How To Collect Mistaken Payments

What happens when an individual or organization makes a payment to another party by a mistake and expects repayment for services not rendered. This classic case of debt collection is termed Condicto Indebiti in the legal world, and certain requirements have to be met in order for a plaintiff to hold a defendant responsible for paying back money for services not rendered.

Mistaken Payment

When a payment is made by mistake to an organization or individual the process that happens most often is a form of unofficial mediation whereby the party who has made the mistaken payment approaches the payee. Often, and when providing evidence of a mistake, the payee will likely return the money to the benefactor. However, what happens when the payee refuses to make a repayment?

Condictio Indebiti

A case of condictio indebiti debt collection is different from a normal case of debt collection. Debt collection follows when somebody has rendered a product or service and has not received payment. With the case of a mistaken payment, the debt collection process (in the event that the defendant in a litigated case is not willing to repay) needs to be carried out when certain requirements are met. These requirements are:

  • That the defendant has received a particular amount of money
  • That the plaintiff has paid that particular amount of money
  • That there is an adverse effect of causality between the two parties (the defendant benefits where the plaintiff suffers)
  • The payment has to have been made by a mistake or without an actual legal reason for payment
  • And lastly, that the error on the part of the plaintiff was excusable

When all of the above conditions have been met, and there is no way in which common law for particular cases has been challenged, the payee (defendant)  is responsible for paying back monies owed.

Although not a case of debt collection, the similarities between cases of debt collection and condictio indebiti often mean that debt collection attorneys are more than experienced enough to assist clients in this regard.

JA Attorneys are specialist debt collection lawyers in Johannesburg. Contact us today.