently referred to the concept of unjust enrichment in a situation of condictio indebiti, which has lead to uncertainty whether the notion again has entered into the Swedish legal discussion. However, as has also been said, this decision has been severely criticised by Jan Hellner.
The case concerned condictio indebiti and is rather complex, but it may be valuable to give a rather detailed account of the special circumstances.
NJA 1999 s 575: Jacob K had different business relations with a bank Sparbanken Sverige AB, both privately and as a representative for different companies. As a representative for one company, Liano Shipping Ltd, Jacob K contacted Sparbanken on August 15, 1991, and said that an amount of 295 000 000 SEK would be transferred from another bank Nordbanken to Liano’s account in Sparbanken. He also said that Sparbanken would be contacted by the bank manager Henrik L from Nordbanken concerning this transaction. Jacob K explained that of the transferred amount should 25 000 000 SEK at first remain at the account in Sparbanken while the rest, the larger amount, was to be transferred to an account in a third bank, Svenska Handelsbanken. But Jacob K also explained how the 25 000 000 SEK should be disposed with. Of these money was 2 570 045 DEM (9 348 717 SEK) to be transferred to the account of another company Fortune Finans AB, which was in liquidation. This amount would then Fortune use for paying a loan which the company Ross Sea Shipping ltd, a company closely related to Liano, had with Fortune.
Sparbanken was then contacted by a person claiming to be Henrik L from Nordbanken, which confirmed that 295 000 000 SEK would be transferred from Nordbanken to Sparbanken. The next day Sparbanken fulfilled the directions given by Jacob K, thus paying one amount to Fortune’s account and a larger amount to Handelsbanken. Handelsbanken, however, got suspicious because of what they knew about the company to which the money was transferred. Handelsbanken then contacted Sparbanken. The personal at Sparbanken eventually realised that the transactions was a part of an attempted fraud and that the person Henrik L they had talked to was not a bank manager at Nordbanken at all. They then contacted Fortune and told them to “freeze” the money, not giving out the security put for the loan to Ross Sea Shipping, since “there was something not right with the payment”. The liquidator of Fortune (and later the administrator of the bankruptcy estate since Fortune was afterwards declared bankrupt) held the amount separated from the rest of the estate’s assets on a special account but the negotiations between the bank and the estate for the returning of the money were unsuccessful. Sparbanken thus sued the estate claiming that the estate should return the amount to the bank. The claim was based on several grounds: condictio indebiti, the so-called “res integra-rule” in The Act on Contracts, section 39 and the doctrine of tacit assumptions.
In the decision the Supreme Court made some general comments on the institute of condictio indebiti in multi-party relationships such as these. The principles of condictio indebiti was explained to primarily apply when someone pays an amount to someone in the false belief that he owes that person the amount or when a debtor pays a higher amount than the actual debt. The main rule in these cases is that the payer has a right to demand the amount back, but the balancing of different interests has led to several modifications to the rule, especially when the receiver in good faith has spent the money. In previous practice (for instance in NJA 1912 s 562) the principle had been that a right to demand a return of the money from the receiver did not apply when the payment was grounded on the mistaken belief that the debtor had made funds disposable for the payment. The payer would have a right to demand the money back from the debtor but not against the creditor. This practice could no longer, the Court stated, be said to be existing law in Sweden. What should be deciding for the obligation to return the money is if the circumstances in the case are such that they would constitute a right for demanding the money back in an ordinary condictio indebiti-situation (that is, between two parties).
The Supreme Court then discussed the basis for the rule of condictio indebiti (see below). The Court stated that one of the most important arguments usually referred to for allowing the payer a right to demand the payment back is that otherwise would there be a transfer of fortune or wealth without a legal ground; the receiver would be unjustly enriched. In situations such as in the present case, however, the receiver is generally not enriched in this sense, since he apparently then gets paid for a valid claim. In some cases may, however, the claim be uncertain and the creditor may even sometimes estimate that the claim is worthless, for instance when the debtor lacks the ability to pay. If in such a situation a third party pays the debt is the situation closer to traditional condictio indebiti-situations.
According to the previous the Supreme Court found, in the absence of any investigation of either Liano’s or Ross’ solvency, that there was no reason for applying the principle of the right to demand a return of the payment on this ground. The Court then examined another reason for allowing a right to demand the payment’s return, even if the receiver was in good faith. It has been said that a receiver supposedly has the same possibilities to oversee and evaluate the circumstances behind a payment. It has also been considered important if any of the parties acted negligently in connection with the payment (the Court refers here to the decision NJA 1994 s 177. In the present case Fortune was not in a position to be able to overview the circumstances behind the payment. Sparbanken, however, had such an overview of the situation and even thought they were the victim of fraud, the Court found that Sparbanken’s lack of effective control constituted at least slightly negligent behaviour. In the light of these considerations the Court found that Sparbanken did not have a right to reclaim the payment on the ground of condictio indebiti.
In the above decision the Supreme Court has explicitly referred to the idea of unjust enrichment as a ground for condictio indebiti. This thus constitutes a use of the unjust enrichment concept as was presented in the first category above. This raises the question if the concept of unjust enrichment has now made a comeback in Swedish law.
Fierce criticism of the decision NJA 1999 s 575 has come from Jan Hellner. The criticism concerns different aspects of the case. Hellner first concurs with the Supreme Court’s rejection of the older practice which excluded intermediaries from claiming compensation from the receiver on the grounds of condictio indebiti in situations such as these. But according to Hellner is the Supreme Court’s view of the enrichment-notion in the case debatable. Since Fortune got paid for a valid claim, the Court stated, was it not found that Fortune was enriched through the payment which thus excluded a right of recovery on the grounds of condictio indebiti. Hellner finds the argument peculiar; claims of recovery of mistaken payments such as these are typical examples of condictio indebiti. The receivers connections with third parties are generally not considered. What the Court seems to have done is to balance the advantage for Fortune to get the payment from Sparbanken, with Fortune’s loss of a claim against the debtor. This was how the Court found that Fortune were not enriched through the payment; Fortune had not made any profit. Hellner asks for the reasons for introducing such an enrichment concept as a requisite for a right of recovery of mistaken payments for which there is no explanation in the decision. Hellner asks who, then, was enriched through the payment, if not Fortune? The debtor Ross? Liano? Somebody else?
