Justifying the Law of Unjust Enrichment: A Confucian Perspective

Abstract

A historical review reveals that the notion of unjust enrichment has been persistently reserved in China after its transplantation through different historical periods due to its conformity with China's most influential philosophical tradition: [...]this article proposes a rational explanation for unjust enrichment liabilities through a Confucian lens. Without understanding the justificatory ideas and why it is adopted by the Chinese legal system, this area of law is built on a shaky foundation. [...]this article seeks to identify the justification for the Chinese law of unjust enrichment and establish a Confucian account of the doctrine based on China's particular historical, legal, and social contexts. "16 In fact, Confucianists called all rules that regulated social relations, curbed human desires, and upheld moral habits by the generic name of li}1 Li thus referred to a set of moral rules governing individuals' proper conduct and behavior according to their status in society and families.18 Confucianism was pessimistic of law and punishment as the governing tooi because the philosophy's goal was not merely to create a society where individuals refrained from misconduct to avoid legal punishments.19 Instead, Confucianists emphasized the educational function of // to encourage individuals to actively seek good.20 Li served as guidelines for proper social behaviors, regulating civil activities and conduct, and imposing obligations among citizens according to their status in society and family.21 Li is persuasive and preventive, which can be understood as rules enforced by society rather than by the government.22 To a Confucianist, the governance of a state should be achieved through // and its moral teaching to maintain an ideal social order, which influenced members of the society in a broad and permanent way, while fa and punishment had only short-term effects.23 Since the Han Dynasty (206 BCE-220 CE), Confucianism was adopted as the State orthodoxy and the miers elevated // above fa and fused the two.24 Han Confucianists sought to combine // and^a to govern society. The Confucian rule of reason demands that law should reflect ethical values in // that one needs to follow to act in a proper marmer.25 Moral principles laid down in Confucianism were accepted not only as a code of conduct but also as a frequently used basis for adjudicative decisions.26 The legal codes promulgated in the Chinese dynasties created no citizens' rights but were concerned about crimes and punishment, used by the rulers as a tooi of governance to safeguard the hierarchical social orders and the state's interests,27 while matters of a civil nature are basically regulated by Z/.28 The notions of civil law, including the unjust enrichment concept, were totally absent from those legal codes.

Headnote

Abstract: In a wide range of situations, the law in different jurisdictions requires that a person who has been unjustly enriched at another's expense make restitution to the other. However, what justifies the liability for unjust enrichment? This fundamental question has perplexed unjust enrichment scholars, especially in the common law world, for decades, with various justificatory ideas being proposed while no consensus has been reached. This article explores the justification of the law of unjust enrichment within the context of China's historical, legal, and social frameworks for the first time. A historical review reveals that the notion of unjust enrichment has been persistently reserved in China after its transplantation through different historical periods due to its conformity with China's most influential philosophical tradition: Confucianism. Therefore, this article proposes a rational explanation for unjust enrichment liabilities through a Confucian lens. This innovative Confucian account complements existing Western theories of unjust enrichment.

I. INTRODUCTION

Scholars regard the law of unjust enrichment as "something of a lost child in every system."1 In general, this area of law requires a defendant who has been enriched at a claimant's expense to return the benefit if the receipt of enrichment is without a legal basis or with an unjust factor.2 This area of law is considered to have "a mission of fixing what would otherwise be unjust."3 The defendant's duty to return seems intuitively obvious, as he received what he was not meant to receive, lacking a legal basis or for which he gave nothing in return. However, at the heart of the law of unjust enrichment lies a mystery that has perplexed scholars for decades: what makes an enrichment unjust? In other words, what is the justifwation for imposing unjust enrichment liabilities? Unjust enrichment theorists have proposed various justifïcatory ideas, especially in common law scholarship, such as corrective justifïcation,4 instrumental justification,5 and proprietary justifïcation.6 Although some of the justifïcations seem plausible, each of these theories has been seriously criticized by other scholars for failing to provide a rational explanation. No consensus has been reached regarding the appropriate justification for the defendant's duty of restitution from unjust enrichment.

This article departs from the Western approaches and explores the justifïcatory idea of unjust enrichment by examining how the ancient Chinese dominant philosophy of Confucianism shaped and influenced current Chinese doctrines of unjust enrichment. Confucianism is a school of thought which gained predominance in the Han Dynasty (206 BCE-220 CE). Since then, Confucian ethics gradually became a universal yardstick that guided conduct, thought, and relationships in Chinese society. The modern notion of unjust enrichment was fïrst introduced in China when the Qing government drafted China's first modern civil code in 1911, modeled after the German Civil Code.8 Since then, nearly all Chinese civil codes formulated, enacted, or drafted in recent history have contained the notion of unjust enrichment, although the rules in this regard were gradually simplifïed, especially after the establishment of the People's Republic of China ("PRC"). Although the PRC outwardly severed ties with traditional cultures in 1949 and looked to Marxism-Leninism for a new socialist legal system, the influence of Chinese tradition has endured.9 A historical review reflects the conformity of modern unjust enrichment doctrine with China's traditional social and ethical values, which are deeply influenced by the Confucian thoughts, contributed to its continuous adoption in the Chinese legal system.

Ho wever, how the unjust enrichment doctrine aligns with China's traditional values and what these values are require further exploration. Despite the preservation of the law of unjust enrichment, it has received considerably less attention in China compared to other areas of private law such as property, contract, and tort laws. No one has conducted a comprehensive analysis on the justifïcation of the law of unjust enrichment in China. Without understanding the justificatory ideas and why it is adopted by the Chinese legal system, this area of law is built on a shaky foundation. Therefore, this article seeks to identify the justification for the Chinese law of unjust enrichment and establish a Confucian account of the doctrine based on China's particular historical, legal, and social contexts. This is the first time the law of unjust enrichment has been explained with Confucian ideas. The Chinese perspective can also shed light on debates over the justification of unjust enrichment among common law scholars.

Following this introduction, Part II traces the origin and development of unjust enrichment since ancient China.10 The historical analysis reflects that despite lawmakers' confusion over the doctrine, the notion of unjust enrichment has been persevered in the Chinese legal system throughout different historical periods. Part

III introduces the current doctrines of unjust enrichment and lays a foundation for exploring the justification of the doctrine in the modern Chinese legal system. Part

IV assesses the justifïcations for unjust enrichment proposed by common law scholars in the Chinese landscape and contends that none of the justificatory ideas provide a sufficiënt account of unjust enrichment liabilities in Chinese law, either due to their inherent deficiencies or incompatibilities with Chinese law. Nevertheless, some insights can still be drawn from these Western justificatory ideas. Part V proposes the author's own account of the Chinese law of unjust enrichment grounded in Confucianism. Part VI offers concluding remarks.

II. A HISTORICAL REVIEW

A. Rules Preventing "Unjust" Enrichment in Ancient China Codes

In ancient China, two concepts mirrored the Western notion of Iscw.fa and liu Fa is chiefly associated with the Legalist school of thought that gained prominence during the Warring States Period (475-221 BCE).12 Although fa literally is translated as "law," its scope is much narrower, focusing mainly on rules and punishments.13 Fa refers to compulsive, punitive rules that could be enforced by legal sanctions.14 Legalists believed in the inherent selfishness of humans and emphasized the imposition of stern punishments to obtain obedience and maintain social order.15 Li, traditionally associated with Confucianism, is conventionally translated as "rites" or "rituals." In a wider sense, // can be understood as "propriety, ethics, or moral rules of correct conduct and good manners."16 In fact, Confucianists called all rules that regulated social relations, curbed human desires, and upheld moral habits by the generic name of li}1 Li thus referred to a set of moral rules governing individuals' proper conduct and behavior according to their status in society and families.18 Confucianism was pessimistic of law and punishment as the governing tooi because the philosophy's goal was not merely to create a society where individuals refrained from misconduct to avoid legal punishments.19 Instead, Confucianists emphasized the educational function of // to encourage individuals to actively seek good.20 Li served as guidelines for proper social behaviors, regulating civil activities and conduct, and imposing obligations among citizens according to their status in society and family.21 Li is persuasive and preventive, which can be understood as rules enforced by society rather than by the government.22 To a Confucianist, the governance of a state should be achieved through // and its moral teaching to maintain an ideal social order, which influenced members of the society in a broad and permanent way, while fa and punishment had only short-term effects.23

Since the Han Dynasty (206 BCE-220 CE), Confucianism was adopted as the State orthodoxy and the miers elevated // above fa and fused the two.24 Han Confucianists sought to combine // and^a to govern society. The Confucian rule of reason demands that law should reflect ethical values in // that one needs to follow to act in a proper marmer.25 Moral principles laid down in Confucianism were accepted not only as a code of conduct but also as a frequently used basis for adjudicative decisions.26 The legal codes promulgated in the Chinese dynasties created no citizens' rights but were concerned about crimes and punishment, used by the rulers as a tooi of governance to safeguard the hierarchical social orders and the state's interests,27 while matters of a civil nature are basically regulated by Z/.28 The notions of civil law, including the unjust enrichment concept, were totally absent from those legal codes. Nevertheless, the substantive contents of the legal codes dealt with not only crimes and punishments but also many civil issues, although the legal norms were normally backed by criminal sanctions.29 The objective of these codifïed legal rules was not to create or protect the rights of citizens but rather to maintain social order by punishing people who breached that order.30 One may spot certain legal rules scattered throughout the codes of different dynasties, requiring individuals who benefïtted without any justifïcations to give up the benefits and be punished. In the Warring States period, Fa Jing (Canon of Law s), the earliest legal code in imperial China, stated that a person who found and kept lost property should be subject to the punishment of death.31 During the Tang Dynasty, Tang Lv Shu Yi (Annotation of Tang Code) decreed that individuals who falsely claimed ownership of another person's slave or property should be subject to a punishment of forty lashes as if they had committed a criminal offense.32 During the Ming and Qing dynasties, regulations required restitution of lost belongings. Such rules stated that a person picking up lost property should turn in the property to a government official within 5 days otherwise the founder may be regarded as a thief if the property belonged to the state, and the property should be confïscated fully or in half depending on whether it originally belonged to the state or an individual.33 These legal mies that stripped people of enrichment obtained without justification indicate that retaining unexplained gains was morally undesirable and contrary to traditional Chinese values formed under the Confucianism.

