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Steve Hedley
Thu, 18 Dec 1997 19:27:01
failed contracts and restitution


At 12:25 18/12/97 -0500, Allan Alexrod wrote:

we have a clump of cases [ranging widely again from mistake through defective contract situations such as duress or plaintiff-in-breach] where the measure of recovery is defendant's gain: i at least learned to call this 'restitution'

But of course this is not a simple classification by measure, because most restitution measures are equivocal, eg :

If P pays over a sum to D and the law allows recovery back, the measure itself could equally be described as "P's loss" or as "D's gain".

If D uses P's property and is made to pay the market rate for so doing, this could be described as "P's loss" or as "D's gain" or as "P's expectation" - and each of those positions has its supporters in the literature.

This is why the enquiry has to be broader, and take in other matters in deciding which description is better.

There are of course a few anomalous remedies which cannot convincingly be seen other than as measures of gain - I am thinking of actions to remove profits from defaulting fiduciaries and so on - but a law of restitution founded principally on obscure instances of that sort would be a very poor thing.

and why not this last classifying word? you say because the several cases don't have enough in common to require or legitimate a label,

Precisely. That is the core of it.

and so you want to squeeze the cases in what i have called the third category back into the other two, which then will no longer be differentiated by type of remedy but by some other idea

Well, that is a side-issue. Certainly I would put them into one of the earlier classifications if they fairly fit; so should you.

why deprive the world of a taxonomy of law-suits classified by remedy measure? remedy measure is certainly important in practice and for clients etc etc

Nobody is trying to deprive anybody of anything; the question is simply, What is the most convenient description.

As to the "contract price vs. quantum meruit" problem,

with respect that seems to me to be quite irrelevant to our discussion: if the law prescribes a contract measure then i promise not to call it a restitution case and if you accept that there is a category 'unjust enrichment' and a measure 'restitution' i promise that my sense of what is or is not 'unjust' will not be influenced by the existence of the named category

But either measure can happily be described as contractual or as unjust enrichment, as we please. The work is plainly being done for reward, and so some sort of expectation measure is appropriate; there may be an issue as to whether the parties' earlier agreement can still be relevant ("contract") or whether we should refer to typical market wage rates ("quantum meruit"), but that doesn't change the nature of the problem.

For that matter, either measure could be described as a measure of benefit, the problem then being as to the value to be put on the benefit.

I would myself think "expectation" a better description than "benefit", in both cases. But that is secondary. The main point is that the remedies are rather similar, and the idea that the first case concerns "the worker's expectation" whereas the second concerns "the employer's gain" quite unconvincing. It is like saying that one glass is half full, whereas another is quite different because it is half empty.


Steve Hedley

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