Editing Restitution and unjust enrichment

{{short description|Legal remedy taking away a benefit wrongfully obtained}}
{{redirect|Restitution}}
{{Judicial remedies}}
'''Restitution and unjust enrichment''' is the field of law relating to gains-based recovery. In contrast with [[damages]] (the law of compensation), restitution is a claim or remedy requiring a defendant to give up benefits wrongfully obtained. Liability for restitution is primarily governed by the "principle of unjust enrichment": A person who has been unjustly enriched at the expense of another is required to make restitution.<ref>See generally: Mitchell et al, ''Goff & Jones Law of Unjust Enrichment'' (Sweet & Maxwell, 8th ed, 2011); Graham Virgo, ''The Principles of the Law of Restitution'' (3rd ed, 2015); Andrew Burrows, ''The Law of Restitution'' (3rd ed, 2011); Mason, Carter, and Tolhurst, ''Mason & Carter's Restitution Law in Australia'' (LexisNexis, 2nd ed, 2008). On unjust enrichment as a 'unifying legal concept', see the judgment of Deane J in ''Pavey & Mathews v Paul'' (1987) 162 CLR 221.</ref>

This principle derives from late Roman law, as stated in the Latin maxim attributed to [[Sextus Pomponius]], ''Jure naturae aequum est neminem cum alterius detrimentum et injuria fieri locupletiorem''<ref>[[Digest (Roman law)|Digest]] of [[Justinian I|Justinian]], 50.17.206; see also ''id.'' at 12.6.14 ("''Nam hoc natura aequum est neminem cum alterius detrimento fieri locupletiorem''").</ref> ("By natural law it is just that no one should be enriched by another's loss or injury"). In [[civil law (legal system)|civil law]] systems, it is also referred to as '''enrichment without cause''' or '''unjustified enrichment'''.<!--Under a related approach, "absence of basis," restitution is available when one party obtains a benefit from another without an adequate legal basis.<ref name="Birks">{{cite book |first=Peter |last=Birks |author-link=Peter Birks |title=Unjust Enrichment |year= 2005 |edition=2nd |series=Clarendon Law Series |publisher=[[Oxford University Press]] |location=Oxford|isbn=978-0191018855}}</ref>-->

In pre-modern English common law, restitutionary claims were often brought in an action for ''[[assumpsit]]'' and later in a claim for [[money had and received]]. The seminal case giving a general theory for when restitution would be available is [[Lord Mansfield]]'s decision in ''[[Moses v Macferlan]]'' (1760), which imported into the common law notions of conscience from English [[Court of Chancery|chancery]].{{efn|Both "conscience" and "chancery" as used here would more commonly be referred to as [[Equity (law)|equity]]. (To distinguish the two, these synonyms are used instead.) The former meaning of equity, originating from [[Aristotle]], refers to general notions of fairness tempering harsh rules, whereas the latter refers to the particular jurisprudence developed in the English [[courts of equity]].}} Blackstone's Commentaries also endorsed this approach, citing ''Moses''.<ref>William Blackstone, Commentaries on the Laws of England, Vol. 3, *162 ("A {{smallcaps|third}} species of implied ''[[Assumpsit|assumpsits]]'' is when one has [[Money had and received|had and received money]] of another's, without any valuable [[Consideration (law)|consideration]] given on the receiver's part: for the law construes this to be money had and received for the [[Use (law)|use]] of the owner only; and [[Legal fiction|implies]] that the person so receiving promised and undertook to account for it to the true proprietor. And, if he unjustly detains it, an [[Trespass on the case|action on the case]] lies against him for the [[Breach of contract|breach]] of such implied promise and undertaking; and he will be made to repair the owner in damages, equivalent to what he has detained in such violation of his promise. This is a very extensive and beneficial remedy, applicable to almost every case where the defendant has received money which ''[[ex aequo et bono]]'' he ought to refund. It lies for money paid by [[Mistake (contract law)|mistake]], or on a [[Failure of consideration|consideration which happens to fail]], or through imposition, extortion, or oppression, or where [[Undue influence|undue advantage]] is taken of the plaintiff's situation. [Footnote:] [[Moses v Macferlan|4 Burr. 1012]]").</ref>

Where an individual is unjustly enriched, modern common law imposes an obligation upon the recipient to make [[restitution]], subject to defences such as [[change of position]] and the protection of [[Bona fide purchaser|bona fide purchasers]] from contrary equitable title. Liability for an unjust enrichment arises irrespective of wrongdoing on the part of the recipient, though it may affect available remedies. And restitution can also be ordered [[#Restitution for wrongs|for wrongs]] (also called "waiver of tort" because [[election of remedies]] historically occurred when first filing a suit). This may be treated as a distinct basis for restitution, or it may be treated as a subset of unjust enrichment.

