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A

Restit dams are based on BENEFIT CONFERRED

B

When awarded?

1

Unenforceable K or no K (ct seeks to avoid UNJUST ENRICHMENT)

a

Exs: K unenforceable b/c of S/F, impossibility, mutual mistake, etc

2

Material breach of K

C

DISGORGEMENT may be ordered when there was a K.  This is just a type of restitution

D

Req’ts to recover for unjust enrichment:

1

INTENT to charge for benefit (no volunteers)

2

NO IMPOSITION of benefit (no officious intermeddlers)

II

Details

A

Defendant’s breach

1

P only gets restit where D’s breach goes to the “essence” of the K.  Ex: total non-perf.  (Osteen)

2

How much does P get back?

a

Depends on extent of non-perf by D: if D has made part perf, P only entitled to restit for remaining perf.  (Osteen)

b

P must, of course, return to D anything D gave him (or deduct it from dams)

c

TWO WAYS to measure benefit conferred:  (Rest § 370)

i

Quantum meruit (preferred measure)

ii

Net econ gain to D.  (Rest. § 371)

iii

— BUT if P has FULLY PERFORMED, he is limited to K price as dams.  (You can’t suddenly get FMV)

d

Quantum meruit = FMV of P’s services.  (Rest. § 371) (Algernon)

e

Net econ gain to D

i

Two choices here: subjective and objective

ii

Exs of subjective v. objective:

1

A builds a patio on B’s house.  A’s labor and materials are worth $1000.  Patio adds $400 in value to B’s house.  B hates sitting outside, so place $0 value on patio

2

Mkt value = $1000.  Objective gain = $400.  Subjective gain = $0

f

When will ct choose net econ gain over QM?

i

See E&E § 9.6

ii

Typically, if D behaved badly, ct will want to strip him of his gain — thus, net econ gain measure

3

Restatement exs:

a

A contracts to sell B a machine for $100k.  After A has spent $40k building mach, B repudiates.  A cannot get restit of the $40k b/c no benefit conferred on B

b

A promises B to render personal svcs to C in return for B’s promise to educate B’s kids.  A renders part of the svcs, then B repudiates.  A can get restit from B for the svcs even though they weren’t rendered to B, b/c they conferred a benefit on B

B

Plaintiff’s breach

1

Note that if P has substantially performed, but is in breach, P may sue ON THE K.  Restit not necy.  But if P is in material breach, may not sue on K — must sue in restit

2

Where seller withholds delivery of goods b/c of buyer’s breach:  (UCC § 2-718)

a

Buyer is entitled to restit:

i

Of excess of his payments over liq damages in contract (subject to r’bleness of liq dams)

ii

OR, in absence of liq dams claus, excess of his payments over 20% of value of K price OR $500, whichever is smaller

III

Disgorgement.  (Naval Institute)

A

Ct can make D return misbegotten profits — disgorgement

1

Ex: Manager of printing plant uses plant on weekend for his own benefit.  He causes no wear and tear on machines, but unjustly enriches himself

B

When is disgorgement used in contract?

26

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