Restitution

Question 1

What is restitution?

Answer 1

§ 370: A party may recover restitution damages even if there is no enforceable contract if the other party was unjustly enriched. Separate from a contract.
* Damages are typically determined by the price of the benefit conferred
* If benefit-conferred test doesn’t work, the court will use the fair-market price for damages (TVA)

Question 2

What is a contract implied in law?

Answer 2

• Not actually a contract: based on social circumstances; despite the lack of an express agreement between parties, the intention of the parties as expressed by their actions was to bargain
• Elements: 1. Conferral of a benefit not bargained for AND 2. The benefit is appreciated/accepted by the recipient AND 3. The beneficiary will be unjustly enriched if they don’t compensate the person who conferred the benefit
• Restitution Damages: Determined by the price of the benefit conferred

Question 3

What is a contract implied in fact?

Answer 3

• An actual contract not arranged in words but inferred from social circumstances – a tacit agreement. The intention as expressed by their action was to bargain.
• Example: Going to a dry cleaner, not signing a contract and knowing you’ll get your shirts back without having to sue
• Restitution Damages: Fair market price or, if too difficult to calculate, reasonable value of the services

Question 4

What are case illustrations of restitution?

Answer 4

• Campbell v. TVA: Microfilmer was hired by an employee of a library to microfilm journals. Employee had no right to enter into an express contract so it was an invalid agreement. Campbell sued that it was a contract implied in law. The court granted him the reasonable value of his services. (Johnson thinks this should be reliance damages, and the reason why the court didn’t apply benefit conferred was because it would be too unfair, it would be close to 0 because no one looked at the film)
• Bailey v. West: No restitution because the benefit was not accepted. West bought a horse but returns it after he finds out its lame. Seller refuses the return of the horse and Bailey boards it even though he knows there’s an ownership dispute. He sends seller a bill which seller refuses. Bailey continues to care for horse for four years and then sued West for contract implied in law. Court held that there is no CIL or CIF because the benefit conferred was not accepted (Johnson: key issue is that there was an opportunity for Bailey to contract with West, but it was not accepted).