Unjust enrichment is not to be confused with [[illicit enrichment]], which is a legal concept referring to the enjoyment of an amount of wealth by a person that is not justified by reference to their lawful income.

==History==

=== Roman law ===
In [[Civil law (legal system)|civil law]] systems, unjust enrichment is often referred to as ''unjustified'' enrichment. Its historical foundation of enrichment without cause can be traced back to the Corpus Iuris Civilis.<ref name=":0">{{Cite journal|last=Davrados|first=Nikolaos|date=2018|title=Demystifying Enrichment Without Cause|url=https://digitalcommons.law.lsu.edu/cgi/viewcontent.cgi?article=6696&context=lalrev|journal=Louisiana Law Review|volume=78}}</ref> While the concept of enrichment without cause was unknown in classical Roman law,<ref>Michael Stathopoulos, Axiosis Adikaiologitou Ploutismou [Claim of Unjustified Enrichment] 2 (1972).</ref> Roman legal compilers eventually enunciated the principle of unjustified enrichment based on two actions of the classical Roman period—the ''condictio'' and the ''actio de in rem verso''.<ref name=":0" />

The ''condictio'' authorized recovery by the plaintiff of a certain object or money in the hands of the defendant. The defendant was considered a borrower who was charged with returning the object or money.<ref>See [[Max Kaser|MAX KASER]], DAS ALTRÖMISCHE JUS 286–88 (1949).</ref> For the ''actio de in rem verso'', the plaintiff bore the burden of specifying the cause for his demand, namely, demanding the restitution of assets that had exited the plaintiff's patrimony and entered the defendant’s patrimony through the acts of the defendant’s servants.<ref>{{Cite book |last=Zimmermann |first=Reinhard |title=The Law of Obligations: Roman Foundations of the Civilian Tradition |year=1990 |pages=878–884 |author-link=Reinhard Zimmermann}}</ref>

The coherent concept of unjustified enrichment then appeared in the Justinian Code, based on Roman pragmatism with equitable considerations and moral principles of Greek philosophy.<ref name=":0" /> In the Justinian Code, ''condictiones'' were grouped into categories, such as when the plaintiff had given a thing or money:<ref name=":0" />

# in contemplation of a future result that did not follow;
# for a reason disapproved by law or repugnant to public policy;
# by mistake because payment was not actually due; or
# without a good reason for the transaction.

Further, the ''actio de in rem verso'' gradually expanded to cover instances in which third parties were enriched at the expense of the impoverished obligee, and ''unjustified enrichment'' was recognized as a source of obligations under the heading of "quasi-contract".<ref name=":0" />

=== Civil law ===

For the [[School of Salamanca]] members, like [[Tomás de Mercado]], the prohibition of unjustified enrichment finds directly its source in [[natural law]],{{sfn|Decock|2013|p=512 and 570-571}} which doesn't allow a privileged party, and in the principle of commutative justice.{{sfn|Decock|2013|p=507-508}} Thus it manages apply to the entire law on propriety and contract. It had, for example, a strong influence on the reflexions regarding contracts of prostitution.{{sfn|Decock|2013|p=502-505}}

The interpretations of Roman law principles on unjustified enrichment, by the French jurist [[Jean Domat]] and the German jurist [[Friedrich Carl von Savigny]], formed the respective origins of the modern French and German law on unjustified enrichment.<ref>See Christos Filios, H Aitia Stis Enochikes Symvaseis [The Causa Contrahendi] 30, 101–25 (2007) (Greece).</ref> Domat developed the French unjustified enrichment principles based on the ''actio de in rem verso'', as well as a modified version of the Roman concept of ''causa'' (cause), which renders contracts actionable even when they are not normally recognized under Roman law.<ref name=":0" /> In contrast, the concept of unjustified enrichment is considerably broader and more frequently invoked in Germany and Greece to address issues of restitution as well as restoration for failed juridical acts.<ref>See 1 Max Kaser, Das Römische Privatrecht § 139.3 (2d ed. 1971).</ref>  [[Equitable tracing]] is a particularly well suited remedial tool.