B. The Transplantation ofUnjust Enrichment in the Late QingDynasty

Following its losses in the Opium Wars in mid-1901 century, China was compelled to open its door to foreign economies,34 and ancient Chinese law became incompatible with the dramatic social and economie in China.35 In 1902, the Qing government initiated a modernization of China's legal system in line with Western jurisprudence with the immediate purpose to abrogate the humiliating extra-territorial rights forced on China by Western states.36 During this process, China's first civil code draft, The Draft of the Civil Law of Great Qing (hereafter "Qing's Draft Civil Code"), was finalized in September 1911 under tremendous time pressure,37 in which the modern notion of unjust enrichment received its earliest description in China.38 A Japanese jurist, Matsuoka Yoshimasa, compiled the first three books of the code: "General Principles," "Obligatory Rights," and "Law of Rights in Rem"39 The contents of these books borrowed heavily from the German and the Japanese civil codes, and introduced concepts of civil law that had not previously appeared in China's history.40 One chapter in "Obligatory Rights," was devoted to unjust enrichment and consisted of sixteen articles, Articles 929 to 944.41

Unjust enrichment was recognized as a causative event giving rise to obligatory rights alongside torts, contracts, and negotiorum gestio.42

Article 929 of the Qing's Draft Civil Code provided the general principle of unjust enrichment:

A person obtaining benefits from another person's performance or in any other way without legal grounds, which results in another's loss, is bound to return the benefits. The duty also exists if the legal ground falls away subsequently or if a transfer fails to produce the result it was intended to produce in accordance with the contents of the legal act.

Acknowledgement of the existence or non-existence of an obligation shall be deemed as performance.43

This provision was nearly identical to section 812 of the German Civil Code, following the German dichotomy of performance- and non-performance-based unjust enrichment.44 In fact, Qing's Draft Civil Code borrowed the whole chapter on unjust enrichment from the Gemran Civil Code.45 This reveals that the doctrine of unjust enrichment was fïrst transplanted into China by directly duplicating provisions from the German Civil Code. The transplantation took place when nearly no civil law had been developed in China. The draftsmen did not conduct in-depth research on the history and operation of the law of unjust enrichment due to time constraints. Although the Qing's Draft Civil Code never came into effect due to the collapse of the Qing Empire,46 it paved the way for the development of civil laws in China, including the law of unjust enrichment.47

C. The Preservation of Unjust Enrichment Provisions in the Kuomintang Era

The 1911 Revolution overthrew the Qing dynasty and gave birth to the Republic of China.48 Despite the political volatility of this period, the Republican government endeavored to enact a civil code.49 In 1925, the Beiyang Government (1912-28) drew upon the Qing's Draft Civil Code and drafted the civil code of the Republic of China (hereafter the "1925 Draft").50 This draft included a subchapter on unjust enrichment, containing thirteen provisions, Articles 273 to 285, the contents of which remained mostly unchanged from those in the Qing's Draft Civil Code.51

When the Nationalist Government replaced the Beiyang Government in 1928, the former established the Commission on Civil Codifïcation, which formulated the Civil Law of the Republic of China (hereafter the "Republican Civil Code") in 1930.52 This is the fïrst formally implemented civil code in China's history.53 The Republican Civil Code drew heavily on the Qing's Draft Civil Code and the 1925 Draft but also drew inspiration from other Western jurisdictions, mainly Germany, Japan, and Switzerland.54 The Republican Civil Code also recognized unjust enrichment as a cause of obligatory rights.55 Article 179 of the Republican Civil Code simplifïed Article 929 of the Qing's Draft Civil Code, stipulating that "A person obtaining benefits without a legal ground and resulting in another's loss should return the benefits. The duty also exists if the legal ground later lapses."56 The dichotomy of performance- and non-performance-based unjust enrichment was discarded. The total number of unjust enrichment articles in the Republican Civil Code shrunk to five (Article 179 to Article 183).57

Although the Republican Civil Code was based on the Qing's Draft Civil Code and the 1925 Draft, lawmakers made two significant changes. First, they attempted to adapt the German-modeled code to conform more closely to local customs and societal norms. Many other provisions were eliminated to give space for local customs long embedded in Chinese society such as dian quan and yongdian quan.58 Second, lawmakers explicitly declared that just like public law, private law would also play the finiction of governing society and maintaining social order.59 In comparison to the Qing's Draft Civil Code, the Republican Civil Code centered on the broader society rather than on the interests of the individual, the latter of which the drafters believed would incentivize self-interest over social welfare in the law.60 The simplification of the law of unjust enrichment in the Republican Civil Code demonstrates that the lawmakers considered the unjust enrichment doctrines in previous drafts overly complicated and excessive. Nevertheless, the law of unjust enrichment was still preserved. With its emphasis on societal welfare and alignment with China's traditional culture and customs, the preservation of the law of unjust enrichment indicated that the lawmakers in Republican China perceived the notions of unjust enrichment to be consistent with Chinese traditional values and that its imposition of restitutionary duties was conducive to social governance.

D. The Simplifïcation of the Law of Unjust Enrichment in the People 's Republic of China (PRC)

When Mao Zedong established the PRC, he declared that the country would embrace Marxism-Leninism as its official ideology and was no longer encased with the "three mountains:" "feudalism, imperialism, and bureaucrat-capitalism."61 The Chinese Communist Party (CCP) denounced the Kuomintang's legal system and began to construct its own based on the socialist system of the Soviet Union.62 For over three decades, the Soviet-style planned economy and PRC Marxist ideology dominated the country and refused to recognize private ownership. This created significant obstacles to the development of private law.63 However, the CCP attempted to draft a civil code to fïll the legal vacuüm. Four rounds of civil law codifïcation were initiated in the 1950s, 1960s, 1980s, and 1990s but failed outright due to various reasons as illustrated below. These unsuccessful attempts led to a piecemeal approach to implement separate civil law statutes.64 This section presents an overview of the evolution of the law of unjust enrichment at the different stages of the PRC.

1. Dr aft civil codes in the 195 Os and 1960s

The fïrst round of civil law codifïcation commenced in 1954, during which three versions of the 'Law of Obligations' were created and modeled after the Soviet Union.65 The centrally planned economy did not allow much attention to be paid to the law of obligations,66 but unjust enrichment remained as a cause of debts in these drafts alongside tort, contract, and planning legislation.67 Provisions concerning unjust enrichment in these drafts required benefits obtained without a legal basis that resulted in another's loss to be returned, but each draft defined unjust enrichment in slightly different ways. The fïrst version excluded circumstances in which the enriched party positively acted to be enriched.68 The second stipulated that an unjust enrichment only occurred when the favoree was enriched due to the aggrieved party's negligence rather than the favoree's intent.69 The third version posited that unjust enrichment only occurred when the enrichment was not acquired by the favoree intentionally or negligently and without a legal or contractual basis.70The changing definitions indicate that the draftsmen were perplexed by what unjust enrichment truly was. All three drafts not only required the defendant to return the obtained gains, namely, to bear restitutionary liability, but also imposed a compensatory liability on defendants for the loss of the claimant on the favoree.71 It can be reasonably concluded from the exclusion of circumstances where the favoree intentionally obtained the benefit and the imposition of the compensatory liability that the draftsmen were uncertain about the boundary between unjust enrichment and torts.72

The fïrst round of civil law codifïcation was abruptly terminated in 1958 due to political campaigns.73 Civil law codifïcation did not resumé until 1962.74 Due to the deterioration of the Sino-Soviet alliance, the second endeavor to codify civil law was a deliberate attempt to move away from the impact of the Soviet model and develop

a civil code with Chinese characteristics.75The drafts completed during this time rejected foreign legislative experience, including conventional civil law concepts, such as 'right', 'obligation', and 'legal person.'76 It is unsurprising that provisions on unjust enrichment were all missing in these drafts.77

2. Dr aft civil codes in the 197 Os and 1980s

The third round of civil law codifïcation commenced in the late 1970s, after the adoption of the renowned "open door" policy and economie reforms.78 Four versions of the civil code were created from 1979 to 1982 based on civil codes rooted in the German tradition, namely the 1962 Fundamental Principles of Civil Legislation of the USSR, the 1964 Civil Code of the Russian Soviet Federated Socialist Republic, and the Hungarian Civil Code of 1978.79 All four drafts included a single provision on unjust enrichment. The provisions on unjust enrichment in the fïrst and second drafts were identical, placed in the chapters concerning special regulations of Tiability for damages' and Tiability for torts', respectively, stating:

Where a person obtains benefits without a legitimate basis and resulting in another person's damages, the person should return the benefits to the aggrieved person or turn over the benefits to the state. The benefits should still be returned where there was a legitimate basis at the time of acquisition while the basis lapses later (such as a revoked legal act). The enriched person unaware of the lack of basis bears no obligation to return if the obtained benefits do not exist anymore.80

The provisions on unjust enrichment in the third and fourth drafts remained largely the same, located in the chapter "Civil Liability (Special Regulations)".81 One minor difference is that the third and fourth drafts explicitly stated that only where the person suffering a loss could not be identifïed should the benefits obtained unjustly be confïscated.

These four drafts considered unjust enrichment as an event giving rise to liabilities rather than a right. The confïscation requirement showed the state's intervention in civil affairs and the impact of socialist ideology on civil law.82It also implies that unjust enrichment was deemed condemnable or even "illegal" to a certain extent. Unjust enrichment was characterized as 'quasi-tortious' at this stage.83

This third round of civil codifïcation was halted by the Standing Committee of National People's Congress (NPCSC) because the economie reforms of the period signifïcantly affected economie and social relations governed by civil law.84The legislators embarked on a more pragmatic "piecemeal approach" (i.e., to pass individual civil law statutes fïrst addressing legal issues in contract law, property law, family law, etc.).85 Under this approach, National People's Congress (NPC) and NPCSC, China's legislative authorities, enacted a large number of individual statutes concerning civil marters in quick succession, including the General Principles of Civil Law of the People's Republic of China (GPCL),86 the Economie Contract Law,87 the Marriage Law88 and the Foreign-Related Economie Contract Law.89

3. The GPCL and the Draft Civil Code in the 1990s

Adopted in 1986, the GPCL framed the fundamental principles of civil law and addressed many subjects, including contract, property, and tort. It has served as an all-embracive mini-civil code for more thanthree decades.90 Article 92 of the GPCL, located in Section 2 'Obligatory Rights' of Chapter V 'Civil Rights', provided the general principle of unjust enrichment. It stipulated that, "[i]f one acquires unjust benefits without a legitimate basis, resulting in another person's loss, the unjust benefits shall be returned to the person suffering a loss."91 This general principle of unjust enrichment remained largely the same as those in the drafts produced during the third round of civil law codifïcation but was simpler.92 A notable difference was that the GPCL did not require unjust enrichment to be handed over to the state, regardless of whether the aggrieved party could be identifïed or not.

In contrast to previous draft civil codes labeling unjust enrichment as a tortious cause of action or other civil liabilities, the GPCL appeared to recognize unjust enrichment as a cause of action triggering a right for recovery. Nevertheless, the expression 'without a legitimate basis' still conveyed the condemnable nature of unjust enrichment. In 1988, the Suprème People's Court (SPC) released a judicial interpretation, Opinions of the Suprème People's Court on Several Issues Concerning the Implementation of the General Principles of Civil Law of the People's Republic of China (For Trial Implementation) ("Opinions on the GPCL").93 This judicial interpretation specifïed that the scope of the defendant's restitutionary duty for unjust enrichment shall include both the initial object and any benefits derived from it.94 Any other benefits obtained through unjust enrichment would be confïscated by the state after deducting the expenses of labor services and management fees. 95 Article 92 of the GPCL, together with this judicial interpretation, constituted the whole law of unjust enrichment implemented in China for decades. The law of unjust enrichment reached its most simplifïed state since its transplantation into China.