The Supreme Court further discussed the situation that a claim is uncertain because of doubts of the debtor’s ability to actually pay the debt, but found in the present case since no evidence had been presented concerning neither Liano’s nor Ross’ solvency, and thus that no right to reclaim the payment on this ground could be granted. Hellner stresses that from a practical point of view is it typically an enrichment for someone to get a payment for a claim against a person who is not indisputably solvent. That is also confirmed by the present dispute; if Fortune would have been indifferent whether to keep the payment or to rely on the claim, they would not have opposed Sparbanken’s demand so stubbornly. The Supreme Court’s definition of the concept of enrichment, Hellner concludes, is disputable both from a legal as well as a practical perspective.
The other ground that the Supreme Court refers to as a possible argument for allowing the payer a right of recovery of mistaken payments, is that generally the receiver has the same possibilities to overview the circumstances surrounding the payments. Another factor that should be taken into account is whether any of the parties acted negligently. This seems to indicate, Hellner says, that the Court still considers general rule to be that a payer have a right to recover mistaken payments. The Court found that Sparbanken had acted at least slightly negligent in the case and also that Fortune had small possibilities to overview the circumstances of the payment. Hellner argues that in the previous discussion concerning condictio indebiti in Swedish law, these two factors have been taken into account. But, according to Hellner, no one who has discussed these factors has advocated that they shall also apply in situations were a slightly negligent payer, who was a victim of fraud, mistakenly pays a substantial amount to the receiver. It is clear that a receiver in good faith who has adjusted to a payment may [under some circumstances] may keep the money without obligation to compensate the payer. But that can not be the case in the present situation, Hellner stresses.
Furthermore, Hellner gives an account on the position of condictio indebiti in Swedish law and the connection between this rule and unjust enrichment. The Supreme Court said that one of the most important arguments for condictio indebiti is that the receiver would otherwise be unjustly enriched. Hellner points out that the Court does not give any references for this opinion and the reason for this, Hellner says, is that there simply are not any references to be given from modern law. Instead, the rule for reclaiming mistaken payments is an independent rule in Swedish law, based on numerous court decisions from which the main rule clearly appears: “The rule does not need support from either the doctrine of unjust enrichment or the doctrine of tacit assumptions, the causa doctrine, “quasi-contract”, implied conditions in the payment or any other of the constructions that exist. Such motivation have been presented but generally been dismissed as unnecessary or misleading.” The Supreme Court’s use of the unjust enrichment motivation in this case goes further than usual, Hellner says. Rather it seems that the Supreme Court have used the German enrichment-rule (BGB § 812), which undoubtedly cover situations of condictio indebiti. It is thus this German rule that seemingly is “thrown into” Swedish law – first as a main argument for condictio indebiti, and secondly as a rule since a “transfer of fortune” is seen as a part of the legal rule. Hellner ends his analysis with arguing that the Supreme Court’s method in the case is a clear example of “begriffsjurisprudenz”; the Court should ask themselves if their argument “is compatible with common sense”.
I will in this part try to make an account of how some typical unjust enrichment situations are treated in Swedish law, since they do not find their solution within general rules on unjust enrichment. It is generally considered in Sweden that other rules than enrichment rules are to be used when possible, even though some of these rules may fall under the concept of unjust enrichment in other jurisdictions.
As has been said is the view of unjust enrichment in Swedish law to view it as a way of establishing the scope of compensation on the grounds of someone’s enrichment or profit, which deviates from some of the more common approaches in Swedish law. Other ways than the idea of enrichment are often preferred as methods for establishing which compensation should apply. I shall just mention two such approaches, with emphasis on what has been said to be the most important competitor to the enrichment rule, that is value-compensation (värderegeln).
One important competitor of allowing enrichment-based compensation is damages, in Swedish “skadestånd”. The calculation of damages takes as its basis the loss of a party and the amount is thus a means to compensate the full amount of the loss. The difference between damages and enrichment is that in the former case, compensation is based on the situation of (presumed) creditor (his loss) but in the latter case, the compensation is based on factors on the debtor’s side, his enrichment. I will not go further into the different aspects of the establishing of damages here, but will make one exception: the of compensatio lucri cum damno should be mentioned since it has a special connection with the law of enrichment.
It has been said that the principle of compensatio lucri cum damno (that benefits that have followed from an action that otherwise entitles someone to compensation for damages reduces the amount of compensation) is generally applicable in Swedish law. However, the principle has been a subject of exceptions which has lead to that the application in a concrete case may be uncertain. The Supreme Court stated for instance in NJA 1943 s 618 and NJA 1947 s 586 that gifts - in these decisions collections of money for the victims - does not reduce the amount of compensation. It has been argued that necessary limitations of the principle of compensatio lucri cum damno could be made with the doctrine of adequate causation but this has been dismissed by Rodhe.
The most important competitor to the enrichment rule within the law of obligations, but also the law of property, in Sweden is the so-called value-rule (“värderegeln). The value-rule is the preferred way of handling unauthorised displacement of fortune when it does not fall within tort law or penal law and is the main reason for the insignificant role of enrichment-principles in Sweden. What differs between the value-rule and enrichment-rules is that the former does not take as its ground the enrichment of a party but bases the compensation on the “objective” value of the property in question. In the establishing of this value shall the personal value for the person who lost the property, if that is the case, not be taken into account. When establishing the objective value of the property may different methods be used. The value of the property could either be based on the cost for replacement, the replacement value, the revenue value or the vending value. The different methods sometimes give the same result, but not always. Which method should be used in a specific case is dependant on the circumstances of the case, but the main rule is that the value is established on basis of the replacement value.
The replacement value is what it would cost to purchase a replacement for the lost property. However, the person entitled to compensation does not always have to accept compensation based on the cost for replacing it with second hand property, but have sometimes a right to a compensation which cover the cost of purchasing new property (for instance in situations of insurance, försäkringsavtalslagen, sect 37). When the cost for new property is to high, the decrease in value of the lost property is subtracted from the amount of compensation.
The revenue value is based on the owners’ expectations of future revenues from the property. In contract law is this method seldom used, but is of importance in the law of expropriation.