=== Common law ===

''See also'': [[English unjust enrichment law]]

In systems of law derived from the English [[common law]], the historical core of the law of unjust enrichment lies in [[quasi-contract]]. These were common law (as distinct from [[Equity (law)|equitable]]) claims giving rise to a personal liability to pay the money value of a benefit received from another. Legal scholars from [[University of Oxford|Oxford]], [[University of Cambridge|Cambridge]] and [[Harvard University|Harvard]] at the turn of the 20th century began to rationalise these disparate actions into a coherent body of law.<ref>See generally: Baker, ''An Introduction to English Legal History'' (4th edition); Graham Virgo, ''The Principles of the Law of Restitution'' (3rd ed, 2015); Andrew Burrows, ''The Law of Restitution'' (3rd ed, 2011).</ref> The principle said to underlie these actions was eventually recognized as unjust enrichment.<ref>See, e.g., [[Pavey & Matthews Pty Ltd v Paul|''Pavey & Mathews v Paul'' [1987]]] (Australia); [[Lipkin Gorman v Karpnale Ltd|''Lipkin Gorman v Karpnale'' [1991]]] (England).</ref> Subsequent scholarship has sought to expand the explanatory power of the principle of unjust enrichment and it is now often said (albeit not without controversy)<ref>See, e.g., [http://www.austlii.edu.au/cgi-bin/viewdoc/au/cases/cth/HCA/2009/44.html ''Bofinger v Kingsway''<nowiki> [2009] 239 CLR 269</nowiki>]</ref> to encompass both common law and [[Equity (law)|equitable]] claims.<ref>See, e.g., Mitchell and Watterson, ''Subrogation: Law and Practice'' (2nd Edition).</ref>

==Framework==

Cases of unjust (or unjustified) enrichment can be examined in the following way:

* Was the defendant ''enriched''?
* Was the enrichment ''at the expense of the claimant''?
* Was the enrichment ''unjust''?
* Does the defendant have a ''defense''?
* What ''remedies'' are available to the claimant?
These questions are a familiar part of the modern [[English unjust enrichment law|English law of unjust enrichment]], having been popularised by the writing of [[Peter Birks|Professor Peter Birks]] and expressly endorsed by English courts.<ref>See, e.g., ''Bank of Cyprus v Menelou'' [2015] UKSC 66</ref><ref>{{cite book |last1=Birks |first1=Peter |title=Unjust enrichment |date=2005 |publisher=Oxford University Press |location=Oxford |isbn=0-19-927697-8 |edition=2nd}}</ref> The framework provides a useful taxonomical function in Australian law,<ref>See [http://www.austlii.edu.au/cgi-bin/viewdoc/au/cases/wa/WASC/2014/162.html ''Lampson v Fortescue Metals (No 3)''<nowiki> [2014] WASC 162</nowiki>] (Edelman J).</ref> although the concept of unjust enrichment has been subject to inconsistent treatment by Australian courts, as discussed below. Stated at this level of abstraction, the framework is a useful grounding for comparative study between common law and civil law jurisdictions.

===The meaning of ''unjust'': unjust factors vs. absence of basis===

Generally speaking, the mere receipt of a benefit from another is unobjectionable and does not attract legal consequences. The exception is where such receipt is "unjust" or "unjustified". Both [[Civil law (legal system)|civil]] and [[common law]] legal systems have bodies of law providing remedies to reverse such enrichment.

A conceptual split, albeit one not necessarily coextensive with the common law - civil distinction, is between systems based on an "unjust factor" approach and systems based on an "absence of basis" approach.
* [[Common law]] systems such as those of [[English law|England]], [[Law of Australia|Australia]], [[Law of Canada|Canada]] and the [[Law of the United States|United States]] typically adopt the "unjust factor" approach. In this analysis, the claimant must point to a positive reason why the defendant's enrichment is unjust. Examples of "unjust factors" that ground a claim for restitution include: mistakes of fact or law; [[Failure of consideration|total failure of consideration]], [[Duress in English law|duress]], [[undue influence]], and the [[Woolwich Building Society v IRC|''Woolwich'']] ground.
* [[Civil law (legal system)|Civil law]] systems such as those of [[Law of France|France]] and [[Law of Germany|Germany]] typically adopt an "absence of basis" approach. On this analysis, the defendant is obliged to make restitution if there is no "basis" for his receipt: for example, because the contract under which the defendant received the benefit was void ''ab initio''. Some common law systems have shown signs of a possible shift towards this approach.<ref>See, e.g., ''Deutsche Morgan Grenfell v IRC'' [2007] 1 AC 558</ref> 
In most cases, the conceptual approach does not affect the outcome of a case. For example, suppose that A makes an oral contract with B under which A will pay $100 for certain services to be provided by B. Further suppose that A pays the money but B discovers that, pursuant to legislation, contracts for such services are void unless in writing. B refuses to perform. Can A recover his payment? On both approaches, B is unjustly enriched at A's expense. On the "absence of basis" approach, B's enrichment has no legitimate explanatory basis because the contract was void. On the "unjust factor" approach, there has been a total failure of consideration{{snd}}that is, A has received no part of the bargained-for counter-performance; restitution follows automatically from the fact of invalidity.

