Contract Remedies: Restitution (Quasi-Contract)

Question 1

What is the basis of “restitution” (or quasi-contract)?

Answer 1

Law imposes an obligation to pay for unjust gain pursuant to unenforceable K

Question 2

What are the general grounds for unjust enrichment remedy?

Answer 2

Usually due to unenforceable K due to:

• mistake
• fraud
• material breach of k
• performance of an unenforceable K

Contract may be unenforceable BC:

• It is illegal;
• violates SOF
• discharged by impossibility or frustration of purpose
• disaffirmed due to incapacity

Question 3

With regards to restitution, what is the measure of the benefit if the contract is materially breached?

Answer 3

Non-breaching party –> can recover VALUE of performance (even if above contract rate)

Breaching party –> can recover VALUE of benefit conferred LESS other party’s damages

Question 4

With regards to restitution, what is the measure of the benefit if the contract is unenforceable?

Answer 4

If K is unenforceable –> recovery depends on the nature of the benefit conferred

If tangible property –> specific recovery may be available

If goods/services —> P is entitled to value thereof, even in excess of K price
EXCEPTION –> If K is unenforceable due to impossibility, contract rate is maximum