Restitution as an Alternative to Damages in Contract and Tort
| Author | John D. McCamus |
| Pages | 123-151 |
Restitution
as an
Alternative
to
Damages
in
Contract
and
Tort
John
D.
McCamus
*i
A.
INTRODUCTION
The
availability
of
restitutionary
relief
as an
alternative
to the
claim
for
damages
in the
context
of
breach
of
contract
and
tortious
wrongdoing,
though
not as
widely understood within
the
profession
as it
might
be,
constitutes
a
potentially very important weapon
in the
litigator's remed-
ial
arsenal.
The
principal objective
of
this paper, then,
is to
familiarize
the
reader with some basic ideas about
the law of
restitution and, more
particularly,
the
restitutionary remedies available
for
breach
of
contrac-
tual
and
tortious duties. More particularly still,
the
objective
is to
focus
attention
on
remedies,
often
now
referred
to as
relief
in the
"disgorge-
ment"
measure, which have been available
in the
context
of
tort
law
and,
indeed,
in the
context
of
other
forms
of
wrongdoing such
as
breach
of
fiduciary
obligation,
for
centuries
but
which have been only recently rec-
ognized
as
being potentially available
in the
breach
of
contract context.
Disgorgement
relief
essentially involves awarding
the
plaintiff
the
bene-
*
John
D.
McCamus
is
Professor
of Law and
University Professor
at
Osgoode
Hall
Law
School,
York
University
in
Toronto.
i
Part
E of
this
article
is
drawn
from
Chapter
23 of
J.D.
McCamus,
The Law
of
Con-
tracts
(Toronto:
Irwin
Law,
2005).
Portions
of
Part
B are
drawn
from
J.D. McCamus,
"The Evolving Role
of
Fiduary
Obligation"
in
Meredith
Lectures
1998-99,
The
Con-
tinued
Relevance
of
the Law
of
Obligations:
Back
to
Basics
(Montreal:
Les
Editions Yvon
Blais,
2000)
at
171.
123
124
JOHN
D.
MCCAMUS
fits
secured
by the
defendant wrongdoer through wrongful conduct.
Disgorgement
relief
will
be
attractive
to the
plaintiff,
obviously,
where
the
benefits
secured through
the
wrongful conduct
offers
a
measure
of
relief
which
is
more
generous
to the
plaintiff
than
a
claim
for
dam-
ages measured
by the
loss sustained
by the
plaintiff
as a
result
of the
wrongful
conduct. Disgorgement
may
also
be an
attractive
form
of
relief
if
the
claim
for
damages
suffered
is, for
some reason, unavailable
to the
plaintiff.
Any
examination
of the
civil remedies available
to the
victim
of
wrongful conduct,
then,
should include
an
assessment
of the
possibil-
ities
for
restitutionary
relief.
Although recognition
of the
utility
or
viability
of
"restitution"
or
"unjust
enrichment"
as the
third branch
of the law of
obligations
(in
addition
to
contract
and
tort)
has
occurred
within
the
last several decades
in
Canadian common law,
it
nonetheless remains
the
case,
I
fear,
that
the
nature
of the
subject
and its
basic architecture
is not
widely under-
stood within
the
legal profession. Although courses
on
restitution
are
offered
in a
number
of
Canadian
law
schools, this
is not
invariably
the
case.
Moreover, such courses
are
certainly
not
mandatory
for
students.
Accordingly,
the
typical
law
school graduate will
not
have studied
the
subject
and, when
first
encountering
its
relevance
in
practice,
is
likely
to
find the
material somewhat unfamiliar.
The
doctrines which have been
drawn together
to
form
the law of
restitution
are
often
rather complex.
The
terminology
in
which concepts
are
expressed
often
still
reflect
their
medieval origins. Further complexity
is
introduced
by
recent controver-
sies concerning
the
meaning
of
central concepts such
as
"restitution"
and
"unjust enrichment."
In
short, working with restitutionary doctrine
poses
challenges
that
are not
present
to the
same
degree
or not
present
at
all
when working with
the
more
familiar
doctrines
of
contract
and
tort.
Nonetheless,
the field is not
impenetrable. Indeed,
the
basic
objective
of
the
recognition
or
development
of the
subject
was to
render
the field
more accessible
and
understandable.
To
some degree, that
objective
has
been attained
in
recent years
in
common
law
jurisdictions.
At the
same
time,
on an
occasion such
as
this,
it is
probably still desirable
to
begin
a
discussion
of
this kind
by
informing
or
reminding
the
reader about
the
basic
architecture
of
this subject.
The
next
two
sections
of
this paper
are
devoted
to
this
task.
We
will
then
turn
to an
examination
of
disgorge-
ment
in the
context
of
tort
and
contractual breach.
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