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Steve Hedley
Thu, 18 Dec 1997 15:43:48
failed contracts and restitution


At 09:03 18/12/97 -0500, Allan Axelrod wrote:

your note confirms my nervousness about participating in this group upon which i have stumbled and in which i seem to be the only american participant

Don't worry, we don't bite!

I do not imagine that I am the right person to speak for restitution lawyers generally, but will try to give a general answer. No doubt I will be corrected if I fail to give a fair statement of the position.

I do not think we are that far apart from the american scholarship, but the situation is not quite the same.

i am surprised at your suggestions that i am using 'restitution' unconventionally

You must realise that there is a lot of recent history here, and that not only is restitution a controversial area, but so is contract. The controversy in contract is more low-level, but disputes as to the one tend to involve the other.

In particular, some say that unjust enrichment is of growing importance throughout the whole of the law (Atiyah, for example), whereas others would confine it largely to a distinct area in itself

In other words, a very innovative attitude (pro-unjust enrichment) towards in restitution tends to go along with a rather traditional (anti-unjust enrichment attitude) to contract.

A further complicating factor is the continued existence of equity as a distinct branch of the law - though again, precisely *how* distinct is a matter of opinion.

i have learned three principal categories of situations calling for civil money judgments---tort, breach of contract, and unjust enrichment

That is a proposition that is now familiar to people on this list, but the reference to unjust enrichment renders it controversial to lawyers in general. It would be uncontroversial to say that there is much in private law that does not concern either torts or contracts, but it is another matter whether this non-tort, non-contract subject matter can be regarded as a distinct third area of similar coherence.

Hence, when you said that

this could represent a pragmatic judgment that failed-contract cases have more in common with mistake cases than they do with those involving breach, and that the commonality bears examination

you appear to English eyes to be stepping in on one side of the argument rather than the other - which is why someone on the other side asks for your justification. The issue is indeed precisely whether the commonality bears examination.

one of our leading cases---last century----involved an employee who was to have been paid at the end of a one-year employment contract, but who materially breached after seven months work the decision was highly controversial but the employee was awarded a quantum meruit and we were taught that these plaintiff-in breach cases used a restitutionary measure of compensation in that the recovery was not based on the contract wage rate

That very example has been the subject of much controversy in this jurisdiction, particularly over what the measure should be. Whether the contract rate or some other rate is appropriate is an open question, on which there is no lack of opinions.


Steve Hedley

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Christ's College Cambridge CB2 3BU

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