===Remedies for unjust enrichment: personal and proprietary restitution===

The remedy for unjust enrichment is [[restitution]]: the restoration of what was conferred to the claimant. In short, the correcting of the injustice that occurred when the claimant suffered a subtraction of wealth and the defendant received a corresponding benefit.<ref>Note that it remains a controversial point, at least in [[English unjust enrichment law|English law]], whether there is a distinct "correspondence principle". See generally, Virgo, ''Principles of the Law of Restitution'' (3rd ed, 2015); Burrows, ''Law of Restitution'' (3rd ed, 2010).</ref> Restitution can take the form of a personal or a proprietary remedy.

Where a '''personal remedy''' is awarded, the defendant is ordered to pay the money value of the benefit received. This personal money award is the typical form of restitution ordered.

Where a '''proprietary remedy''' is awarded, the court recognises (or declares) that the defendant has a beneficial or security interest in specific property of the defendant. Whether proprietary remedies can be awarded depends on the jurisdiction in question.  
* In English law, the orthodox view is that unjust enrichment generally triggers personal, rather than proprietary remedies.<ref>But see ''Bank of Cyprus v Menelaou'' [2015] UKSC 66</ref> This is because the law of [[quasi-contract]] only generate personal money awards: either a liquidated debt (as in actions for money had and received or money paid) or a sum assessed by a civil jury or the court itself (as in quantum meruit or quantum valebat). Scholars seeking to expand the explanatory power of unjust enrichment have argued that other areas of the law such as subrogation and claims to traceable substitutes form part of the law of unjust enrichment. This view has been accepted, though its implications remain unclear.  
* In Australian law, actions derived from the common money counts continue to generate only personal remedies. The doctrinal basis of subrogation is not unsettled: it has nothing to do with unjust enrichment.<ref>[http://www.austlii.edu.au/cgi-bin/viewdoc/au/cases/cth/HCA/2009/44.html ''Bofinger v Kingsway''<nowiki> [2009] HCA 44</nowiki>]</ref> Claims to traceable substitutes are a part of the law of property, not unjust enrichment.

== Restitution for wrongs ==
Imagine that A commits a wrong against B and B sues in respect of that wrong. A will certainly be liable to pay compensation to B. If B seeks compensation then the court award will be measured by reference to the loss that B has suffered as a result of A's wrongful act. However, in certain circumstances it will be open to B to seek restitution rather than compensation. It will be in B's interest to do so if the profit that A made by his wrongful act is greater than the loss suffered by B. Or in some circumstances, the lost good "G" carries more value to B than the actual cost of "G". For example, suppose B possesses a rare book from the 14th century (G), which cost only Rs 10 in that period. A has illegally stolen G (from B) and has destroyed it. Currently very few samples of G exist in the world, yet since its demand is not much, G still costs Rs 10. Since very few samples exist in the world, it is near impossible to find a person from whom G could be bought. In such a circumstance, B is entitled to get Rs 10 from A under the law of torts. However, B might prefer to apply law of restitution instead (waiver of torts), and claim that he needs a copy of G rather than Rs 10.

Whether or not a claimant can seek restitution for a wrong depends to a large extent on the particular wrong in question. For example, in English law, restitution for breach of [[fiduciary duty]] is widely available but restitution for breach of [[contract]] is fairly exceptional. The wrong could be of any one of the following types:

* A statutory [[tort]]
* A common law tort
* An equitable wrong <ref>''Commercial Bank of Australia Ltd v Amadio'' [1983] HCA 14; (1983) 151 CLR 447.</ref>
* A breach of contract
* Criminal offences

Note that 1{{ndash}}5 are all ''causative events'' (see above). The law responds to each of them by imposing an obligation to pay compensatory damages. Restitution for wrongs is the subject which deals with the issue of when exactly the law also responds by imposing an obligation to make restitution.

