Thanks, Rob and Katy. This is very helpful. Restitution is treated as marginal in much of the US legal academy in part on the theory that it's not freestanding. This case would be spun that way- as either K or T with restitution being at most relevant to damages. I'd like for there to be a freestanding law of restitution so I'm happy that this is just a poor case for that point.

My contract colleague here tells me no K damages in the US. I don't know enough to say. There are facts- apparently not present in this case- which would create tort liability for misrepresentation in the US. The cleanest facts would establish no contract at all (i.e., no loan) but for the misrepresentation that security would be provided. I think we probably would conceptualize damages as wrongful gain.

Sent from my iPhone

On Mar 7, 2011, at 11:40 PM, "Robert Stevens" <robert.stevens@ucl.ac.uk> wrote:

>
>
> Smith v. Landstar Properties Inc is a very nice illustration of the fact
> that damages for breach of contract are not confined to compensating for
> consequential loss.
>
> If I buy Grade A apples for making into juice, if the apples I am sold are
> Grade B I am entitled to the difference in value between Grade A and Grade
> B apples. It does not matter that Grade B apples are perfectly good fr my
> purposes so that I suffer no loss, nor does it matter that the seller
> makes no gain from his breach. Damages, in the first instance, are awarded
> to vindicate my right to contractual performance, not to compensate for
> consequential loss. I am entitled to the difference in value between what
> I got and what I was promised and the absence of consequential loss is
> irrelevant. For a SCC which stands for this proposition, see Bainton v
> John Hallam Ltd [1920] 60 SCR 325, 54 DLR 537.
>
> This principle is not confined to contracts for the sale of goods but
> applies to all contracts. We can lose sight of this principle because
> usually the consequential loss which is suffered as a result of breach is
> greater than the difference in value between what was promised and what
> was received, and the plaintiff understandably wants the greater sum.
>
> So, just as with the sale of apples, the appropriate measure in this case
> is the difference in value between what the claimant was promised and what
> he got assessed at time of breach. Here that was easy to assess: you just
> look to the market difference between a secured and an unsecured loan.
>
> Finch CJ's exposition of this principle ([44]) is exemplary.
>
> "Damages on the basis of an interest rate differential merely compensate the
> plaintiff for the way in which the contract was actually performed, which
> resulted from the defendant’s breach. The interest rate differential
> between secured and unsecured loans was an appropriate measure of damages
> in this case. It is based on the commercial value of the right infringed
> and assesses the sum payable by reference to the interest rate that might
> have been payable between willing parties."
>
> For something by me which tries to explain at length why this result is
> plainly right, see here
>
> http://denning.law.ox.ac.uk/news/events_files/A_Golden_Victory_or_Not.pdf
>
>
> As Finch CJ also makes clear, this case has nothing to do with restitution
> for wrongs. I would also agree with Katy that the claim in tort for
> negligent misrepresentation is doing no work in this case. No loss
> consequent upon the misrepresntation was pleaded or proven as far as I can
> see.
>
> I can't let Professor Keating's suggestion that unjust enrichment really
> is not a freestanding basis of liability go unchallenged. Certainly there
> are some cases where the cause of action which gives rise to a claim for a
> gain is a wrong. However, there are many cases where this is not so, the
> recovery of mistaken payments is the easiest case. This case, however, was
> nothing to do with unjust enrichment as a freestanding basis of liability.
> Rob
>
> --
> Robert Stevens
> Professor of Commercial Law
> University College London
>