The vending value is based on an estimation of what price the property could have been sold for. This method is sometimes used when the creditor is in possession of property with the purpose of selling it. The value corresponds to the price the seller would receive from the compensation minus the costs for the selling.
A reason for acknowledging enrichment-based compensation is that such compensation is generally (but not always) more lenient on the obligated party, since the amount is restricted to the enrichment and not the full amount of the property. However, it has been argued that the difference in result between compensation based on the value-rule and the enrichment-rule in practice may be insignificant, since the courts may mitigate the amount of the compensation, when considered to harsh for the debtor. The legislator has laid down mitigation rules in several acts, the most important here being the general mitigation clause in the Tort Act, ch 6 sect 2. The courts have sometimes mitigated an obligation to compensate without explicit support in statutory law, basing their decisions on analogies and “general legal principles”.
A notion that has a close connection with unjust enrichment is condictio indebiti. The argument is that when someone has received a payment from someone under such conditions that are required for it to be qualified as condictio indebiti, he should be obliged to return the payment because he would otherwise be unjustly enriched. As was above said, has this use of unjust enrichment, to use it as a motivation in a specific situation, been criticised in Sweden. As was also said, Hellner has emphasised that the rule of condictio indebiti in Swedish law does not need support from any such ideas, but is an independent legal institute that, so to say, stands on its own legs. But from the previously presented case NJA 1999 s 575 it seems that the Supreme Court have once again found it necessary to find some “external” support for the rule. I will here give an account on the material content of the rule.
The focus in the Swedish discussion on condictio indebiti has been on situations where someone pays another in the mistaken belief that he owes the receiver the amount, rather than mistaken payments in general. A situation that is similar to this is when someone pays his creditor a higher amount than he actually owes. The main principle is that the payer is then entitled to reclaim the payment, but over the years has this principle been adjusted in regard of the balancing of different interests on both sides. Arguments for not letting the payer be entitled to reclaim the money has been that a receiver shall generally be able to rely on payments as being definitive, especially in cases such as when a bank customer receives money from the bank or when an employee gets to much money in salary. Another argument against allowing a right of recovery is to encourage payers to be careful. On the other hand, if the receiver was in bad faith when he received the payment is the exceptions to the general rule not applicable.
A typical situation when an exception to the rule is given is then when someone in good faith has used the money, for instance when an employee received too much money in his salary and thereafter consumed the money (NJA 1955 s 310 and NJA 1958 s 475). But this requires that the receiver actually was in good faith when he received the money, and also that he actually has adjusted after the payment. This “adjustment” is considered to take some time.
NJA 1970 s 539: A group of farmers in Blekinge had received too much money in compensation for damages of their crops, awarded by the state. Just after the payment was given, however, the authorities made publicly known that a mistake had been made in calculating the compensation. The Supreme Court found that since the farmers within a very short time after they received the money knew or should have realised that the state had mistakenly given them too much compensation, they should return the surplus to the state. It seems that the Court did not consider whether each farmer in fact had received information about the mistake, but only that they should have realised a mistake had been made. Under these conditions, the Court found, were there no reasons to make an exception to the main rule that repayment should be made.
Special considerations have also been taken in insurance relationships.
NJA 1935 s 492: A company that sold furs, Ahlgrens, had been victim of theft and received as a result thereof insurance benefit from their insurance company Freja. The value of the furs were estimated on basis of information from the insurance taker. The furs were later found and inspected. It was then established by Freja’s valuer that the value of the furs were approximately half of what Ahlgrens had stated. Freja claimed that Ahlgrens should be obliged to return the extra amount. The claim was dismissed, without actual motivation.
In relationships between multiple parties, as in NJA 1999 s 575 above, has also special concerns been taken. In one recent case, which the Supreme Court also referred to in their decision NJA 1999 s 575, the Court also gave an illuminating general account on which considerations should be taken in situations of condictio indebiti.
NJA 1994 s 177: The Swedish company RS had a claim against the German company Interlift with more than 100 000 SEK. On October 2nd 1986, RS received 50 000 SEK from Interlift, through Interlift’s bank Dresdner Bank. On October 6th 1986, RS received another 49 940 SEK from Swedish bank SE-bank. On the payment from SE-banken, Dresdner Bank was noted as assigner and Interlift as “remitter”. However, Dresdner had never given an order for SE-banken to pay the amount to RS. SE-banken had misunderstood a notice from Dresdner Bank, which was written in German, that they had paid an amount of 50 000 SEK to RS as an order for SE-banken to pay. SE-banken later demanded the money back from RS, arguing that RS had “gotten this money before”. RS refused to return the money. The Court established that RS had received the money in good faith (their claim against Interlift apparently encompassed the amount of both payments).
The Supreme Court considered if the rules of condictio indebiti was applicable in situations were the payer was not the debtor but an intermediary, since the typical cases of condictio indebiti is when someone pays in the mistaken belief that he himself owes the money. It was established that in ordinary condictio indebiti-situations someone has received money “without legal ground”[sic!], which is an argument for obliging the receiver to return the money. An argument for letting the receiver keep the money is that people should generally be able to rely on payments as being definite. Which of these two considerations should precede in a specific situation depend on many different circumstances that may differ from case to case. Among circumstances that are often of importance is which of the parties had the best ability to oversee the circumstances surrounding the payment and if any of the parties has been negligent.
In this case the Supreme Court found that the situation was not an ordinary condictio indebiti-situation, since RS received money they were actually entitled to. Interlift was credited with both payments. Also, the Court found that SE-banken had the best ability to oversee the circumstances of the payment in their capacity of a credit institute specialized in dealing with payments. The Court also stated that SE-banken had been negligent in their paying of the amount, that RS had been in good faith and that in such a situation the payer should not be entitled to recover the money.
It seems thus that in situations of mistaken payments, the Court will weigh the arguments on both sides, taking into account negligence and ability to get information about the payment, in establishing whether the payment should go back or not. To summarize: The main rule of condictio indebiti is still that the receiver is obliged to return the money to the payer. This rule has been subject of exceptions over the years, and in many situations may a receiver in good faith be able the money, although this is established on the balancing of the different circumstances and interests of the case.
