Restitution

Question 1

Restitution - Basic Concept

Answer 1

• based on preventing unjust enrichment when one has conferred a benefit on another without gratuitous intent
• can provide remedy not only for breach, but also where K is unenforceable, + sometimes when no contractual relationship exists

Question 2

Terminology

Answer 2

• action to recover restitutionary damages is often referred to as an action implied in law K, an action in quasi-K, or an action for quantum meruit

Question 3

Restitution - Measure

Answer 3

• generally the value of the benefit conferred
  -> usually based on benefit received by def
  -> but may be measured by “detriment” suffered by pl (ex: reasonable value of work performed/services rendered) if benefits difficult to measure

Question 4

Restitution - When K Breached

Answer 4

• nonbreaching party may choose to cancel K if they haven’t fully performed -> can sue for restitution to prevent unjust enrichment
• if pl has fully performed though, they’re limited to damages under K
  -> may be less than they would’ve received in restitution, since restitution not limited to K price

Question 5

“Losing” Ks

Answer 5

• restitution often desirable remedy on a “losing” k (one in which actual value of services/goods is higher than k price)
  -> b/c normal k expectation damages/reliance would be for lesser amount

Question 6

Breach by Pl

Answer 6

• in sme circs, pl can seek restitution even though pl breached
• if breach was intentional, some cts won’t grant restitution
• BUT modern cts will permit restitutionary recovery but limit it to K price less damages incurred as result of breach

Question 7

Breach by Buyer - Restitution of Advance Payments or Deposit

Answer 7

• if buyer has paid part of purchase price in advance + breaches K, can usually recover some payments
• unless seller can prove greater damages, buyer can keep advance payments totaling 20% of purchase price or $500, whichever less
• balance must be returned to buyer
• if there’s a valid liquidated damages k, seller need refund only excess of buyer’s payments over amount of liquidated damages

Question 8

Restitution - When K Unenforceable

Answer 8

• restitution may be available in quasi K when K made but unenforceable + unjust enrichment otherwise would result
  -> ex: one irreplaceable party paid prior to perf, but then dies

Question 9

Restitution - When No K Involved

Answer 9

• quasi-K action

May be available if:
- pl has conferred benefit on def by rendering services or expending properties
- pl conferred the benefit w/ reasonable expectation of being compensated for its value
- def knew or had reason to knew of pl’s expectation AND
- def would be unjustly enriched if they were allowed to retain benefit w/o compensating pl