Civil law codifïcation resumed in 1998, following the 1993 Constitutional Amendments that replaced the planned economy with the development of a "socialist market economy."96 A draft civil code was produced in 2002, which contained a provision extactly the same as Article 92 of the GPCL.97 Ho wever, this draft was criticized for being merely a collection of existing laws as it was prepared under extreme time pressure.98 As a result, the legislators moved back to the piecemeal approach and ended the fourth round of civil law codifïcation."

The Chinese law of unjust enrichment stabilized after the GPCL was enacted. The mies of unjust enrichment at this stage were overly concise, to the point where they only conveyed a general prohibition against being enriched without a legitimate basis. These scarce and abstract statutory regulations resulted in the inability to address unjust enrichment scenarios in judicial practice and these regulations faced stern criticism from both Chinese legal scholars and practitioners. 10° The law of unjust enrichment, per se, could not answer whether a basis was absent for receiving the benefit. This was instead decided by other branches of law. In many unjust enrichment cases, other branches of law can also be applied to reverse the transferred benefits.101 It appears that the Chinese law of unjust enrichment acted more as a 'catch-all provision', which plays a negative and residual role in correcting the transfers of benefits without a legal basis. One scholar involved in drafting the GPCL pointed out that the inclusion of the unjust enrichment principle was intended to conform with socialist ethics.102

4. Historical Observations

Three observations can be made from a historical review. First, being enriched without a legal basis has been considered morally condemnable during different stages of China's history. In ancient China, although there was no modern notion of unjust enrichment, the codified laws, which were essentially a compilation of ethical values at the time, contained scattered rules and penalties imposed on those who were enriched without basis. In the draft civil codes produced after the establishment of the PRC, legislators were confused about how to distinguish unjust enrichment from torts and imposed not only restitutionary duties but also compensatory liabilities on the defendants of unjust enrichment to make up for the loss of the claimant. Moreover, some of the draft civil codes and the Opinions on the GPCL imposed the confïscation requirement on defendants in unjust enrichment cases, which also indicated that benefïtting without justification was morally condemnable or even illegitimate in nature. Second, the modern law of unjust enrichment was hastily transplanted into China by borrowing the whole chapter from the German Civil Code in the late Qing dynasty, when private law in China was extremely underdeveloped. After transplantation, the concept of unjust enrichment was constantly modifïed, and the unjust enrichment doctrines were continuously simplifïed until only one general principle was preserved. It can be reasonably inferred from the constant adjustment and continuous simplification of unjust enrichment doctrines that China's legislators were perplexed on what unjust enrichment was and why this area of law was needed in the legal system. Lastly, even though the legislators lacked a clear understanding of the law of unjust enrichment and the function of this area of law, the principle of unjust enrichment was retained in nearly all civil codes and drafts in China after being transplanted, whether the country was committed to a capitalist market economy, a centrally planned economy, or a socialist market economy. It seems that Chinese lawmakers at different times took for granted that no one should be enriched at another's expense without justification. The only possible account that can explain the continuous preservation of the notion of unjust enrichment in China is its conformity to traditional Chinese social customs and values that have influenced Chinese people for thousands of years until now.

III. THE CURRENT DOCTRINES

A. Constituent Elements ofAn Unjust Enrichment Claim

The laws of unjust enrichment, consisting of Article 92 of the GPCL and Article 131 of the Opinions on the GPCL, were implemented in China for over three decades until the Chinese Civil Code of the PRC ("Chinese Civil Code"), China's fïrst-ever civil code, was promulgated in 2020.103 Chinese lawmakers declared that the codifïcation of civil law was an important measure to promote the rule of law and ensure effective governance of the country.104 Article 122 of the Chinese Civil Code provides the general principle of unjust enrichment, stating, "[w]here a party is unjustly enriched without a legal basis, the person who so suffers a loss shall have the right to require the enriched to return the enrichment." In response to criticisms of the abstract notion of unjust enrichment,105 the Chinese Civil Code contains one specifïc chapter, Chapter 29, entitled "Unjust Enrichment," which consists of four provisions (Articles 985 to 988). This chapter is located in Part III "Quasi-Contracts" of Book III "Contracts" of the Chinese Civil Code, along with another chapter titled "Negotiorum Gestio." The four provisions in Chapter 29 address specifïc issues of unjust enrichment, including defenses to unjust enrichment claims, restitutionary liabilities assumed by bona fide and mala fïde defendants, and the third party's restitutionary liability. Under the Chinese Civil Code, four elements are required to constitute an unjust enrichment claim: (1) the defendant's enrichment, (2) the claimant's loss, (3) the absence of a legal basis for receiving the enrichment, and (4) no available defenses.

If a claimant successfully establishes the first three constituent elements, they prima facie make out an unjust enrichment case, though subject to any defenses available to the defendant. Article 985 of the Chinese Civil Code provides three defenses against performance-based unjust enrichment claims, stating:

Where an enrichee obtains an unjust benefit without a legal basis, the aggrieved party is entitled to claim restitution of the obtained benefit by the enrichee, except under any of the following circumstances:

(1) performance made to satisfy a moral obligation;

(2) discharge of undue debts; and

(3) discharge of debts knowing there is no such obligation.

Article 986 grants an extra defense to all kinds of unjust enrichment claims (i.e., the defendant's disenrichment). Ho wever, only a bona fide enrichee who did not know and should not have known that the obtained enrichment lacked a legal basis can be exempted from restitutionary liabilities if the obtained enrichment no longer

exists.106

B. Restitutionary Liabilityfor Unjust Enrichment

Under Article 122 of the Chinese Civil Code, the claimant is entitled to claim for return of benefïts in unjust enrichment cases no matter whether the defendant was at fault or not. Unjust enrichment imposes a strict liability Standard, which is independent of the defendant's state of mind. Ho wever, as mentioned above, Article 986 confmes the restitutionary liability of a bona fïde enrichee to enrichment that is still existent.107 According to Article 987, where a mala fïde enrichee knew or should have known the obtained enrichment lacked a legal basis, the aggrieved party is entitled to claim restitution of the enrichment, regardless of whether the enrichment still exists. Moreover, the aggrieved party has the right to claim compensation for loss, if any. Article 988 further stipulates that if the enrichee has transferred the obtained benefïts to a third party gratuitously, the aggrieved can require the third party to bear the restitutionary liabilities to the corresponding extent.

C. Observations from the Current Doctrines

Three observations can be made from the current doctrines. First, the most significant progress made by the Chinese Civil Code regarding the law of unjust enrichment is the provision of defenses available to the defendant. This change means that the legislators realize that being enriched without a legal basis does not always lead to injustice or unfairness to the claimant. Defenses should be provided in case the imposition of restitutionary liability prejudices the defendant's interests. However, in what kind of circumstances should the law provide a defense for the defendant in unjust enrichment? In other words, how can we decide whether it is justifïed to impose restitutionary duties? This question can only be answered after we have a better idea of the justifïcation of the Chinese law of unjust enrichment.

Second, Article 122 of the Chinese Civil Code changes the core element of unjust enrichment from "without a legitimate basis" in Article 92 of the GPCL to "without a legal basis."108 The previous confïscation requirement in Article 131 of the Opinions on the GPCL no longer applies.109 These changes remove the layer of illegitimacy from unjust enrichment. If so, why is the defendant obliged to return the enrichment?

Third, the law of unjust enrichment becomes more like a unifying area of law instead of a catch-all provision with a specific chapter being devoted to it. Although the unjust enrichment chapter is in Book III Contracts of the Chinese Civil Code, under the misleading heading 'Quasi-Contracts' together with another chapter titled

"Negotiorum Gestio", it does not mean that unjust enrichment is a sub-species of contract. The subchapter 'quasi-contracts' was created for pragmatic reasons.110 The Chinese Civil Code lacks a book concerning general provisions on the law of obligations and leaves no room for the mies of unjust enrichment and negotiorum gestio, which are thus placed in Book III Contracts.111 Unjust enrichment acts as a distinct cause creating obligatory rights, literally a "causative reason of obligations" just like contract and tort.112 Despite this change, the justification for having this area of law in the Chinese legal system remains unanswered.

IV. JUSTIFICATORYIDEAS PROPOSED BY COMMON LAW SCHOLARS

There are three main justifïcatory ideas that have been proposed by Western scholars that attempt to provide an account for unjust enrichment liabilities: corrective justice justification, instrumental justification, and proprietary justification.113 This section discusses each of these justifïcatory ideas and assesses whether any of them are compatible with or offer an account for the Chinese law of unjust enrichment.

A. Corrective Justice Justification

Although there are differences of opinion, the view that corrective justice provides a justification for the restitution of unjust enrichment was once considered orthodox.114 In Aristotle's classic account, there are two forms of particular justice: Of particular justice and that which is just in the corresponding sense, (A) one kind is that which is manifested in distributions of honour or money or other things that fall to be divided among those who have a share in the constitution (for in these it is possible for one man to have a share either unequal or equal to that of another), and (B) one is that which plays a rectifying part in transactions between man and man.115

In this passage, "(A)" refers to distributive justice concerning the distribution of social benefits and burdens based on some external criterion. "(B)" references corrective justice, which concerns the justice between two transacting parties and rectifies the injustice inflicted by one person on another.116 Corrective justice postulates a form of pre-transactional equality between two parties and requires respect for their equality. When a beneficiary receives their gains from another party, corrective justice requires the beneficiary to return the gains to the losing party to restore bothto the initial equilibrium.117 Proponents of the corrective justice account of unjust enrichment point out that corrective justice matches the structure of unjust enrichment, which involves a gain by the defendant and a loss by the claimant caused by a transfer of wealth from the claimant to the defendant.118

A "thin" account of corrective justice proposed by John Gardner argues that "a norm of corrective justice is a norm that regulates (by giving a ground for) the reversal of at least some transactions."119 Following an unjust enrichment, unjustly transferred wealth needs to be allocated back from the defendant to the claimant to achieve corrective justice.120 Corrective justice provides the reason for allocating back. Ho wever, this account is criticized for lapsing into a circular argument. If the law of unjust enrichment calls for correction because failing to correct does not conform to corrective justice, then what is the ground for correction?121 It is still unclear what gives rise to the restitutionary obligation in the fïrst place.