In the latest book on unjust enrichment in the Swedish legal literature, Karlgren’s Obehörig vinst och värdeersättning, the author distinguishes between three different categories of enrichment-cases. Karlgren’s categorization correspond to some extent to the preliminary division in the Position Paper no 1 on Unjust Enrichment but not altogether. The first category deals with cases when someone (perhaps in good faith) has used another person’s property without having a right. For instance: A has taken an apple from B’s tree in the mistaken belief it was on his ground. In Swedish law these cases are of interest only if restitution in natura is not possible, nor a claim for a substitute of the property. Restitution in natura or substitute is not considered as falling under the notion of enrichment in Nordic law. These claims are instead considered to fall under the rights of recovery or rei vindicatio (the Swedish legal term for these claims is “vindikation”). The second category includes cases where a contract has been declared void or invalid. When a contract for some reason is not fulfilled the general rule is that the parties should return what they received under the contract. But when such restitution is not possible, for instance if one of the parties has consumed what he received, other ways of compensation are sought. This second category then deals with contractually based claims. A third category includes cases when someone without contract improves another’s property and directs a claim against the other on the ground of the other party’s unjust enrichment.
Besides these three categories, unjust enrichment has seldom been considered in the legal discussion or by the courts in Sweden. It is hopefully clear from the previous examination that Swedish law is reluctant to accept enrichment-claims in these cases also, without support in statutory law. I will here give some account of how Swedish law deals with these cases. However, to give a thorough account of these three categories is not possible in this format. The last category will be left altogether since the situations in these category to a substantial degree was dealt with in the previous paper on negotiorum gestio. It may seem somewhat peculiar to refer all situations in group three to the negotiorum gestio-cases, but this is primarily attributed to the fact that Sweden do not have clearly demarcated areas of enrichment-law and negotiorum gestio-law, which for instance lead Håstad to cover situations in his thesis on negotiorum gestio which would in some continental jurisdictions fall outside that concept. I will also to a large degree leave out the second category which in Sweden would sometimes fall under contract law or real property law, mostly due to the fact that a general presentation of all cases may not be given in this format but also that some of these cases will be dealt with in a later paper on transfer of title and void contracts. I will make an exception for the practically important rules in the Sales of Goods Act. The perhaps most important category, situation 1, will be presented more extensively, where I will also give some outlines of the Swedish law of Property.
When someone has used another person’s property without a right, the previous owner generally has a right to recover the property according to what in Swedish is called “vindikationsrätt”. Rules of vindikation is considered to mainly cover situations of non-contractual claims, but not exclusively. When recovery in natura is based on rules of vindikation, this is in the Swedish discussion considered to fall outside the scope of unjust enrichment law. When a claim is based on vindikation is thus a claim for compensation for unjust enrichment excluded.
A possessor in good faith may however in some situations acquire ownership of the property which then “extinguishes” the ownership of the previous owner. It is said to be a characteristic of Swedish law to recognize good faith acquirements of ownership to a large extent, especially in cases of moveable property. But also in cases of real property may a possessor acquire ownership which extinguishes the former owner’s. To obtain ownership it is not enough that the new owner was in good faith, it also requires a formally correct legal title and not any title will do. For instance it is not possible to extinguish a former ownership through so-called “universalfång”, that is, acquisitions of title through inheritance and other ways. Furthermore are some objects excluded from the general principles of good faith acquisitions, as claims which have not been manifested in for instance a bill of exchange or similar.
As for movables, extinguishing is for instance possible when someone in good faith purchased a tangible (corporeal) chattel even though the seller did not have a correct title to the property, which is regulated in The Purchase of Movables Act (lösöreköpslagen). Nevertheless is the previous owner entitled to recover the property from the new owner if he pays “ransom” for it. Such a recovery requires that the previous owner claims it back within three months from receiving information about the property being in the hands of the new owner (lösöreköpslagen section 4). The rules on recovery against ransom has been considered similar to allowing claims on unjust enrichment since they also are a compromise between the owner (or first owner) of the property and a bona fide enriched party.
It was previously not clear how to establish the amount the previous owner needed to pay for the recovery of the property: Should the amount correspond to the value of the property or the price which the second owner paid for the property. It is now stated in section 5, lösöreköpslagen, that the amount should compensate the new owner for what he paid for the property and also expenses he has had for improving it. These rules apply only when the new owner of the property purchased the property from an unauthorised possessor. If the unauthorised possessor instead of selling the property gave it away is the new possessor not entitled to compensation for the property, but if the property was given away by someone who would himself have been entitled to compensation if the previous owner claim it back will also the last possessor be entitled to such compensation.
Some examples may illustrate the above:
1)B steals A’s car and sells it to C, who was in good faith. C repaints the car and installs a new alarm, since a lot of cars are stolen nowadays. A may recover the car from C if he compensate C for the prize C paid for the car as well as C’s cost for improvements of the car (the alarm).
2) B steals A’s car and gives it to C, who was in good faith. C is obliged to give it back to A without being entitled to compensation, even though he was in good faith.
3) B steals A’s car and sells it to C, who was in good faith, who later gives the car to D. A may recover the car from D if he compensate D for the prize C paid for the car as well as C’s or D’s costs for improvements of the car.
[4) It should also be noted the situation where B steals A’s car and sells it to C, who was not in good faith. C must then return the car to A without being entitled to compensation from A.
5) Related to 4. If B steals A’s car and sells it to an unknown buyer C, B is obliged to give the amount received to A. See further below.]
These situations all presupposes that the property in question was still intact and could be restored to the rightful owner. Another situation is when the property no longer can be restored. Say that the car in our previous examples was destroyed or sold to an unknown buyer. The owner has then, in some cases, a right to surrogate of the property, where such a surrogate exists. The right to surrogate property is not either considered to have anything to do with unjust enrichment in Sweden. To what extent surrogation is generally accepted in Swedish law is a too wide of a subject to go into here, and has been a matter of debate. I will continue this discussion in a following paper.
Say, however, that the property in question was returned to the rightful owner but the owner did not have a possibility to use the property under some time when it was another person’s possession. Should he then have a right of compensation and then with which amount. Of special interest is those cases where the owner did not himself intent to use the property at the time it was out of his possession. Say B takes A’s bike in good faith, uses it for one day and puts it back in the same condition. Does A have a right to compensation for the enrichment of B when B used the bike or is his right restricted to possible damages of the bike? Or if B in bought a farm property which he later had to give back to the rightful owner A, does A have a right to compensation for the revenues of the property under the time it was in B’s possession? These problems will be dealt with below, first concerning real property and later moveable property.
