Restatment of Contracts (2d) Restitution When Other Party in Breach

Restatement of Contracts (Second)

• 373 Restitution When Other Party Is in Breach

Note: The current position of the American Law Institute concerning “restitution” as a remedy for breach of contract is set forth in Restatement Third, Restitution and Unjust Enrichment (R3RUE), formally adopted in 2010 and published in 2011. Contract remedies treated in the new Restatement include rescission for material breach (R3RUE §§ 37, 54) and damages to protect both the “reliance interest” and the “restitution interest” (R3RUE § 38), as well as a potential liability in unjust enrichment to disgorge the profits of an “opportunistic” breach of contract (R3RUE § 39).

(1) Subject to the rule stated in Subsection (2), on a breach by non-performance that gives rise to a claim for damages for total breach or on a repudiation, the injured party is entitled to restitution for any benefit that he has conferred on the other party by way of part performance or reliance.

(2) The injured party has no right to restitution if he has performed all of his duties under the contract and no performance by the other party remains due other than payment of a definite sum of money for that performance.