Restitution Flashcards
What is restitution?
Restitution arises in connection with unjust enrichment. Restitution requires that the defendant who was unjustly enriched to disgorge his ill-gotten gains.
Restitution may be either a remedy or a liability.
What are unjust enrichment requirements?
Plaintiff must prove:
- The defendant received a benefit;
- At the plaintiff’s expense; and
- Under circumstances that would make it unjust for the defendant to retain the benefit without commensurate compensation.
Measuring Restitution
Amount of ill-gotten gains defendant should disgorge depends on the degree of harm.
Rely on MRPRUDe.
Typically restitution is measured by either :
- Quantum Meruit
an implied in law contract, where the court allows plaintiff to recover value of services performed or rendered from the defendant.
you are recovering the FMV of services rendered NOT gain/value of benefit to D.
OR
- Recover the actual profits the D made based on Plaintiff’s benefit conferred.
EXTENT OF RECOVERY IS BASED IN-PART ON WHETHER DEFENDANT KNEW WHAT THEY WERE DOING.
What devices can be used to remedy unjust enrichment?
- Quasi-contracts
aka, constructive trusts - Recission
going backwards - Reformation
going forwards
What are types of quasi contracts?
Quasi-contracts aka constructive trusts is a contract that is implied by the judiciary when there was no actual contract. A quasi-contract can be either:
- Implied in Fact
This contract is premised on the behavior of the parties. The remedy under these contracts is expectancy damages, not unjust enrichment. - Implied in Law
No actual contract created, rather, court creates a contract cased on D’s gains or FMV of services rendered.
What is recission and its requirements?
This remedy places the parties back in their original position before the contract was made. Gets rid of the contract. CONTRACT IS DEFECTIVE DUE TO SOME MISTAKE ABOUT THE WORLD.
Requirements, the plaintiff must prove:
- Fraud;
- Substantial breach;
- Mistake;
Mutual mistake of material fact OR unilateral mistake known to other side - Duress; or
- Prove a defense
Laches, unclean hands, etc.
What is reformation and its requirements?
Reformation is rewriting the contract to conform to the original understanding. CONTRACT IS DEFECTIVE DUE TO A TRANSCRIPTION ERROR.
Requirements are:
1. A valid original K; and
2. A mistake in writing, “scrivener’s error.”
Outcome:
1. REFORMING the original K and
2. Returning any unjust enrichment.
What is equitable restitution?
Defendant holds something specifically belonging to the plaintiff that must be returned.
There are three types:
- Constructive trust
- Equitable Lien
- Accounting for Profits
What is a const. trust?
Fictional trusts implied by law to prevent unjust enrichment. Used when the property is unique or D is insolvent. Generally, requires D to be a conscious wrongdoer.
Requirements:
1. D commits wrongful act;
2. D must have legal title to convey property;
3. There is an inadequate legal remedy; and
4. Specific property has been acquired by wrongdoer that property can be traced to wrongful behavior.
THE PROPERTY MUST BE SOLELY TRACEABLE.
These are similar to equitable liens, however, equitable liens do not require that the property be solely traceable.
Lowest intermediary rule
D stole $100, placed it into his account, he then withdrew $50. Plaintiff can only get $50 because $50 is the lowest intermediary.
BFPs
For equitable liens, a BFP will prevail over the Plaintiff. However, the plaintiff will prevail over UNSECURED CREDITORS.
A BFP is someone who:
1. took for value; and
2. without notice of the facts (i.e., they did not know the property was stolen).
BFPs
For equitable liens, a BFP will prevail over the Plaintiff. However, the plaintiff will prevail over UNSECURED CREDITORS.
A BFP is someone who:
1. took for value; and
2. without notice of the facts (i.e., they did not know the property was stolen).