Ernest Weinrib's account of corrective justice is considered the "thick" account.122 According to Ernest Weinrib, an unjust enrichment liability consists of two elements: (i) the transfer of value from the claimant to the defendant, and (ii) the absence of the claimant's donative intent and the defendant's acceptance of the benefit as non-gratuitously given.123 "Value" does not refer to a kind of asset but represents the relative worth of a thing, which is transferred if the transferor gives another something of value for noting or something of lesser value in return.124 Aristotle's form of corrective justice entails three features that are manifested in the principle of unjust enrichment: (i) the correlative situation of the parties; (ii) the correlativity between the claimant's right and the defendant's duty; (iii) the Kantian conception of parties as self-determining agents.125 In the principle of unjust enrichment, the parties are correlatively situated as the transferor and transferee of value.126 As equal self-determining persons where the claimant has no intention to make a gift, the transfer of something for nothing is defective.127 The defendant cannot assume that the gratuitously transferred benefit was given as a gift.128 The absence of intent to gift constitutes the claimant's obligation-creating condition, and the acceptance of a non-gift is the defendant's obligation-creating condition.129 Therefore, "the non-gratuitousness of the transfer of value" creates the claimant's right and the defendant's correlative duty to retransfer the value. Weinrib's theory is subject to serious criticism for failing to explain the restitutionary duty for unjust enrichment where the defendant is a passive recipiënt of mistransferred wealth with no wrongdoing.130 The defendant's acceptance element identifïed by Weinrib in unjust enrichment requires the defendant's knowledge of not only the fact of receiving the benefit but also the fact that the benefit was transferred non-gratuitously. The awareness signals that the defendant exercised a choice when the non-gratuitous transfer of value was made.131 The exercise of choice makes the defendant's wrongdoings central, while unjust enrichment liabilities are strict, or do not depend on any wrongdoing by the defendant. As a result, corrective justice only justifïes unjust enrichment cases where the defendant freely accepts the benefit conferred by the claimant that could have been refused. However, it leaves situations where the defendant did not know the transfer of value as non-gratuitously given untouched, which does not square with modern unjust enrichment theory.132

Some Chinese scholars also argued that the imposition of a restitutionary duty for unjust enrichment aimed to achieve corrective justice.133 However, these scholars jumped into this conclusion based on the intuitive plausibility of connecting liability for unjust enrichment to corrective justice and failed to pro vide an adequate theoretical account or discuss the corrective justice theory in the context of Chinese law.134 None of the Chinese scholars noted or acknowledged that corrective justice per se is only a form of justice lacking substantive content, as pointed out by critics of the "thin" account of corrective justice. Neither did they make any efforts to give corrective justice to the content it lacks to serve the basis justifying unjust enrichment liabilities. Deficiencies in the "thin" and "thick" accounts of corrective justice discussed by common law scholars still exist if applied to the Chinese law of unjust enrichment. Under Chinese law, once unjust enrichment is established, liability is strict and independent fromthe defendant's fault. The defendant is bound to return no matter whether he was aware of the receipt of the benefits or the lack of a legal basis for receiving such benefits or had a choice to turn down the enrichment.135 In this regard, corrective justice fails to account for unjust enrichment liabilities in Chinese law.

B. Instrumental Justification

According to the instrumental justification, as proposed by Hanoch Dagan, the normative underpinnings of the law of unjust enrichment are our commitments to a set of core liberal values: autonomy (i.e., the right of self-determination), utility (i.e., human welfare), and community (i.e., cooperation and mutual support).136 Hanoch Dagan argues that "restitutionary doctrines protect the integrity of certain types of relationships by providing guarantees against betrayal of trust and making free-riding a losing proposition."137 Unjust enrichment is "a loose framework and an invitation to a normative inquiry."138 In the paradigmatic example of unjust enrichment (i.e., mistaken payment), the law of unjust enrichment imposes a restitutionary liability to vindicate the mistaken payer's autonomy, which is at stake. First, the transfer is not a result of the mistaken payer's autonomous decision. Validating such a transfer would violate the maxim that "the exercise of (subjective) free will should be the prerequisite to any legitimate transfer of, or interference with, resources."139 Second, by "softening the possible tangible losses of mistakes," the granted restitutionary remedies expand the claimant's freedom of action. Lastly, it promotes the integrity of the claimant's self by "preserving the record of her mistake while nullifying the unintended consequences of her action."140 The law of unjust enrichment acts as "safety nets for trusting parties (benefïciaries, intimate partners, co-owners, and even business transactors) and by recruiting third parties (service suppliers and potential transferees)."141 Steve Hedley attacks the instrumental justifïcation for being "disruptive and unsettling" and unable to explain the current law of unjust enrichment.142 It provides a "charitable interpretation" instead, which takes the existing unjust enrichment doctrines only as a starting point, identifies the human values underlying these rules, and gives "forward-looking interpretations of the rule that best promote these values."143

If we consider instrumental justifïcation in the context of Chinese law, the goals of pursuing and promoting autonomy, utility, and community are also indeed desirable. Ho wever, there is a missing link between the pursuit of these values and the Chinese law of unjust enrichment. First, it is questionable whether the law of unjust enrichment is inherently tasked with promoting these aforementioned values in the Chinese legal system. It is worth considering whether these values should or can also be promoted by other branches of private law. Second, if we apply the current doctrines of unjust enrichment in Chinese law to various types of unjust enrichment, whether and how the case results are able to promote the values of autonomy, utility, and community can only be testifïed with a comprehensive analysis. If not, the next question is whether and how the Chinese law of unjust enrichment should be revised to achieve these values. Then we must get back to the question that remains unanswered in the beginning: why and how should the Chinese law of unjust enrichment be justified by these core liberal values? These questions are worthwhile to consider, while they are beyond the scope of this article.

C. Property Justifïcation

Another prevailing approach to unjust enrichment is property-based, which argues that property or ownership interests offer an explanation of restitutionary duties for unjust enrichment.144 A property-based account argues that at the core instances of unjust enrichment, the defendant receives or uses or in some other ways benefits from property owned by the claimant while they did not consent to the transfer or employment of their property.145 Unjust enrichment claims should be understood as a means of "effectuating the claimant's exclusive interest in determining the disposition of his assets."146 The defendant is obligated to give up a particular gain because the claimant enjoys an exclusive entitlement to the asset granted by the law, namely, the ownership interests. As the owner of property, the claimant should be entitled to "exclusive use privileges and control power," which extends to excluding others from use and enjoyment of the property.147 The claimant can assert their continued entitlement to the property unless he has effectively consented to its transfer to the defendant.148 The law's protection of interests in property extends far beyond the law of property, and the law of unjust enrichment role in reversing defective transfers should be properly seen as part of that protection. Critics argue that the property justification is inadequate in that it fails to justify many of the interests protected by the law of unjust enrichment, which conventionally are treated as non-proprietary, such as trade secrets and interests in one's reputation, name, or other personal characteristics.149 Therefore, a property-based approach may lead either to a narrow approach to unjust enrichment as "a vindication of rights to property stricto sensu" or an expansive notion of property.150

This property-based approach to unjust enrichment seems to be even more incompatible with the Chinese legal system, a mainly civil law system, compared to common law jurisdictions. The reason is twofold. First, the Chinese Civil Code explicitly specifies that unjust enrichment only triggers obligatory rights (i.e. personal claims),151 deciding its marginal role in vindicating proprietary rights. It is generally agreed that Chinese property law does not accept the principle of abstraction.152 A flawed underlying obligation affects the validity of the transfer of ownership. As a result, where a claimant's consent to transfer an asset is seriously defective, ownership does not pass due to the lack of a valid legal basis. For instance, if the claimant transfers an asset to the defendant under a contract in which he entered under a material mistake, the claimant can ask a court to rescind the contract and the contract will be invalid ab initio.153 The ownership of the asset remains with the claimant throughout. To seek recovery of the asset, the claimants' primary option is to raise a proprietary claim, which ranks in priority to the general creditors of the defendant and is more likely to be realized compared to an obligatory claim.154 If the ownership passes, the ownership constitutes a legal basis for the defendant to retain the asset. The claimant thus cannot raise an unjust enrichment claim for recovery. Therefore, there is little room, if any, for the law of unjust enrichment to vindicate proprietary rights in the Chinese legal system. Second, the boundaries among different areas of law are more strict and rigid in Chinese law compared with those in common law, which has been pragmatically developed by cases and traditionally is indifferent to taxonomy.155 There is a clear line between the law of obligations and property law in the Chinese legal system. The law of unjust enrichment forms part of the law of obligations, as it only gives rise to obligatory rights.156 It is thus hard, if not impossible, to argue that the purpose of having the Chinese law of unjust enrichment is to provide a means for protecting proprietary interests and justifying unjust enrichment liabilities with a property-based approach.

V. JUSTIFICATORYIDEAS IN CONFUCIANISM

The historical evolution demonstrates that the idea against profiting without a basis has been continuously preserved in the Chinese legal system throughout different historical periods since Ancient China, irrespective of the country's political or economie models.157 One possible reason for that is the conformity between the Western notion of unjust enrichment with China's traditional moral and ethical values against benefïting from others' efforts without contributing. 158 It is no wonder that the main Western justifïcatory ideas fail to explain this area of law in China. Ho wever, how the notion of unjust enrichment aligns with China's traditional values requires further exploration. For most of China's long history, law in the Western sense played a relatively minor role. The source of the long-held idea against profiting without a justification may stem from the most influential philosophical thinking in China - Confucianism, which not only has strongly influenced China's traditional moral values and legal systems but remains influential in Chinese society nowadays.159 This section thus seeks to explain China's current law of unjust enrichment with Confucianism. It first looks at the Confucian system to identify the philosophical ideas against being enriched without a legal basis encompassed in Confucian thoughts. It then offers a theoretical account of unjust enrichment based on Confucian thoughts to answer the core question: What is the justifïcation for unjust enrichment liabilities? This Confucian account is tested against current doctrines of unjust enrichment in China to see whether they square with each other.

A. Unjust Enrichment Ideas in Confucianism

Unjust enrichment is not directly addressed when looking at Confucian ideas from a modern legal perspective. Ho wever, a close inspection of the Confucius teachings reveals relevant principles proscribing or condemning profiting without justifïcation. Requiring the retransfer of such benefits promotes the maintenance of harmonious relationships among members of society, which is the ultimate social goal pursued by Confucianism.

1. The Blameworthiness of Free-riding

In Confucianism, the term "Junzi," often translated as "noble man," refers to a model of human excellence.160 A noble man should continuously seek to satisfy the "five constant virtues," consisting of ren (benevolence), yi (righteousness), li (propriety), zhi (wisdom), and xin (trustworthiness).161 Confucianism holds that these five constant virtues constitute the most significant values needed to live a moral life.162 Rulers can build a harmonious society through good governance underpinned by the five constant virtues.163 Upon an inspection of traditional Confucian literature, we fïnd that Confucius made many remarks on profïts, implying that benefïtting from the misfortune of others is contrary to the requirements of the five constant virtues.