Firstly, what applies in those situations where a second owner, a possessor, has a formally correct title to the property but where this is in violation of a first owners right? According to jordabalken (the Real Property Code - hereafter JB for short) ch 5 sect 1, a rightful owner to land, which he recovers from an unauthorised possessor who was not in good faith, has a right to compensation for revenues the possessor has had from the property. If B was in possession of A’s real estate and leased a house on the property to a tenant C, A have a right to compensation for the revenues B got under the lease contract with C. If B does not lease the house to C but lives there himself, A nevertheless has a right to compensation with the amount B reasonably could have received if he had let the house. In the establishing of such a right it is generally not considered whether A intended to use the property himself under the time in question. These are then not considered to be rules on unjust enrichment since the obligations for the unlawful possessor is not restricted to his enrichment.
An older decision from the Supreme Court supports this view, and even extended it to situations where the possessor was in good faith. In NJA 1896 s 7, the Supreme Court considered a case where a person in good faith had used another person’s land to, inter alia, store timber. The Supreme Court stated that the owner was entitled to reasonable compensation. The Supreme Court hereby changed the decision from hovrätten (the court of second instance), which had dismissed the plaintiff’s claim on since he had not been caused any loss nor damage from the use of the property.
If on the other hand the second owner of the property was in good faith, and if he for instance had bought the property from someone who in his turn had a formally correct legal title to the property, other rules apply. Earlier it was held that the first owner would have a right to compensation regardless of the good faith of the second owner (NJA 1921 s 382 and NJA 1939 s 70). But this has now changed. It seems that in this case, the second owner may keep the revenues from the property and the rightful first owner is not entitled to compensation for that or any other benefit the new owner has had from the property. This was recently made clear when the Supreme Court in NJA 1996 s 261 established that good faith exempted the second owner from obligation to compensate the first owner for revenues from the property.
These are two different situations in which the possible enrichment of the second possessor may come into discussion. But the question of enrichment may also arise on, so to say, the other side. Say that the new owner has had expenses for the property, for instance if he has made repairing on a house on the property. May the first owner then just get his property back without being obliged to compensate the second owner for his expenses?
Firstly, it is clear that if the second owner was in bad faith concerning the first owners claim on the property the second owner is still entitled to reduction of the amount of compensation for costs he has had for the obtaining of the revenues as well as expenses he had for maintenance of the property (JB ch 5 sect 1). However, the first owner must not compensate the second owner to a higher degree than he himself has a claim against the second owner for that person’s benefit from the property. In other words: The second owner has only right to get compensation for his expenses to the extent that they can be deducted from the amount he is obliged to give to the first owner.
There are however supplementing rules concerning necessary expenses on the property in JB ch 5 sect 3. According to this has a second owner right to compensation for necessary expenses on the property. This applies for a second owner in good as well as in bad faith and is considered to be an enrichment-rule. The argument is then that the first owner benefits from the costs the second owner has had, since he otherwise would have had to pay them himself. What is to be defined as a “necessary” cost must of course be established from the circumstances of the case but in the preparatory work from 1909 is necessary costs defined as costs that were needed for the property being able to used in the same way also in the future.
Another question is whether the second owner also has a right to compensation for useful costs he has had on the property. Say the water pipes were changed on a house on the property although this was not acutely necessary, is he then entitled to compensation for these costs? It is held that only a possessor in good faith are entitled to such compensation. According to JB ch 5 sect 3 in fine is he entitled to compensation only to the extent that his expenses has increased the value of the property.
A last problem that may arise is when the value of the property for some reason has gone down when it was in the second owners possession, for instance as a result from an accident but also as a result from actions of the new owner. According to a generally formulated rule in JB, ch 5 sect 2, shall the second owner compensate the first for decrease in value to the property due to the property being damaged or other factors that has lead to a decrease in the property’s value, to the extent that this is attributed to the second owner and only to the extent that it is equitable in reference to the second owners actions and other circumstances. This rule is thus a value rule, as was above presented. The way the rule is formulated it seems that the starting point is against obliging the second owner to compensate for a decrease of the property’s value. According to Karlgren is this to be seen as an unfortunate formulation which does not reflect the intentions of the legislator. The main rule is still that compensation shall be paid. Karlgren has also stated that enrichment considerations may be taken in these cases although they formally must be referred to the assessment of what is equitable.
What applies then for moveable property, if again is presupposed that the possessor has a formally correct title to the property? Hellner has argued that the same should apply for moveable property as for real property, when the rightful owner on grounds of vindikation recovers the property. A general rule would thus be that the owner of property has a right to compensation when someone in bad faith has used the property. The compensation would according to this rule be calculated to a reasonable price for the use, without regarding whether the owner would have used the property himself under the time period. This rule is also applicable in situations where the possessor is not held responsible under criminal law.
Generally must one then consider if the possessor should have a right to reduce the amount he is obliged to give out when the revenues that floated in was especially high due to the possessor’s actions. For instance: B is without a right thereto in possession of A’s apartment. The normal price one could receive when subletting such a apartment is estimated to 1000 SEK but B managed to persuade C to pay 2000 SEK, due to his outstanding negotiating skills. Is B then required to give A 1000 SEK or 2000 SEK? The general rule is that B is only obliged to give A “reasonable” compensation, but the starting point of establishing the compensation is the revenues actually received. If the possessor wants the amount to be reduced, the burden of proof lies on him.
What have been said up to now only deals with the question if the possessor is obliged to compensate for revenues he might have had from the property. But there are many other interlinked questions. For instance the obligation for the possessor to pay for damages to the property or compensation to the owner if the property is lost. It seems to be clear that if the property is lost or destroyed, the (former) possessor is obliged to compensate the owner for the value of the property.
A special case where the property may be lost for the owner is when the possessor has acquired ownership through “specifikation”. In these cases it is said that the first owner of the property shall be entitled to compensation for the value of the property. This applies for property for which the possessor has a formally correct title to support his claim of ownership. But there are many situations in which the acquisition does not give the possessor a valid claim of ownership, for instance if he inherited the property or when the criteria for a good faith acquisition was not fulfilled. There is one rule that has been referred to in this regard which gives possibilities of analogies, namely a rule in the book of successions.
