Legal Definitions - action for money paid

An "action for money paid" is a legal claim initiated by a party (the plaintiff) to recover money they previously paid to another party (the defendant). This type of claim typically arises when the payment was made due to a factual error, under some form of compulsion or undue influence, or in circumstances where the recipient has been unjustly enriched and has no legal right to retain the funds. It is a way for the payer to seek restitution for funds they believe were improperly transferred.

• Example 1: Mistaken Payment

  Imagine Sarah accidentally transfers $500 to her old landlord, Mark, instead of her current landlord, Lisa, when paying her monthly rent. Mark has no legitimate claim to this money.

  Explanation: Sarah can initiate an "action for money paid" to recover the $500 from Mark. The payment was made under a clear mistake of fact, and Mark has no legal entitlement to keep funds that were not intended for him and for which he provided no service or goods.

• Example 2: Payment Under Duress or Compulsion

  Consider a small business owner, Alex, who is forced by a local official to pay an unofficial "expediting fee" of $1,000 to process a necessary permit, even though no such fee is legally required. The official implies the permit will be delayed indefinitely if Alex doesn't pay.

  Explanation: Alex can bring an "action for money paid" against the official (or the relevant government entity if the official was acting under color of authority) to recover the $1,000. The payment was made under duress, not voluntarily, and for a service that should have been provided without that additional, illegal charge.

• Example 3: Unjust Enrichment (without a direct contract for the specific payment)

  Suppose a bank mistakenly deposits $2,000 into John's checking account, intending it for another customer with a similar name. John notices the extra money but decides to spend it, knowing it wasn't his.

  Explanation: The bank can file an "action for money paid" against John to recover the $2,000. John received money he was not entitled to, and keeping it would constitute unjust enrichment at the bank's expense. The bank seeks restitution for the funds improperly transferred to John's account.