In the "Yong Ye" chapter of the Analects, a collection of Confucius' sayings, Confucius said, "The benevolent man reaps the benefit only after overcoming diffïculties. That can be called ren (benevolence)."164 Ren is the essence of li, which encompasses all the sentiments of goodness a virtuous man should possess.165 According to this statement of Confucius, a requirement of ren is that any benefit should be obtained only after the person pays certain efforts. Therefore, a benevolent man should refrain from being enriched without any justifications.

"Yi (righteousness)" refers to the virtue of engaging in conducts that are considered morally correct by nature and fulfïlling one's duties to family, community, and the state.166 Confucian thinking prioritizes righteousness over profit. In the "Li Ren" chapter of the Analects, Confucius stated, "Junzi (noble man) aims for yi (righteousness). Xiaoren (small person) aims for pro fits."167 Xiaoren, literally translated as "small person," refers to someone opposite to junzi, in whom little good is found.168 This statement underscores the idea that a morally superior person values righteousness and ethical behaviors over personal gains. A passage in the "Xian Wen" chapter of the Analects states:

The Master asked Kung-ming Chia about King-shu Wen-tzh, "Is it true that your Master never spoke, never laughed and never took anything"? Kung-ming Chia answered, "Whoever told you that exaggerated. My Master spoke only when it was time to speak, and so people never grew tired of his speaking. He laughed only when he was joyful, so people never grew tired of his laughing. He took only when it was consistent with righteousness to do so, and so people never grew tired of his taking."169

Accordingly, Confucianism does not oppose all pursuit of gains or interests, rather it emphasizes that interests should be sought in an ethically sound way that is consistent with righteousness.170 Where one is unjustly enriched, namely pro fiting from another's misfortune without a legal basis under current Chinese law, the enriched person did not make an equivalent effort to receive the enrichment. The enrichment lacks sufficiënt justifïcation. Unjust enrichment contradicts Confucian virtues and is deemed morally condemnable and unacceptable.

2. Harmony and Reciprocity

Western philosophy emphasizes individualism, while different from that Confucian ethics focus on a social structure consisting of human relationships.

Confucianism posits constructing the Great Harmony society (datong shehui) as the ultimate social goal.171 Social harmony and the maintenance of social order prevail over individual rights.172 Harmony in Confucianism transcends mere tranquility, embodying a comprehensive moral order and mutual respect among individuals.173 Confucius portrayed the world of the Great Harmony society as follows:

When the mie of propriety prevailed, the world community was equally shared by all. Virtuous, worthy, wise and capable people administrated state affairs. Honesty and trust were promoted, and good neighborliness cultivated. All people treated other people's parents and children with the same love and affection as they did their own. The aged had abundant resources to enjoy their lives till their death, the adult were employed, and the young were nourished, educated and fostered. The widowed, the orphaned, the old and childless, as well as the diseased and the disabled were all well taken care of. While men worked outside, women kept homes in order. While they hated to see wealth lying idle or cast away, they did not necessarily keep it for themselves. While they hated not to make use of their abilities, they did not necessarily work for their own self-interest. Thus intrigues and conspiracies ceased to appear, and robbers, thieves and other lawless elements failed to arise, so that doors need never be locked.174

In the ideal society described above, virtue, respect, and communal care are paramount. This description reflects the belief in Confucianism that individuals should not selfishly hoard wealth or seek personal gains for self-interest. Instead, members of society should ensure that resources are fairly distributed to all members of society and not take resources that have been distributed to others.

A crucial requirement for forming a harmonious society is the principle of reciprocity. 175 Confucius and Mencius emphasized fïve cardinal human relationships: rul er and subordinate, father and son, husband and wife, elder brother and younger brother, and friend and friend.176 Other relationships in the state are an extension of these fïve core relationships.177 In each human relationship, both parties involved must reciprocally fulfïll their responsibilities and duties to jointly realize the ideal of the relationship.178 The principle of reciprocity is considered the "golden mie" of Confucianism, consisting of two notions: zhong and shu. These two notions represent the "positive" and "negative" aspects of the principle of reciprocity.179 The notion of zhong is, "Do to others what you wish yourself."180 Shu means, "Do not do to others what you do not wish them to do to you."181 To become a virtuous man, one needs to follow this Golden Rule in their interactions.182 The principle of reciprocity requires that individuals should act with consideration for other's well-being as the way to practice ren.

As noted above, Confucianism deerns profïting at the expense of another's misfortune morally condemnable. Under the notion of shu, if one does not want others to gain benefits at their expense without a legal basis, one should refrain from doing the same to others. Under the positive notion of zhong, if one expects those who are unjustly enriched at their expense to return the benefits, they must also be willing to return any benefits when they are unjustly enriched. The Confucian thought of reciprocity necessitates that unjust enrichment be addressed and rectifïed to maintain social order and promote a harmonious society grounded in mutual respect and ethical integrity.

3. Distributive Justice

As discussed above, one explanation by Western scholars for unjust enrichment is based on Aristotle's conception of corrective justice which considers the striking similarity between the structure of unjust enrichment and the notion of corrective justice.183 Corrective justice correlates the enriched person with the person suffering a loss and considers the defendant's gain and the plaintiff s loss as an injustice that should be undone by eliminating the gain and the loss.184 In a corrective justice system, the correlation between injustice and its rectifïcation forms the basis of liability.185 A liability can only be imposed on the defendant with reference to the plaintiff "in whose favor the liability runs."186 As such, restitutionary duties for unjust enrichment can arise only with the horizontal and correlative legal relationship between the parties to restore their equality prior to the transaction.

However, Confucianism emphasized a hierarchical social structure and inequality in social status.187 No horizontal interpersonal relationships or correlations were developed in traditional China. Society was structured on the basis of unequal human relationships, creating mutual but different obligations.188 Hierarchical distributive justice was established rather than corrective justice.189 Distributive justice does not only concern two parties, but also members in the society, who in the distribution receive their shares in accordance with certain criteria that compare the relative merits of the members.190 Confucianism requires benefits to be distributed to members according to their social status and contributions to society so that people can live in an ordered society.191 It is the government's responsibility to distribute benefits, which belong to political affairs and form part of the social order.192 When an injustice occurs between two parties, they should report the facts to the government and beg the government to undo the injustice.193 Unlike corrective justice which focuses on the equalization of gain and loss between two parties, Confucianism suggests that those who enforce the law should follow high-level principles without bothering with negligible details.194 In the process, minor gains or losses should be neglected.195

The corrective justice justifïcation of unjust enrichment has been criticized for failing to explain the imposition of restitutionary liabilities where no wrong is committed by the defendant.196 Where the defendant only passively retained the plaintiff s mistransferred wealth without knowledge of the transfer of value as nongratuitous, an additional justifïcation is needed for imposing a burden on the innocent defendant to return the benefit. However, if we explain the restitutionary liability with Confucianism where one party gains due to another party's loss, the losing party can claim that a benefit that originally was distributed or should have been distributed to him in society has been taken away. Therefore, Confucianism compels the enriched party to return the benefit and undo the injustice. Even though the transfer may place an extra burden on an unknowing defendant, from the perspective of Confucianism, this extra burden is minor and should be neglected, especially for the purpose of achieving harmony between the parties and in society.

4. A Confucian Account of Unjust Enrichment

The justifïcatory ideas extracted from Confucianism may provide an answer to explain why Chinese law imposes restitutionary liability for unjust enrichment. Under the current Chinese law, unjust enrichment cases involve: (i) the defendant's enrichment, (ii) the absence of a legal basis for the defendant's enrichment, and (iii) the claimant's loss caused by the defendant's enrichment.197 The justifïcation for the defendant's restitutionary duties is twofold. First, Confucianism views profiting from another's misfortune without a legal basis per se makes the defendant's gain morally condemnable because the defendant did not put any effort into justifying their gain. The loss caused to the claimant is a deprivation of the claimant's interest that was distributed or should have been distributed to them, which violates distributive justice. The deprivation of the claimant's interest due to the defendant's morally condemnable gain justifies the creation of duties on the defendant to return the benefit. Second, similar to common law, liability in unjust enrichment is also strict under Chinese law which means that whether the defendant was at fault for their gain is irrelevant.198 It is true that the imposition of restitutionary liability creates a burden on the innocent defendant who passively received the benefit without opportunity to reject it or knowledge for having been enriched. In such cases, the law may act against the defendant. However, an observation can be made from the historical review of China's history, the Confucian codes of conduct,199 codifïed legal rules in ancient China governing civil marters and backed up by punishments, 200 civil law in China's Republican era201 and the current Chinese Civil Code,202 that all had been or are used by governors as a mechanism to govern the country and maintain social order. In this vein, the law of unjust enrichment acts as a mechanism for state governance in China. The law can assume that the defendant as a reasonable person does not want their own interest to be deprived without legal ground. If so, when they benefit in unjust enrichment cases, they should willingly return the benefits to the aggrieved party under the principle of reciprocity instead of arguing that they did not conduct any wrongdoing and should not bear the extra burden of restitution. The return of benefits back to the aggrieved party is conducive to enhancing mutual understanding and trust between members of society and maintaining harmonious personal relationships with each other. The imposition of restitutionary liabilities on innocent defendants is thus justified by its contribution to maintaining social orders and constructing a harmonious society.

This Confucian account of unjust enrichment can also explain the newly added defenses to unjust enrichment claims in the Chinese Civil Code. Three defenses against performance-based unjust enrichment claims are available to the defendants regardless of whether they knew of the lack of a legal basis for their gains: (i) performance made to satisfy a moral obligation, (ii) discharge of undue debts, and (iii) discharge of debts knowing there is no such an obligation.203 Where the claimant transferred the benefit for the purpose of satisfying a moral obligation or discharge of undue debts, the moral obligation or undue debt can serve as a ground for the defendant's gain, although they do not constitute a legal basis. Where the claimant voluntarily enriched the defendant by their performance, knowing they were under no such obligation, it means no defects existed in their intention. The claimant's knowledge removes the moral culpability from the defendants' gain, and the law should allow the defendant to retain enrichment. Another defense against both performance-based and non-performance-based unjust enrichment claims under Chinese law is the disenrichment of bona fide defendants.204 The confinement of the bona fide defendants' liabilities to what is left in their hands avoids imposing an overly onerous burden on the innocent defendants, and aims to achieve a balance between the interests of the claimants and the innocent defendants. This attempt to achieve a balance of interests aligns with the principle of reciprocity and the pursuit of a harmonious society.