;Example
In ''[[Attorney General v Blake]]'',<ref>{{cite web |url-access=subscription |url=http://www.lexisnexis.com/au/legal/search/enhRunRemoteLink.do?A=0.9352893430345183&service=citation&langcountry=AU&backKey=20_T23613782791&linkInfo=F%23AU%23All+ER%23vol%254%25sel1%252000%25page%25385%25year%252000%25sel2%254%25&ersKey=23_T23613782764 |title=Attorney General v Blake |work=[[LexisNexis]]}}</ref> an English court found itself faced with the following claim. The defendant had made a profit somewhere in the region of £60,000 as a direct result of breaching his contract with the claimant. The claimant was undoubtedly entitled to claim compensatory damages but had suffered little or no identifiable loss. It therefore decided to seek restitution for the wrong of breach of contract. The claimant won the case and the defendant was ordered to pay over his profits to the claimant. However, the court was careful to point out that the normal legal response to a breach of contract is to award compensation. An order to make restitution was said to be available only in exceptional circumstances.

==National systems==
=== Australia ===
Whether there is a distinct body of law in Australia known as the law of unjust enrichment is a highly controversial question. In ''[[Pavey & Matthews Pty Ltd v Paul|Pavey & Mathews v Paul]]'' [http://www.austlii.edu.au/cgi-bin/viewdoc/au/cases/cth/HCA/1987/5.html (1987) 162 CLR 221] the concept of unjust enrichment was expressly endorsed by the High Court of Australia. This was subsequently followed in numerous first instance and appellate decisions, as well as by the High Court itself.

Considerable skepticism about the utility of the concept of unjust enrichment has been expressed in recent years. The [[Equity (law)|equitable]] basis for the action for money had and received has instead been emphasised and in [http://www.austlii.edu.au/cgi-bin/viewdoc/au/cases/cth/HCA/2014/14.html ''Australian Financial v Hills''<nowiki> [2014] HCA 14</nowiki>] the plurality held that the concept of unjust enrichment was effectively 'inconsistent' with the law of restitution as it had developed in Australia. It is worth noting that the analytic framework had been expressly endorsed by the High Court just two years before in [http://www.austlii.edu.au/cgi-bin/viewdoc/au/cases/cth/HCA/2012/7.html ''Equuscorp v Haxton''<nowiki> [2012] HCA 7</nowiki>]. For the moment, the concept of unjust enrichment appears to serve only a taxonomical function.<ref>[http://www.austlii.edu.au/cgi-bin/viewdoc/au/cases/cth/HCA/2012/7.html ''Equuscorp v Haxton''<nowiki> [2012] HCA 7</nowiki>]; [http://www.austlii.edu.au/cgi-bin/viewdoc/au/cases/wa/WASC/2014/162.html ''Lampson v Fortescue Metals (No 3)''<nowiki> [2014] WASC 162</nowiki>] (Edelman J).
</ref>

===Belgium===
The reception of unjust enrichment into Belgian law has been upheld multiple times by the [[Court of Cassation (Belgium)|Court of Cassation]], which has ruled that unjust enrichment is a general principle of law.<ref>Cass. 17 November 1983, ''RW'' 1983-84, 2982.</ref><ref>Cass. 7 September 2001, ''Cah.dr.immo'' 2002, 18.</ref><ref>Cass. 19 January 2009, ''RCJB'' 2012, 69.</ref> The Court has stated that the legal basis for unjust enrichment is [[Equity (law)|equity]] (''ius aequum'').

According to the Court, five elements constitute unjust enrichment:
#an enrichment;
#an impoverishment;
#a connection between the enrichment and the impoverishment;
#an absence of a basis (''sine causa'') of the enrichment;
#a person alleging unjust enrichment may not simultaneously do so for benevolent intervention (''[[negotiorum gestio]]'') or undue payment (''solutio indebiti'').

