Restitution

Question 1

What is Restitution?

Answer 1

A doctrine that provides a party with a recovery even when no contract exists due to the concept of unjust enrichment. (A party has been enriched by receiving a benefit and it would be unjust for that party to keep the benefit without paying for it.)

Question 2

What are the two types of Restitution?

Answer 2

1. Quasi-Contract/Implied in Law: provides recovery for a plaintiff when no contract exists provided that the plaintiff conferred a benefit on the defendant and it would be unjust for the defendant to keep the benefit given the circumstances. Quasi-contract does not require a promise, but a promise does not preclude restitution.
2. Promissory Restitution: supports the enforcement of a promise based on past consideration or moral obligation.

Question 3

What are three causes of action that can be taken through Restitution?

Answer 3

Promise with Consideration: Establishes the enforceability of the promise as a contract. Requires a bargain, aka, an exchange.

Promissory Estoppel: acts as an alternative when there is no bargain but a party relies to their detriment on a promise.

Restitution: applied as another alternative when one party is unjustly enriched at the expense of another.

Question 4

What is the difference between Implied in Fact and Implied in Law?

Answer 4

Another difficulty in studying restitution is that courts sometimes do not accurately distinguish between an actual contract that is implied in fact and a restitutionary recovery that is an implied in law contract.

Implied in Fact: A contract implied in fact is where there is no express contract, but the conduct of the parties makes it clear they both understood they had a deal. (raising hand for another drink at a bar)

Implied in Law: A contract implied in law is where there is no contract per se, but at least one party still had a legal duty to perform.

Question 5

What is the rule for a Quasi-Contract/Implied in Law regarding when a court may order restitution?

Answer 5

A court may order restitution if:
(1) the plaintiff has conferred a benefit on defendant;
(2) the defendant has knowledge or appreciation of the benefit;
(3) the defendant has accepted or retained the benefit conferred;
(4) the circumstances are such that it would be inequitable for the defendant to retain the benefit without paying fair value for it

Restitution is not available if: (a) a party officiously confers a benefit
upon another, or (b) a party has conferred a gratuitous benefit without
expectation of compensation.

Question 6

What are the limits to the Quasi-Contract/Implied in Law?

Answer 6

Officious Intermeddler (Volunteer) Doctrine: “A person who
officiously confers a benefit upon another is not entitled to restitution.”
A person is deemed an officious intermeddler if the “interference in the
affairs of others is not justified by the circumstances.”

Gratuitous Benefits (Gifts) Rule: A gift that has already been given
without the expectation of compensation may not be withdrawn.

Question 7

What is Promissory Restitution?

Answer 7

1) A promise made in recognition of a benefit previously received by the promisor from the promisee is binding to the extent necessary to prevent injustice.
(2) A promise is not binding under Subsec. (1)
(a) if the promisee conferred the benefit as a gift or for other reasons
the promisor has not been unjustly enriched; or
(b) to the extent that its value is disproportionate to the benefit.”
- Restatement (Second) of Contracts §86

Relevant Considerations:
1. The definite and substantial character of the benefit received
2. Formality in the making of the promise
3. Part performance of the promise,
4. Reliance on the promise or the probability of such reliance.