VI. CONCLUDING REMARKS

This article explores the core question that has perplexed unjust enrichment scholars for a long time: what justifies restitutionary liabilities for unjust enrichment? The main justifïcatory ideas proposed by common law scholars, namely, the correct justice, instrumental, and property-based justifïcations, while insightful, fail to explain restitutionary liabilities under the Chinese law of unjust enrichment. This article conducts a historical analysis of the Chinese law of unjust enrichment, revealing that the notion of unjust enrichment has been continuously preserved in the Chinese legal system. One possible explanation is that the idea of profiting without justifïcation inherently contradicts traditional Chinese values shaped by Confucianism. Therefore, this article offers a unique perspective for the first time, exploring the justifïcation for unjust enrichment liabilities through a Confucian lens. It identifïes a compelling justification for understanding the underpinnings of unjust enrichment liabilities drawn from Confucianism, based on a historical, doctrinal, and theoretical analysis. The justification resonates with Chinese legal and social norms and can be summarized concisely: A restitutionary duty is imposed for unjust enrichment because pro fiting from another's misfortune is morally condemnable unless there are sufficiënt grounds. The imposition of restitutionary duties on innocent defendants is still just because as a member of the community, the defendants should willingly bear such an extra burden for return under the principle of reciprocity for the purpose of contributing to the construction of a harmonious society. This Confucian account not only provides an explanation for the Chinese law of unjust enrichment but also complements Western theories of unjust enrichment.

Footnote

1 Lionel Smith, Unjust Enrichment, 66 McGlLLL. J. 165, 165 (2020).

2 ld. at 166.

3 ld.

4 See e.g., Mitchell Mclnnes, TheMeasure ofRestitution, 52 U. TorontoL. J. 163,187 (2002); Mitchell Mclnnes, Resisting Temptations to "Justice ", in PHILOSOPHICAL FOUNDATIONS OF THE LAW OF UNJUST ENRICHMENT 100, 119 (Robert Chambers et al. eds., 2009); Ernest Weinrib, The Normative Structure of Unjust Enrichment, in Structure AND JUSTIFICATION IN Private LAW: Essays FOR Peter BlRKS 21 (Ross Grantham & Charles Rickett eds., 2008) [hereinafter Weinrib, The Normative Structure of Unjust Enrichment]; Ernest Weinrib, Correctively Unjust Enrichment, in Philosophical Foundations of the Law of Unjust Enrichment 31 (Robert Chambers et al. eds., 2009) [hereinafter Weinrib, Correctively Unjust Enrichment]; Ernest Weinrib, The Structure ofUnjustness, 92 B. U. L. REV. 1067 (2012); Andrew Botterell, Property, Corrective Justice and the Nature of the Cause ofAction in Unjust Enrichment, 20 CAN. J. L. & JURIS. 275 (2007); John Gardner, What is TortLaw For? PartI: The Place of Corrective Justice, 30 L. & PfflL. 1, 22 (2011); Lione Smith, Restitution: The Heart of Corrective Justice, 79 TEXAS L. REV. 2115, 2133-36(2001).

5 See, e.g., Hanoch Dagan, Restitution and Relationships, 92 B. U. L. REV. 1035 (2012) [hereinafter Dagan, Restitution and Relationships]; Hanoch Dagan, Restitution 's Realism, in PHILOSOPHICAL FOUNDATIONS OF THE LAW OF Unjust Enrichment, supra note 4 [hereinafter Dagan, Restitution 's Realism].

6 See, e.g., Peter Watts, Restitution - A Property Principle and a Services Principle, R. L. R. 49, 49-70 (1995); Nicholas J. McBride & Paul McGrath, The Nature ofRestitution, 15 Ox. J. Legal Stud. 33, 37-39, 43 (1995); Ross B. Grantham & Charles E.F. Rickett, Enrichment And Restitution In New Zealand 18-20, 45-46, 53, 58-60 (2000); Charlie Webb, Reason And Restitution - A Theory of Unjust Enrichment, 55-84 (2016); Charlie Webb, Property, Unjust Enrichment and Defective Transfers, in PHILOSOPHICAL FOUNDATIONS OF THE LAW OF UNJUST ENRICHMENT, supra note 4 [hereinafter, Webb, Unjust Enrichment and Defective Transfers].

7 HSIN-CHUNG YAO, AN INTRODUCTION TO CONFUSCIANISM 36 (2000).

8 See Part II - 2.

9 ChenglinLiu, Confucius and the Chinese Legal Tradition, 28 MlCH. St. Int'lL. REV. 477, 479 (2020); JlANFU Chen, Chinese Law: Context and Transformation 10 (rev. ed. 2015).

10 The author conducted a historical review of the legal transplantation of the law of unjust enrichment in China also in: SiyiLin, A Tale of Transplantation: The Historical Evolution of the Law of Unjust Enrichment in China, in Rethinking Unjust Enrichment: History, Sociology, Doctrine, and Theory 29, 30-44 (Warren Swain & Sagi Peari eds., 2023) [hereinafter Lin, Transplantation of Unjust Enrichment in China]; SlYl LlN, The Law of Unjust Enrichment In China: Necessary Or Not? 42-52 (2022) [hereinafter Lin, Unjust Enrichment]; Steve Gallagher, Siyi Lin and Lutz-Christian Wolff, The History of a Mystery: The Evolution of the Law of Unjust Enrichment in Germany, England and China, 3 INT'L COMP., Pol'Y & ETHICS L. REV. 337, 361-69 (2020). (The descriptions of the history of the Chinese law of unjust enrichment partly overlap with each other but are discussed from different angles.)

11 Sophia Gao & Aaron J. Walayat, The Compatibility ofConfucianism andLaw, 41 PaceL. Rev. 234,239 (2020); Luke T. Lee & Whalen W. Lai, The Chinese Conceptions ofLaw: Confucian, Legalist andBuddhist, 29 HASTINGS L. J. 1307, 1309 (1978).

12 Caleb Wan, Confucianism and Higher Law Thinking in Ancient China, 10 REGENT J. INT'L L. 77, 95 (2013); Lee & Lai, supra note 11, at 1309.

13 Gao & Walayat, supra note 11, at 239.

14 Lee & Lai, supra note 11, at 1308-09.

15 Liu, supra note 9, at 505; Herbert H. P. Ma, The Legalization of Confucianism and lts Impact on Family Relationships, 65 WASH. U. L. REV. 667, 671 (1987).

16 Lee & Lai, supra note 11, at 1308.

17 Chin-tsen Chang, Li andLaw, 2 Chinese Culture 4 (1960).

18 Chen, supra note 9, at 12.

19 Gao & Walayat, supra note 11, at 240.

20ld., at240-41; Chen, supranote 9, at 10-11; LordLloydofHampstead,Introductionto Jurisprudence 760-61 (4thed. 1979).

21 Chen, supra note 9, at 11-12.

22 Chang, supra note 17, at 4.

23 Chen, supra note 9, at 14.

24 Homer H. Dubs, The Victory ofHan Confucianism, 58 J. Am. Oriënt. Soc. 435 (1938); Percy R. Luney, Jr., Traditions and Foreign Influences: Systems ofLaw in China and Japan, 52 LAW AND CONTEM. PROBS. 129, 130 (1989); Lee & Lai, supra note 11, at 1309.

25 Falian Zhang, A Comparative Study of Chinese and Western Legal Language and Culture 182 (2021).

26 Dong Jiang & Xiaohong Ma, TheAnalects andSense ofJustice, 46 Mod. China, 281, 283-84 (2020).

27 Jinfan Zhang, The Tradition and Modern Transition of Chinese Law 271 (2014).

28 Hao Jiang, Chinese Tort Law: Tradition, Transplants andSome Difficulties, in Comparative Tort Law: Global Perspectives 397 (Mauro Bussani & Anthony J. Sebok eds., 2021).

29 Ngoc Son Bui, Confucian Legal Tradition, in The Cambridge Handbook of Compar. L., 256, 259 (Mathias Siems & Po Jen Yap eds., 2024).

30 Tay, The Strugglefor Law in China, 21 U.B.C. L. REV. 561, 563 (1987).

31 Mi Zhou (JUS), Zhongguo Xingfashi (+ SfJJÜ) [History of Criminal Law in China] 181 (1985).

32 Wuji Zhangsun (^#5cë), Tanglü Shuyi (jt#Üi^)[Annotation of the Tang Code] 381 (1993).

33 Daminglü (^vHj#)[Statute Laws of the Ming Dynasty] 82 (Xiaofeng Huai (ff$^) ed., 1999); Daqing Lüli ( XlnWM) [The Law of Qing Dynasty] 271 (Rongzheng Zhang (?£3§#) ed., 1999).

34 Beijing, Humen & Sydenham Hill, The Opium Wars Still Shape China 's View of the West, Economist (Dec. 19, 2017), https://www.economist.com/christmas-specials/2017/12/19/the-opium-wars-still-shape-chinas-view-of-the-west.

35 Chen Lei, The Historical Development of the Civil Law Tradition in China: A Private Law Perspective, 78 Legal Hist. Rev. 159, 161 (2010).

36 Jiang, supra note 28, at 404. Western countries accused the Qing dynasty of being "brutal" and unenlightened and demanded the authority to exercise the extra-territorial jurisdiction pursuant to their own national laws over their citizens residing in certain areas in China. Shiyuan Han, A Snapshot of Chinese Contract Law From a Historical and Comparative Perspective, in Towards a Chinese Civil Code: Compar. And Hist. Perspectives 235, 236 (Lei Chen & C.H. (Remco) vanRhee eds., 2012).

37 Daqing Minlü Caoan/Minguo Minlü Caoan (~Xfn K#^^/K 13 Ï^W^-M) [Draft of Civil Code of the Great Qing Dynasty and Draft Civil Law of the Republic of China] 6 (Lixin Yang (fljALiff) ed., 2002); Philip C Huang, Code, Custom, and Legal Practice in China: The Qing and the Republic Compared 16 (2001).

38 Huixing Liang, The Draft Civil Code of the People's Republic of China XIII (Junwei Fu trans., 2010).

39 Huang, supra note 37, at 16.

40 Liang, supra note 38, at XIII.

41 Yang, supra note 37, at 121-23.

42 ld. at 121.

43 ld.

44 See an unofficial English translation of the German Civil Code. Civil Code in the version promulgated on 2 January 2002 (Federal Law Gazette [Bundesgesetzblatt]

| page 42, 2909; 2003 | page 738), last amendedby Article 1 of the Act of 10 August 2021 (Federal Law Gazette | p. 3515), www.gesetze-im-internet.de/englisch_bgb/englisch_bgb.hünl_[hereinafter German Civil Code].

45 Yang, supra note 37, at 121-23; German Civil Code, sections 812-22.

46 Huang, supra note 37, at 16-7.

47 Xiuqing Li (^5f 'M), 20 Shiji Qianqi MinfaXinchaoliu Yu Zhonghua Minguo Minfa (20 ÜiÖfff M W&iï\WJi _tj ((ff^KII KÖ;)) )[The New Trend of the Civil Law in Early 20th Century and the Republican Civil Code], 1 Zhengfa Luntan (SSfëièis) [Trib. of Political Sci. and L.] 124, 126 (2002); Lei Chen, Continuity and Change: Some Reflections on the Chinese Civil Code, 29 Asia Pac. L. Rev. 287, 290 (2021).