===Canada===
The doctrine of unjust enrichment was definitively established as a fully fledged course of action in Canada in [https://www.canlii.org/en/ca/scc/doc/1980/1980canlii22/1980canlii22.html?searchUrlHash=AAAAAQAHcGV0dGt1cwAAAAAB&resultIndex=1 Pettkus v. Becker, 1980 CanLII 22 (SCC), [1980<nowiki>]</nowiki> 2 SCR 834] <ref name="Pettkus">{{cite web |title=The Emergence of Unjust Enrichment as a Cause of Action and the Remedy of Constructive Trust, 1988 CanLIIDocs 93 |url=https://commentary.canlii.org/w/canlii/1988CanLIIDocs93?zoupio-debug#!fragment/zoupio-_Toc3Page4/(hash:(chunk:(anchorText:zoupio-_Toc3Page4),notesQuery:'',scrollChunk:!n,searchQuery:'unjust%20enrichment%20in%20canada',searchSortBy:RELEVANCE,tab:search)) |website=CanLII |publisher=Alberta Law Review |access-date=July 3, 2020}}</ref>

To establish unjust enrichment, the Plaintiff needs to show: (i) enrichment; (ii) deprivation; (iii) causal connection between enrichment and deprivation; and (iv) absence of juristic justification for the enrichment.<ref name="Pettkus" />

The concept of deprivation and enrichment are extremely broad. Deprivation refers to any loss of money or money's worth in the form of contribution while A is enriched if B contributes to the acquisition of assets in A's name.<ref name="Pettkus" /> The causal connection between enrichment and deprivation must be "substantial and direct".<ref name="Pettkus" /> The absence of juristic reason is satisfied if a Plaintiff establishes a reason why the benefit ought not be retained, or if the Defendant demonstrates a convincing argument in favour of retention of the property.<ref name="Pettkus" /> Remedy for unjust enrichment is frequently an imposition of constructive trust over the property unjustly retained.<ref name="Pettkus" />

===United Kingdom===
{{main|Unjust enrichment in English law}}
The [[English unjust enrichment law|law of unjust enrichment in England]] rapidly developed during the second half of the 20th century. It has been heavily influenced by the writings of jurists from [[University of Oxford|Oxford]] and [[University of Cambridge|Cambridge]].<ref>See, e.g., ''Commerzbank v Gareth Price-Jones'' [2004] EWCA Civ 1663 at [47] (Mummery LJ).</ref> England adopts the "unjust factor" approach.

In Scotland, the law developed in a piecemeal fashion through the twentieth century, culminating in three pivotal cases in the late 1990s. The most crucial of these was ''Shilliday v Smith'', in which Lord Roger essentially laid the bedrock for what is now considered modern Scots unjustified enrichment law, bringing together the fragmented law into one framework, drawing from the principles of Roman Law upon which Scots Law as a whole is based (note the term "unjustified" is preferred to "unjust" in Scotland). Unjustified enrichment is more established as a fundamental part of the Scots law of obligations than unjust enrichment is in English law.<ref>{{Cite web|date=2015-08-25|title=Shaping the law of unjust enrichment|url=https://www.law.ox.ac.uk/research-subject-groups/research-index/impact-index/shaping-law-unjust-enrichment|access-date=2021-08-28|website=Oxford Law Faculty|language=en}}</ref>

=== United States ===
{{Hatnote|For restitution sought by U.S. regulatory agencies, see [[disgorgement]].}}
The ''[[Restatements of the Law|Restatement (Third) of Restitution and Unjust Enrichment]]'' (2011) (“R3RUE”) states that unjust enrichment is a body of legal obligations under the [[common law]] and [[equity (law)|equity]] – but separate from [[tort]] and [[contract law]] – that is available to take away an enrichment that lacks an adequate legal basis. A claim of restitution for unjust enrichment “results from a transaction that the law treats as ineffective to work a conclusive alteration in ownership rights.”<ref>Restatement (Third) of Restitution and Unjust Enrichment, §1, comment b (Discussion Draft 2000)</ref><ref>{{Cite web|title=The Intellectual History of Unjust Enrichment|url=https://harvardlawreview.org/2020/04/the-intellectual-history-of-unjust-enrichment/|access-date=2021-08-28|website=harvardlawreview.org|date=3 April 2020 |language=en-US}}</ref>

The Third Restatement and its predecessor, the ''Restatement on Restitution'' (1937),{{efn|The [[American Law Institute]] did not publish a new volume on restitution during its [[Restatements of the Law#Second|second series]] of [[Restatements of the Law|restatements]]. As such, there is no “Second Restatement on Restitution,” except as abandoned drafts.}} advocate for treating restitution as a unified and cohesive body of law, rather than a muddled variety of miscellaneous legal and equitable claims, remedies, and doctrines such as [[quantum meruit]], [[quantum valebant]], [[account of profits]], [[quasi-contract]], [[constructive trust]], [[money had and received]], and so forth.

