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RDG
online Restitution Discussion Group Archives |
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The right to recover gains derived from breach of contract
is part of a long process of expanding the protection granted to contractual
rights and that of narrowing the gap between property and contractual
rights. Earlier stages in this development include the possibility of
transferring (assigning) contractual rights and their protection against
third parties (Lumley v. Gye). This process reflects the importance of
contractual rights and is therefore likely to continue.
The great diversity of contractual rights makes generalization
difficult. The relevant factors regarding the question whether to allow
restitution of gains derived from the breach include: 1) the nature and
importance of the plaintiff's right; 2) the reprehensibility of the defendant's
conduct; 3) the question whether the defendant sold to a third party the
very performance that he promised to the plaintiff (contrast the following
cases: a) A an opera singer undertakes to perform in B's opera house but
in breach of the contract accepts a better offer from C to sing in a competing
opera house; b) A who is employed by B as a clerk, accepts a much better
offer to act in a film produced by C) and 4) the nature of the defendant's
contribution to the gain and its social utility (in Esso
Petroleum v. Niad it seems to have consisted simply of charging higher
prices).
Finally, restitution does not necessarily mean recovery
of all gains made by the defendant. The factors enumerated above are relevant
also to the measure of recovery. Where the defendant made a substantial
contribution, to which the plaintiff was not entitled, it is conceivable
that the plaintiff will only recover the value of that which was taken
from him or that profits will be apportioned (cf. Sheldon v. MGM Pictures)
or that the defendant will receive quantum meruit for his contribution
(cf. Boardman v. Phipps).
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