48 HanchaoLu, TheBirthofaRepublic 192-93 (2010).

49 Lei Chen, The Historical Development of the Civil Law Tradition in China: A Private Law Perspective, 78 LEG. HIST.REV. 159, 168(2010).

50 Limin Wang (zEalK), Zhongguo Bainian Minfadian Bianzuan Licheng yu Qishi, ^ ll]=f^K&temppound;ëjfttlf§lf?;3j^l -^3 Jn^K [The Compilation Process of the Chinese Civil Code Over One Hundred Years and Lnsights], 10 FA XUE (jfè ^) [Law Science] 160,163 (2020).

51 Yang, supra note 37, at 238-40.

52 Roscoe Pound, The Chinese Civil Code inAction, 29 TUL. L. REV. 277, 278 (1955).

53 Wang, supra note 50, at 165.

54 George Keeton, The Progress of Law Reform in China, 19 J. Comp. Legis. 197, 208 (1937); Li, supra note 47, at 135.

55 YANHAO LIU BUDANGDELI DE XlNGCHENG YU ZHANKAI THE

Formation and Development of the Law of UnjustifiedEnrichment] 203-04 (2013) (China).

56 ld.

57 ld. at 204.

58 Pound, supra note 52, at 278; Huang, supra note 37, at 53; see also Siyi Lin, Looking Back and Thinking Forward: The CurrentRoundofCivilLaw Codification in China, 52 INT. LAWYER 439, 445 (2019).

59 Rong Chai (^^), Lun Minguo Shiqi De Mini Sixiang OfoRMHMttiWfè&M) [On the Thoughts ofCivil Law in the Period of the Republic of China], 27 HEBEI XUEKAN (MJtl^fiJ) [HEIBEI ACADEMICI] 210, 210 (2007).

60 Huang, supra note 37, at 63.

61 Liu, supra note 9, at 479.

62 Tong Rou, The General Principles of Civil Law of the PRC: Lts Birth, Characteristics, and Role, 52 L & CONTEMP. PROBS. 151, 152 (1989); Henry R. Zheng, China 's New Civil Law, 34 Am. J. COMP. L. 669, 669-70 (1986).

63 Chen, supra note 9, at 457; Hao Jiang, The Making ofa Civil Code in China: Promises andPerils ofa New Civil Law, 95 TUL. L. REV. 777, 784 (2021).

64 See Part II-4 (2).

65 Chen, supra note 9, at 459-60; MO ZHANG, CHINESE Contract Law: Theory and Practice 30 (2006).

66 Liu, supra note 55, at 211.

67 Qinhua He (ffJÜJ^) et al. eds., XIN Zhongguo Minfadian Caoan Zonglan: Shangjuan (§ff+? ü KM

^?M& 's&: il^r) [AN OVERVIEW OF THE DRAFTS OF ClVIL CODES IN THE NEW CHINA: VOLUME I] 179-80, 204, 247 (2003).

68 ld. at 179.

69 ld. at 204.

70 ld. at 247.

71 ld. at 180, 204, 247.

72 ld. at 250.

73 Zheng, supra note 62, at 670.

74 Chen, sM/?ra note 9, at 460.

75Huixing Liang 0&MM.), Zhongguo Dui Waiguo Minfa De Jishou (^UM^YUWk^i^Ê.^.)[Reception of Foreign Civil Laws in China] 26 Shandong Daxue Falv Pinglun (li|^K^v^:7i;f$isFi'è)[Shangdong Univ. L. Rev.] 1, 5 (2002); Chen, supra note 49, at 174.

76 Chen, supra note 49, at 174.

77 Liu, supra note 55, at 216.

78 ld.

79 Chen, supra note 9, at 461.

80 Qinhua He et al. eds., Xin Zhongguo Minfadian Caoan Zongland: H SSM

[AN OVERVIEW OF THE DRAFTS OF ClVIL CODES IN THE NEW CHINA: VOLUME II] 430, 484 (2003); see also Guangyu Fu, Zhongguo Minfadian Yu Budangdeli: Huigu Yu Qianzhan M: 0 ) [Chinese Civil Code and Unjustified Enrichment: Retrospect and Prospect], 1 HUADONG ZHENGFA Daxue Xuebao [Ecupl. I] 116,119 (2019).

81 He et al., supra note 80 at 556, 618.

82 The confiscation requirement also existed in the law of unjust enrichment in Russian Soviet Federated Socialist Republic [RSFSR] [Civil Code] art. 473; see Whitmore Gray & Raymond Stults, Civil Code of The Russian Soviet Federated Socialist Republic: An English Translation, 124 (1965); see also Jidong Chen (Ï^^W), LunMinfa Zongze Budangdeli Yiban Tiaokuan De Shezhi Moshi (iè "KS&JWJ" ^StfflHJtSlbf^iJiJtflït,) [General Clauses of Unjust Enrichment in the General Principles of Civil Code], 25 SHANGHAI JlAOTONG DAXUE Xuebao(ZhexueShehuiKexueBan) (±M3&temppound;.MX&tempyen;¥M (^^ïHH^fe) [J. OF SJTU (Philos. Soc. Sci.)] 59, 65 (2017).

83 Fu, supra note 80, at 20.

84 Zhang, supra note65, at 111.

85 Hui Zheng, General Part, in Chinese Civil Law 1 (Yanshi Bu ed., 2013); Hao Ran (#ic) & Lihong Du (tt Mêl), Xin Zhongguo Fazhi Licheng: Minfa 56 Nian (ff ^lïStnJSfS: Wli. 56^-) [The Way to Rule of Law in New China: A Review of Civil Law in the Past 56 Years], 4 NANJING DAXUE XUEBAO (ZHEXUE RENWEN KEXUE ShehuiKexueBan) (MMX^^Mi^Ë^.XX^^M'kk^fü) [ J.NanjingUniv. (Phil.,Hum., andSoc. Sci.)] 66, 68 (2005).

86Zhonghua Renmin Gongheguo Minfa Tongze ( "'t4^ A K^ïf P 03 KföiSJUlJ" ),General Principles of Civil Law of the People 's Republic of China (promulgated by the NPC Apr. 12, 1986, effective Jan. 1, 1987, repealed on Jan. 1,2021), http://www.npc.gov.cn/npc/cl773/cl848/c21114/c30514/c30517/201905/t20190521_264206.html.

87 Zhonghua Renmin Gongheguo Jingji Hetong Fa [Economie Contract Law] (promulgated by the Standing Comm. NatT People's Cong., Dec. 13, 1981, effective Jul. 1, 1982, expired Oct. 1, 1999), http://www.npc.gov.cn/wxzl/wxzl/2000- 12/06/content_4408.htm.

88 Zhonghua Renmin Gongheguo Hunyin Fa (^^AK^fP HM^Sfö) [Law on Marriage] (promulgated by the Standing Comm. NatT People's Cong., Sep. 10, 1980, effective Jan. 1, 1981, last amended Apr. 28, 2001) https://www.gov.cn/banshi/2005-05/25/content_847.htm.

89 Zhonghua Renmin Gongheguo Shewai Jinji Hetong Fa (4^AK^fP W^^t^êr^W-li) [Law on Foreign-Related Economie Contracts] (promulgated by the Standing Comm. NatT People's Cong., Mar. 21, 1985, effective Jul. 1, 1985, expired Oct. 1, 1999), http://www.law-lib.com/law/law_view.asp?id=46525.

90 Chen, supra note 49, at 291.

91 GPCL, art 92.

92 See Part II - 4 (2).

93 Zuigao Renmin Fayuan Guanyu Guanche Zhixing Zhonghua Renmin Gongheguo Minfa Tongze Ruogan Wenti DeYijian(SWxing)(^AK&K^^ftJJiMf "t^AK^PS K&MJ" ^Tf^É^M^ (W) ) [Opinions of the Suprème People's Court on Several Issues Concerning the Implementation of the General Principles of Civil Law of the People's Republic of China (For Trial Implementation)] (promulgated by the SPC Jan. 26, 1988, effective since the same date, expired on Jan. 1, 2021) https://www.cgf.cn/front/download/300744.pdf (China).

94Matart. 131. 95 ld.

96XianchuZhang, The New Round of Civil Law Codification in China, 1 UNIV. BOLOGNAL. REV. 106, 113 (2016); Chen, supra note 9, at 462. 97 Fu, supra note 80, at 120.

98 Lin, supra note 58, at 451.

99 ld.

100 See a detailed discussion of issues existing in the Chinese law of unjust enrichment at this stage, including scholars' dissatisfaction, in Lin, Unjust Enrichment, supra note 10, at 50-1; Huo Zhengxin (flÊS&Jtfc), Zhongguo Budangdeli Zhidu De GoujianYu Wanshan - Yi Bijiaofa Wei Shijiao [The Establishment and Improvement of the Chinese Law of Unjust Enrichment - A Comparative Law PerspectiveJ, 2 Qiu Shi (5) [Seeking Truth] 87 (2006); Chao Tang, Deguo Budangdelifa De Gouzao Yu Zhongguo Budangdelifa De Wanshan [The Structure of the German Law of Unjust Enrichment and the Perfection of the Chinese Law of Unjust Enrichment], 1 Beihang Falv Pinglun (JbJïDïfëfêif iè)[Beihang L. Rev.] 128 (2013); Yunhua Pan ($Hs%, £,ui Budangdeli Fanhuan Fanwei De Zai Sikao - Cong Budangdeli Zhidu De Jineng Shuoqi [Rethinking the Scope of Return of Unjust Enrichment: Starting from the Functionality of Unjust Enrichment], 4 TianjinFaxue at 25 (2012).

101 For a detailed analysis of the relationship between the Chinese law of unjust enrichment and other areas of private law and how other branches of law reverse benefits without a legal basis, see Lin, unjust enrichment, supra note 10, at ch 4.

102 Angran Gu Jftfp#& et al., Zhonghua rennin gongheguo minfa tongze) [Seminars on the General Principles of Civil Law of the People'sRepublic of China] 183 (2000).

103 Zhonghua Renmin Gongheguo Minfadian [Civil Code of the People's Republic of China] (promulgated by the NPC May 28, 2020, effective since Jan. 1, 2020), http://www.npc.gov.cn/npc/c2/c30834/202006/t20200602306457.html.