Because the common law is mostly governed by state law, especially after ''[[Erie Railroad Co. v. Tompkins]]'' (1938), restitution is mostly determined by the law of each state and territory. However, it can also be a remedy under federal law. Also in 1938, the enactment of the [[Federal Rules of Civil Procedure]] merged procedures for law and equity and replaced the common-law [[Form of action|forms of action]] with a single civil action. This has, to some extent, blurred differences between legal and equitable restitution, and obscured awareness of legal restitution's origin in the action of [[assumpsit]].<ref>[[Douglas Laycock]], ''The Scope and Significance of Restitution'', 67 [[Texas Law Review|Tex. L. Rev.]] 1277, 1278 (1989).</ref>

==== Federal case law ====

One early case in the Supreme Court, ''[[Bingham v. Cabot (1795)|Bingham v. Cabot]]'' (1795), was a suit at law for [[money had and received]], [[quantum meruit]], and [[quantum valebant]] (three "common counts" for legal restitution). (The decision focused on other questions, including whether the case should have been brought in [[Admiralty law|admiralty]] and whether in deciding a [[Writ#Other writs|writ of error]] the court could take notice of certain facts.)

In ''[[Bright v. Boyd]]'', 4 F. Cas. 127, [https://cite.case.law/f-cas/4/127/?highlight=compensation+for+permanent+improvements+made+upon+the+estate%2C+which+have+greatly+enhanced+its+value%2C+under+a+title%2C+which+turns+out+defective 132-34] (C.C.D. Maine 1841), Justice [[Joseph Story]], a prominent early American jurist (and author of influential treatises on equity), held that recovery was available in [[Equity (law)|equity]] for mistaken improvements to land (i.e., when the person improving the land later learns that he did not own the land), citing the Latin maxim against enrichment at another's detriment.

Federal patent and copyright law has long allowed recovery for either damages or profits. In ''[[Livingston v. Woodworth]]'', 56 U.S. 546 (1854), the Supreme Court held that a patent-owner could sue in equity for an infringer’s profits, saying that the ill-gotten profits belonged “''[[ex aequo et bono]]''” to the owner of the patent. Later, recovery for either damages or profits was codified in statute. The Supreme Court identified recovery of profits under the Copyright Act as a form of equitable relief for “unjust enrichment” in ''[[Sheldon v. Metro-Goldwyn Pictures Corp.]]'' (1940).

In ''[[Trustees v. Greenough]]'' 105 U.S. 527 (1881), the Supreme Court held that, in a representative suit in equity (later known as a [[class action]]), a representative plaintiff who recovers a "common fund" for the benefit of all represented plaintiffs (absent class members) may recover attorney fees from the fund, preventing enrichment of the absent plaintiffs at the expense of the representative plaintiff. This is an exception to the "[[American rule (attorney's fees)|American rule]]" that litigants must pay their own attorney fees (absent statutory exceptions). In ''[[Central Railroad & Banking Co. of Georgia v. Pettus]]'' (1885), the court held that the representative plaintiff could not, however, recover a salary for the time spent litigating. 

Restitution is available in equity to recover money previously paid to satisfy a court judgment that is later reversed, as the Supreme Court held in ''[[Atlantic Coast Line R. Co. v. Florida]]'', 295 U.S. 301 (1935). However, the Court therefore noted that equitable defenses are available where it would not be fair to require the money to be returned.

In ''[[Mobil Oil Exploration & Producing Southeast, Inc. v. United States]]'', 530 US 604 (2000), the Supreme Court ruled that, in a contract with the United States (one of few areas where federal contract law applies), repudiation is grounds for restitution, even if the contract was repudiated by a statute. (Congress had blocked Mobil's offshore oil lease, so the United States had to return the money paid for the lease.)

In ''[[Great-West Life and Annuity Insurance Company v. Knudson]]'', 534 U.S. 204 (2002), the Supreme Court noted that legal restitution and equitable restitution are not historically identical, and so it held that legal restitution is not covered by a provision of [[Employee Retirement Income Security Act of 1974|ERISA]] authorizing only equitable relief.

In ''[[Kansas v. Nebraska]]'', 574 U.S. 445 (2015), the Supreme Court ordered restitution by Nebraska as an [[equitable remedies|equitable remedy]] for breach of an interstate water-sharing agreement with Kansas. The majority cited the  Third Restatement to support the availability of restitution for “[[efficient breach|opportunistic breach]]” of contract.