Under some (rather restrictedly defined) circumstances may a person be declared deceased when he is absent and presumed deceased according to ärvdabalken (the Book on Successions – hereafter ÄB) ch 25. If such a declaration was later found incorrect shall the successors return any property they inherited from the “resurrected” person, according to ÄB ch 25 sect 7. The “resurrected” person also has a right to compensation for revenues the inheritors may have had from the property, for instance interest. If the possessor of the property has had expenses for the property is this deductible from the amount. This is the case both for necessary as well as useful costs.
It has been said that the rules concerning the effects of a presumed dead person’s return is a general principle for situations where a rightful owner demands his property back and where the possessor had a formally correct legal title do the property.
Lastly: What if the possessor could not support his claim with a formally correct title. A requirement for an extinguishing of the former ownership was earlier said to be an acquisition in good faith and a formally correct title. In the absence of such a title the possessor is not able to gain ownership over the property. It seems that in the case of real property, the possessor in these cases is obliged to compensate the owner for the value of both possible revenues as well as damages to the property. Here is then a difference between the former situation where the possessor had a correct title. Also a possessor in good faith is thus treated quite severely, in the absence of a title. As for moveable property the same applies; the possessor has an obligation to compensate the owner in accordance with the value rule.
Another reason why unjust enrichment ideas may have an even lesser importance in today’s Swedish law is that some of the situations which would for instance in Germany be dealt with as typical examples of unjust enrichment would in Sweden fall under the scope of tort law, even though it is debatable from a dogmatic perspective whether they actually belong in this category. In the present section is this obvious for one important type of cases, that is, cases where someone has used another’s property without having a legal right thereto. If the person was in good faith what was said above applies.
What of those cases where the person was in bad faith, then. Could these cases be solved within the law of torts? It must here be pointed out two requirements of Swedish law for a right to compensation within tort law, which are here of interest: Firstly, so-called pure economic loss (defined as a loss without connection to previous personal injury or damage to property) is, according to the main rule, only compensated if it is caused through a criminal act. Secondly, which may sound like of a truism than it actually is, for a right to compensation for pure economic loss is required that the plaintiff actually had a loss. This is of special interest for the present category where someone has used another’s property: What if the owner did not intend to use the property himself or did not have a loss resulting from the usage. Also, what if the criteria for criminal responsibility are not fulfilled? It seems that the tendency in contemporary Swedish law is to deal with some of these cases within tort law, and to entitle the owner of the property to reasonable compensation for the usage, regardless of whether the owner would have used the property himself. These cases are close to unjust enrichment law.
See NJA 1993 s 13: B rented premises from A, and sub-let it to C. The contract between A and B was ended but C did not leave the premises. A demanded compensation for C’s stay in the premises. The Supreme Court found that C was not criminally responsible but found that A nevertheless was entitled to reasonable damages.
A situation where enrichment-compensation may occur in other jurisdictions is when a contract is void and where one of the parties is not able to return the performance, because the property has been consumed or destroyed or for some other reason. I will briefly present what the remedies for dealing with the here presented typical situation are in some different relationships in Swedish law, where the most important are the cases falling under the law of the sales of goods. As has earlier been mentioned is the most important competitor of the enrichment-based compensation claims in Swedish law the so-called “värdeersättning”, value-compensation. In the law of obligations is other ways of establishing compensation also used. An important type of compensation is “skadestånd”, damages, which can be awarded both in contractual and non-contractual situations. Other compensation may be compensation for costs, compensation for revenues and also in the form of penalty interest. It is often not altogether clear from court decisions what kind of compensation that has actually been awarded in a decision. The reason for this vagueness is that the different methods of calculating the compensation often leads to the same results, which means that the courts may not deem it necessary to explicitly declare which method was used. In practice is probably “skadestånd” used for compensation that from a dogmatic point should rather be labelled as some other kind of compensation. This leads also to ambiguities in discussing enrichment-compensation, since court decisions were compensation has been awarded to some party sometimes could be conferred to the enrichment-category, even if it is not clear whether the court in fact used an enrichment method for it’s decision. Rodhe has stated that enrichment compensation has an insignificant importance within the law of obligations.
A contract concerning sales of goods can be void, invalid or cancelled on several reasons, either according to general contractual rules or due to specific rules for the law of sales. In all these situations may questions concerning compensation arise. One important case where a party on contractual grounds in some cases may be entitled to compensation is when a contract has been cancelled. According to the Sales of Goods Act, section 64, is the consequence of cancellation of a sales contract that the buyer does not have to pay for the goods and the seller does not have deliver the goods to the buyer. If the performances has already taken place shall they go back. If the buyer can not return the goods he received under the contract in the same condition, he is not entitled to cancel the contract even though the conditions for cancellation were otherwise fulfilled (sect 66). Under some conditions remains the right to cancel the contract even though the buyer can not return the goods, sect 66, sub-sect 2-3. Amongst these conditions is when the property was destroyed due to the property itself or other factors not caused by the buyer. Similar rules apply in consumer relationships according to konsumentköplagen (The Act on Consumer Sales). If the buyer compensate the seller for the decrease in value, he may cancel the contract even though he could not return the property in the same condition. When the right to cancel the contract may no longer be exercised other remedies for the buyer may be used. For instance the buyer has a right to damages and price reduction.
These are just some outlines of one important part of Swedish contract law, sales of goods. In the following paper, these questions will be dealt with more thoroughly.
The cases in this category often fall under the concept of negotiorum gestio, which was presented in another paper. Also, some of these cases would fall under the scope of handelsbalken ch 18 sect 3. In other jurisdictions unjust enrichment may sometimes be used when the criteria for a successful negotiorum gestio action are not fulfilled. The approach taken in my paper on negotiorum gestio did not follow along these lines but took a wider perspective on negotiorum gestio, as a result of the ambiguous status of the concept in Swedish law. I think therefore that a wide range of cases that would fall under this third category of unjust enrichment was already dealt with in that paper.
