Legal Question in Business Law in California
if a company makes a mistake and pays you more money than what you signed off on, can that company make you reimburse them the difference?
4 Answers from Attorneys
Ordinarily, yes. I can imagine circumstances in which it couldn't, but they're unusual.
The general rule regarding legal duty to reimburse unintentional overpayments is as follows: The party receiving an overpayment has a legal duty to refund the excess amount to the paying party UNLESS two things are true: (1) neither party was aware, nor should have been aware, at the time of the overpayment, that it was indeed an overpayment; and (2) the party who received the overpayment has materially changed his/her/its position in justified reliance upon his/her/its belief that the payment was correct.
Unless both conditions are met, the overpayment should be returned. A "material change in position" doesn't mean you just took the payment and deposited it in your checking account. A material change in position would be something like using the money to pay your creditors AND not having ample other sources of money to replenish your wallet.
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