104 Guanyu Zhonghua Renmin Gongheguo Minfadian (Caoan) De Shuoming-2020 Nian 5 Yue 22 Ri Zai Di

105 See Lin, unjust enrichment, supra note 10, at 50-1.

106 Chinese Civil Code, arts. 986-87.

107 See Part III - 1.

108 See Part II - 4 (3) and Part III - 1.

109 See Part II -4 (3).

110 See Lin, Transplantation of Unjust Enrichment in China, supra note 10, at 48.

111 YongjunLi , "Zhunhetong" Gainian Zhiwai Yankao - Dui Wo GuoMinfadian Di 985 Tiao De Lilun Yu Shizheng Fenxi (RSA) % 985 ^ÖtlSliè-^^üE^^f) /O/i tóe Owfer Z/>w/Y o/Y/ze Concept of "Quasi Contract": A Theoretical andEmpirical Analysis of Article 985 of the Chinese Civil Code], 5 Zhengzhi Yu Falv ( [POLlTlCAL Sci. ANDL.] 80, 85 (2022); Chen Wang (ïft), Guanyu Zhonghua Renmin Gongheguo Minfadian (Caoan) De Shuoming Hj)[Explanations on the Draft of the Chinese Civil Code of the People's Republic of China], The National People's Congress of China, (May 22, 2020) http://www.npc.gov.en/npc////c2/c22774/202005/t20200523_306323.html.

112 Article 118 of the Chinese Civil Code states: "An obligatory right is the right-holder's right to claim against a particular debtor to conduct or not to conduct a particular act, triggered by contract, tort, negotiorum gestio, unjust enrichment, and miscellaneous other events providedby law." Zhonghua Renmin Gongheguo Minfa Dian (^^AK ^f P13 SSI) [Civil Code of the People's Republic of China] (promulgated by the Standing Comm. Nat'1 People's Cong., May 28, 2020, effective Jan. 1, 2021), art. 118, https://www.chinajusticeobserver.com/law/x/civil-code-of-china-part-i-general-principles-20200528.

113 These categories of justificatory ideas for unjust enrichment are proposed in Steve Hedley, Justice and Direction in the Law of Unjust Enrichment, 48 COMMONL. WORLDREV. 94, 95-97 (2019).

114 For proponents supporting the corrective justice justification, see supra note 4.

115 Aristotle, Nicomachean Ethics Book V25, (William David Ross trans., Batoche Books 1999).

116 Zoë Sinel, Corrective Justice in Unjust Enrichment, 31 OXF. J. LEG. STUD. 551, 553-54 (2011).

117 Emest J. Weinrib, The Gains andLosses of Corrective Justice, 44 DUKELAW J. 277, 277-78 (1994).

118 Smith, supra note 4, at 2141.

119 Gardner, supra note 4, at 9-10. For a discussion of the thin account of corrective justice, see Sinel, supra notelló, at 559-63.

120 Gardner, supra note 4, at 9-10.

121 See Sinel, supra note 116, at 560-63 (discussing the thick version of corrective justice).

122 ld. at 556-59.

123 Weinrib, Correctively Unjust Enrichment, supra note 4, at 45; Weinrib, The Normative Structure ofUnjust Enrichment, supra note 4, 35.

124 Weinrib, Correctively Unjust Enrichment, supra note 4, at 36.

125 Weinrib, The Normative Structure of Unjust Enrichment, supra note 4, at 43-44.

126 Mat 43.

127 Mat 44.

128 ld.

129 ld.

130 See Matthew Doyle, Corrective Justice and Unjust Enrichment, 62 U. Toronto L. J. 229, 231 (2012); Sinel, supra note 116, at 556-559; Hedley, supra note 113, at 96; Robert Chambers et al., Philosophical Foundations of the L. of Unjust Enrichment at 3-27 (Oxford University Press 2009); Tatiana Cutts, Unjust Enrichment: What We Owe to Each Other, 41 Ox. J. LEGAL STUD. 114, 124 (2020).

131 Weinrib, The Normative Structure of Unjust Enrichment, supra note 4, at 44.

132 Doyle, supra note 130, at 243-44; Sinel, supra note 116, at 557-59.

133 See XuejunHong, Budangdelizhiduyanjiu: yizhongxitongde jiegou, gongnenglilu [Research on the Institution of unjust enrichment:

DISCUSSION ON A SYSTEMATIC FRAMEWORK AND FUNCTION] 67 (2004); Minyi Ye (Bf ^5'ïn), Budangdeli Fa De Xiboerte Wenti [Hilbert's Problems in the Law of UnjustEnrichment], 34 Zhong Wai Faxue (4^F&^) [Peking Univ. L. I] 944, 956 (2022).

134 ld.

135 See Part III-land 2.

136 Dagan, Restitution and Relationships supra note 5. U1M. atl037.

138 Hanoch Dagan, The Law and Ethics of Restitution 30 (Cambridge Univ. Press 2004).

139 Mat 42.

140 Mat 44.

141 Dagan, Restitution andRelationships, supra note 5, at 1048.

142 Hedley, supra note 113, at 97.

143 Chambers et al., supra note 119, at 5.

144 See supra note 6.

145 McBride & McGrath, supra note 6, at 36-37; Webb, Unjust Enrichment andDefective Transfers, supra note 6, at 345, 366.

146 Webb, Unjust Enrichment and Defective Transfers, supra note 6, at 366.

147 ld. at 353, 366.

148 ld.

149 See Dagan, supra note 138, at 20-21; Jack Beatson, The Use andAbuse of Unjust Enrichment: Essays on the Law ofRestitution 208 (Clarendon Press, 1991).

150 Dagan, supra note 138, at 20.

151 See ZhonghuaRenminGongheguo MinfaDian(4^A&^fP ü &&&) [Civil Code of the People'sRepublic of China] (promulgated by the Standing Comm. Nat'1 People's Cong., May 28, 2020, effective Jan. 1, 2021), art. 118 [hereinafter Chinese Civil Code].

152 In respect of the transfer of property ownership, legal systems can be categorized into two types: causal and abstract. Under the principle of abstraction, the validity of a transfer of ownership does not depend on a valid legal basis, contractual or otherwise. In contrast, the validity of a transfer of ownership in a causal system depends on the existence of a valid legal basis. See Birke Hacker, Causality and Abstraction in the Common Law in Exploring Private Law 201-02 (Elise Bant & Matthew Harding eds., 2010) (providing a more detailed discussion on the matter). Whether Chinese law adopts the principles of abstraction or causality in regard to the transfer of property ownership is unanswerable based on the Chinese Civil Code or other legal doctrines. However, the position held by Chinese courts is pro-causal, denying the principle of abstraction, which can be inferred from judgments found in mainstream databases in the PRC. See Zhicheng Wu & Lei Chen, Revisiting Property Transfer Theory: English Law and Chinese Law Compared, 43 LEG. STUD. 259, 272-73 (2023).

153 Chinese Civil Code, art. 147.

154 Lin, unjust enrichment, supra note 10, at 133-35.

155 M at 250-51.

156 See Part III-3.

157 See Part II above.

158 ld.

159 Liu, supra note 9, at 480-83.

160 Robin Stanley Snell, et al., Junzi Virtues: A Confucian Foundation for Harmony Within Organizations, 11 AsiAN J. Bus. Ethics 183, 184 (2022); Yao, supra note 7, at 215.

161 Yao, supra note 7, at 215.

162 Sangang Wüchang, Three Fundamental Bonds and Five Constant Virtues, 5 BERKSHIRE ENCYCLOPEDIA OF CHINA 2252, 2252 (2009).

163 Snell, supra note 160, at 184.

164 Analects of Confucius, bk. XI, ch. 22 [hereinafter Analects].

165 Jiang & Ma, supra note 26, at 289.

166 Antonio S. Cua, Virtues ofJunzi, 34 J. CfflN. PfflLOS. 125, 134 (2007).

167 Analects, supra note 164 , atbk. IV, ch. XVI.

168 Rong Chen, Chinese Politeness: Diachrony, Variation and Universals in POLITENESS THEORY 1, 23 (Cambridge Univ. Press 2023).

169 Analects, supra note 164 , at bk. XIV, ch. XIII.

170 Jing-Bao Nie & David Gareth Jones, Confucian Ethics on the Commercial Use ofHuman Bodies and Body Parts: Yi (Righteousness) or/andLi (Profit)?, 12ANATOMY SCI. EDUC. 444, 448-49 (2019).

171 Yao, supra note 7, at 275.

172 Luney, supra note 24, at 130.

173 For a discussion of features of harmony in Confucianism, see Xiaohong Wei & Qingyuan Li, The Confucian Value of Harmony and its Influence on Chinese Social Interaction, 9 Cross-Cultural Comm'n. 60, 62 (2013).

174Xidan Sun (##_&), Liji Jijie (?liBitff) [Annotated Book of Rites] 581-83 (Xiaohuan Shen 0MM) & Xingxian Wang (zE Jt Ï3") eds., 1989). For translation, see Liu, supra note 9, at 479. The translation is revised by the author based on her own understanding.

175 Chen, supra note 168, at 26.

176 Ma, supra note 15, at 668.

177 ld.

178 Xiangjun Li & Yan Xin, Art Explanation of the Confucian Idea ofDifferertce, 2 FRONT. PHILOS. CHINA 488, 490 (2007).

179 Tiziana Lippiello, A Confucian Adage for Life: Empathy (Shu) in the Analects IN LlGHT A CANDLE: Encounters andFriendship with China 1, 71-2 (RomanMalek & Gianni Criveller, eds., 2010); Philip J. Ivanhoe, Reweaving the "One Thread" of the Analects, 40 PHILOS. EAST WEST 17, 17-18 (1990); Yu-Lan Fung, A SHORT History of Chinese Philosopgy (Derk Bode trans.) 1, 43-44 (1953).

iso fung, supra note 179, at 43.

181 Analects, supra note 164, at bk. XII, ch. II. This passage says: "When Chung Kung asked about benevolence (ren), the master said: '... Do not do to others what you do not wish them to do to you...'"

182 Lippiello, supra note 179, at 74-75. 183SeePartIV-l.

184 Emest J. Weinrib, Corrective Justice in a Nutshell, 52 U. TOR L. J 349, 349-50, 353 (2002).

185 Mat 351.

lmId.

187 Liu, supra note 9, at 515-16.

188 Li & Xin, supra note 178, at 490-91.

189 See Hui Jin, A Complex Confucian Conception ofDistributive Justice, 51 PHILOSOPHIA 743 (2023) (offering a detailed discussion of aConfucian conception of distributivejustice); see also Jiang, supra note 26, at 388.

190 Jin, supra note 189, 754; Jiang, supra note 26, at 388.

191 Jin, supra note 189, at 754.

192 Mat 745.

193 Jiang, supra note 26, at 388-89.

194 ld.

195 ld.

196 See Part IV-1.

197 Chinese Civil Code, art. 122; See Part III - 1.

198 See Part III-2.

199 See Part II - 1 and Part V - 1 (1).

200 See Part II-1.

201 See Part II-3.

202 See Part III-1.

203 Chinese Civil Code, art. 985. See a detailed account in Part III - 1.

204 Chinese Civil Code, art. 986. See a detailed account in Part III - 2.