I have in this paper tried to give an account on how the concept of unjust enrichment is and have been treated in the Swedish legal discussion. I will not repeat what has earlier been said but will make some final general remarks. It has been emphasized that the two major works from the modern Swedish doctrine are Hellner’s thesis and Karlgren’s book. These two books constitute most of what has been written on the subject during the last 50 years in Sweden. Since there are no general statutory provisions on unjust enrichment are these works especially important. It should however be pointed out that Hellner’s book is by now 50 years old and a lot of the examples Hellner takes from statutory law are no longer relevant. This is also the reason why Karlgren’s book has had an even greater importance for this presentation.
It seems that the sceptical attitude towards enrichment notions has increased since Hellner’s book, even in spite of the arguments from the Supreme Court in the presented case from last year. Many rules presented by Hellner as compensation rules with enrichment elements, for instance in intellectual property law, have now been changed with rules without such an element and have therefore been excluded in this paper. In most general accounts , for instance of contract law or property law, unjust enrichment is today not dealt with at all or given very brief comments (often with a reference to Hellner’s book). Also, actions claiming compensation on the grounds of unjust enrichment without support in statutory legal rules have been unsuccessful after the special timber cases from the 1920:s.
The reasons for this scepticism are several. An important factor is probably the criticism based on the conceptual analysis of the principle by Hellner and others. The general pragmatic attitude of Swedish law may be another. Hellner has said that an important reason for using the concept in other jurisdictions has been to overcome difficulties caused by the conceptual system of the law. In German law has the enrichment concept for instance been used to establish a duty to compensate in cases of void contracts and it is then seen as a lenient form of compensation for the obliged party. Swedish law, on the other hand, are flooded with general mitigation and adjustment rules which may be used to come to the same results. Besides the rules that allow the courts to lower an amount of damages and similar also apply general rules for modification of contracts that for some reason are deemed unjust (especially in an infamous section in the Contracts Act, section 36). Such provisions also lessen the need for an enrichment rule. And there may be several other factors behind the Swedish attitude, besides these.
If I shall try to summarize these tendencies it would have to be that Swedish law does not recognize any general legal rules on unjust enrichment and that Swedish legal scholars have been very critical towards the idea of using enrichment arguments as a motivation for other specific legal rules or results. The Swedish approach has lately been to analyse the enrichment concept from it’s possible influence over specific statutory rules. Also, in addition to the said scepticism it seems that the legislator has become more reluctant to let enrichment notions enter into new statutory rules than previously.
The conclusion is thus that the concept of unjust enrichment has very limited importance in contemporary Swedish law and that even this importance seems to be in decline. Håstad puts it clearly, which can serve as the last comment on the subject: “[…]the main rule in Swedish law must be that an enrichment someone has made on someone else’s expense may be kept”.
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NJA 1892 s 411
NJA 1896 s 7
NJA 1912 s 562
NJA 1913 s 397
NJA 1914 s 290
NJA 1921 s 241
NJA 1921 s 382
NJA 1923 s 534
NJA 1924 s 372
NJA 1924 A nr 29
NJA 1925 s 184
NJA 1925 s 497
NJA 1926 s 129
NJA 1927 A nr 65
NJA 1928 A nr 133
NJA 1931 s 642
NJA 1933 s 25
NJA 1939 s 70
NJA 1943 s 618
NJA 1947 s 586
NJA 1948 s 673
NJA 1955 s 310
NJA 1957 s 156
NJA 1958 s 475
NJA 1961 s 18
NJA 1962 s 481
NJA 1970 s 539
NJA 1987 s 468
NJA 1990 s 705
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Håstad, Torgny Tjänster utan uppdrag, Norstedts, Stockholm 1973 [Håstad]
- Sakrätt avseende lös egendom, 6 ed, Norstedts, Stockholm 2000 [Sakrätt]
Karlgren, Hjalmar Obehörig vinst och värdeersättning, Norstedts, Stockholm 1982 [Karlgren]
- Kvittning och condictio indebiti, in: Svensk Juristtidning 1940
- Skadeståndsrätt, 5 ed, Norstedts, Stockholm 1972 [Skadeståndsrätt]
- “Utan det vises, det honom till nytta använt är” in: Minnesskrift tillägnad 1734 års lag II, Stockholm 1934. [Minnesskrift 1734]
Kihlman, Jon ”Förutsättningsläran – obligationsrättsliga och sakrättsliga aspekter” in: Rättsvetenskapliga studier tillägnade minnet av Knut Rodhe, MercurIUS, Stockholm 1999. [Kihlman]
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 Tiberg p 21.
 Håstad p 36.
 Tiberg p 21.
 Hellner, p 4.
 Lejman p 642.
 Hellner p 294.
 Hellner p 396.
 Hellner p 139.
 Hellner p 143, my translation.
 Lundstedt p 168-170, n 2.
 See inter alia Schultz.
 Hellner p 144.
 Hellner p 49.
 Bergström p 249.
 Hellner p 187.
 Bergström p 256.
 Hellner p 202.
 Karlgren p 31.
 Karlgren p 32.
 Hellner p 148-187.
 Karlgren p 34.
 Karlgren p 35.
 Hellner p 164.
 Karlgren p 36.
 Karlgren p 41.
 Lag (1960:729) om upphovsrätt till konstnärliga och litterära verk.
 Levin/Koktvedgaard p 390.
 Hellner p 174-186.
 Hellner p 182.
 Hellner p 184.
 Bergström p 253.
 Bergström p 254.
 Bergström p 255.
 Rodhe p 551, Karlgren passim.
 This provision was the subject of Karlgrens examination in “Utan det vises, att det honom till nytta använt är”.
 Tiberg Mellanmansrätt p 14.
 Tiberg Mellanmansrätt p 54.
 Hellner p 329, Karlgren Minnesskrift 1734, p 647.
 Karlgren p 75.
 Tiberg Mellanmansrätt p 54.
 Hellner p 325-326.
 Hellner p 330.
 Karlgren Minnesskrift 1734, p 636 with references.
 Hellner p 331 in fine.
 Comparisons may be made to NJA 1942 s 251.
 Hellner p 344.
 Christensen p 760.
 Comparisons may be made with a recent decision, RH 1998:56, concerning additional unsolicited services.
 Håstad made a special exposé of the practically important subject of additional car reparations in his thesis, Håstad p 88-100.
 Håstad p 245.
 See Hellner Speciell II, p 88-89.
 See Tiberg p 21.
 See for the following Karlgren, p 65-66.
 See NJA 1962 s 481.
 Herre/Karnell, pp 44, 46-47, 100-103. Two Supreme Court decisions are here of interest: NJA 1957 s 156 and NJA 1987 s 468.
 Växellag 1932:130.
 Checklag 1932:131.
 Herre/Karnell p 101. See generally Agell Växel and Agell Vinst.
 Tiberg Skuldebrev, p 117 an d 133.
 See Karlgren p 77.
 See for the following Hellner p 399-413. Generally about the right to take and cut timber, see Bengtsson/Victorin, 18.1.
 See Bergström p 251.
 ”Rdr” is short for the former currency in Sweden, riksdaler.
 NJA 1921 s 241, NJA 1923 s 534 and NJA 1924 A nr 29. See also the decision NJA 1924 s 372 where the Supreme Court from the wording seems to have dealt with these questions under the “doctrine of tacit assumptions of the contract”, in Swedish förutsättningsläran. This approach was followed in NJA 1927 A nr 65.
See Wiberg p 789. ”Förutsättningsläran” has been given a thorough analysis in Lerhberg. See also recently Kihlman.
 Comparisons may be made with the similar cases NJA 1924 s 372, NJA 1925 s 497 and NJA 1931 s 642.
 Hellner p 405.
 See the decisions NJA 1926 s 129 and NJA 1928 A nr 133.
 Hellner p 410-411.
 Hellner p 412.
 This resulted in a criminal trial, in which “Henrik L” was convicted for gross fraud. Jacob L was acquitted in the trial.
 But also other interests is to be taken into account, for instance if the payer was negligent. See NJA 1994 s 177 and below.
 Comparisons may also be made with the decision NJA 1999 s 793, where the plaintiff unsuccessfully made a claim on the grounds of unjust enrichment.
 Hellner Betalning av misstag, p 409-415.
 Hellner Betalning av misstag, p 411.
 Hellner Betalning av misstag, p 413. Hellner refers here to an article by Phillips Hult, ”Condictio indebiti”.
 Karlgren p 47.
 Hellner Skadeståndsrätt p 371, Karlgren Skadeståndsrätt p 206 and Rodhe p 476. See generally also Ljungman.
 See the statement of Chief Justice Nilsson in NJA 1990 s 705, p 713.
 See Karlgren Skadeståndsrätt p 207.
 Rodhe p 476.
 Karlgren p 55-59, see also Knut Rodhe Obligationsrätt, § 49.
 Rodhe p 551.
 This is explicitly stated for insurance benefit in försäkringsavtalslagen (The Act on Insurance Contracts), sect 57.
 Rodhe p 556.
 Rodhe p 556.
 Karlgren p 25.
 Rodhe p 711-717.
 Malmström/Agell, p 193, Karlgren Kvittning p 341.
 This approach of taking different interests into regard was clearly formulated in a memorandum by Chief Justice Alexanderson in the Supreme Court decision NJA 1933 s 25.
 See NJA 1961 s 18.
 Tiberg p 23.
 Tiberg p 23. The contrary attitude was held in earlier decisions from the Supreme Court, see for instance NJA 1942 s 101.
 Tiberg p 23.
 Comparisons may be made Alexanderson’s memo NJA 1933 s 25, p 30.
 Karlgren p 47.
 Karlgren p 16.
 See generally Hellner p 252-281.
 See Rohde, Sakrätt, passim; Håstad Sakrätt, passim and Hessler, Sakrätt, passim.
 Karlgren p 47.
 Karlgren p 47.
 Karlgren p 100.
 Jordabalken (The Real Property Code) ch 16.
 Lag (1986:766) om godtrosförvärv av lösöre
 Hellner p 180.
 Håstad Sakrätt, p 71.
 Håstad Sakrätt p 71-72.
 Hellner p 241.
 Karlgren p 48. Walin on the other hand has argued for a principle of surrogation on the ground that such a principle would prevent that someone’s creditors could otherwise be unjustly enriched. The situation Walin has in mind is probably that when someone has a claim against some specific property in the possession of a debtor, he should also have a right of repossesion of substitution for that property in a bankruptcy. See Walin Separationsrätt, p 163.
 Hessler p 41.
 To give a thorough definition of the Swedish distinction between real property and moveable property falls outside this paper, but will be further dealt with in the following paper. The basic distinction is, however, that real property, “fast egendom”, is land and land units, and some property belonging to the land, see the Real Property Code, ch 1, sect 1 and ch 2. “Moveable property” is here used as a translation of the Swedish expression “lös egendom”, which not only cover things but also, for instance, immaterial property such as trademarks. Basically one can negatively define “lös egendom” as such property that is not real property. See generally Rodhe Sakrätt, p 4-11.
 Karlgren p 101.
 Hellner p 232.
 Karlgren p 102.
 Karlgren p 102.
 See Karlgren p 102.
 Karlgren p 103.
 Karlgren p 107.
 Karlgren p 108.
 Hellner p 233.
 Hellner p 234.
 Generally does obligation to compensate a party as a result of tortuous liability for so-called pure economic loss only follow from criminal actions, according to the Swedish Act on Torts, ch 6 sect 2. See also generally on pure economic loss in Swedish law, from a comparative background, Kleineman.
 Hellner p 240.
 Karlgren p 109.
 Agell/Malmström p 85.
 See for instance Handelsbalken (the Book on Commerce) ch 11 sect 4 and ch 12 sect 4.
 Hellner p 265.
 Karlgren p 111.
 See NJA 1948 s 673, Hellner p 268 n 2 and Karlgren p 113.
 Hellner Skadeståndsrätt p 424.
 Rodhe p 466.
 When Swedish lawyers speak of “skadeståndsrätt” this is usually taken to mean “tort law”.
 Rodhe p 467.
 Rodhe p 466.
 Köplag (1990:931).
 Konsumentköplag (1990:932).
 Negotiorum gestio was thoroughly covered in Håstad.
 Hellner p 393.
 This section was recently examined by Claes-Robert von Post in his thesis.
 Håstad p 36.