In ''[[Liu v. Securities and Exchange Commission]]'' (2020), the Supreme Court held that restitution (usually called “disgorgement” in U.S. securities law) is available for violations of federal securities law because the SEC is authorized to seek “equitable relief” under 15 U.S.C. § 78u(d)(5).

In ''[[AMG Capital Management, LLC v. FTC]]'' (2021), the Supreme Court held that statutory authority for the Federal Trade Commission to sue for an “injunction” does not authorize suit for restitution. The court unanimously held that the statutory language refers to prospective equitable relief, and does not include retrospective monetary relief.

In ''Pearson v. Target Corp.'', 968 F.3d 827 (7th Cir. 2020), the [[United States Court of Appeals for the Seventh Circuit|Seventh Circuit]] held that equitable restitution is available for a practice known as "objector blackmail," where objectors to a [[class action]] settlement drop their objections on behalf of the class in return for a [[rent-seeking|private payment]] in excess of the rest of the class.

In ''Williams Electronics Games, Inc. v. Garrity'', 366 F.3d 569 (7th Cir. 2004), Judge [[Richard Posner]] held that restitution for wrongs is generally "available in any [[Intentional tort|intentional-tort]] case in which the tortfeasor has made a profit that exceeds the victim's damages." (The Third Restatement puts further qualifications, including that restitution for wrongs is not available where an [[injunction]] to prevent the tort would have been inequitable.<ref>R3RUE § 44(1) ("A person who obtains a benefit by conscious interference with a claimant's legally protected interests .{{nbsp}}.{{nbsp}}. is liable in restitution as necessary to prevent unjust enrichment, unless competing legal objectives make liability inappropriate."); ''id.'' § 44(3) ("Restitution by the rule of this section will be limited or denied (a) if the court would refuse to enjoin the interference, assuming timely application and an absence of procedural or administrative obstacles; .{{nbsp}}.{{nbsp}}.{{nbsp}}.")</ref>)

==== Books on American restitution ====

* {{Cite book |title=Restatement (Third) of Restitution and Unjust Enrichment |publisher=[[American Law Institute]] |year=2011 |location=St. Paul, MN}}
* {{Cite book |last1=Kull |first1=Andrew | last2=Farnsworth | first2=Ward |title=Restitution and Unjust Enrichment: Cases and Notes |publisher=Wolters Kluwer |year=2018 |isbn=978-1-5438-0090-6 |location=New York}}
* {{Cite book |last=Farnsworth |first=Ward |author-link=Ward Farnsworth |title=Restitution: Liability for Unjust Enrichment |publisher=University of Chicago Press |year=2014 |isbn=978-0-226-14402-3}} 
* {{Cite book |last=Palmer |first=George E. |title=The Law of Restitution |publisher=Little, Brown & Co. |year=1978 |location=Boston}}
* {{Cite book |title=Restatement of Restitution |publisher=[[American Law Institute]] |year=1937 |location=St. Paul, MN}}
* {{Cite book |last=Keener |first=William A. |title=A Treatise on the Law of Quasi-Contracts |publisher=Baker, Voorhis & Co. |year=1893 |location=New York}}

==See also==
*[[Quasi-contract]], the [[legal fiction]] that mostly evolved into modern restitution
**''[[Indebitatus assumpsit]]'', the historical [[form of action]] for asserting a quasi-contract in common law, especially by asserting the "[[Assumpsit#Common counts|common counts]]," such as:
***[[Money had and received]]
***''[[Quantum meruit]]''
***''[[Quantum valebant]]''
*[[Equitable remedy|Equitable remedies]] for restitution include:
**[[Account of profits]]
**[[Constructive trust]]
**[[Equitable tracing]]
*Other parts of the law of obligations:
**[[Contract|Law of contract]]
**[[Tort law|Law of tort]]
**[[Trust law|Law of trusts]]
*Leading scholars on the English [[English unjust enrichment law|law of unjust enrichment]]:
** [[Robert Goff, Baron Goff of Chieveley]]
** [[Gareth Jones (lawyer)|Professor Gareth Jones]]
** [[Peter Birks|Professor Peter Birks]]
** [[Andrew Burrows|Professor Andrew Burrows]]
** [[Graham Virgo|Professor Graham Virgo]]
** [[Charles Mitchell (professor)|Professor Charles Mitchell]]

== Notes ==
{{notelist}}

== References ==
{{Reflist}}

== Sources ==
* {{Cite book|last1=Decock|first1=Wim|title=Theologians and Contract Law : The Moral Transformation of the Ius commune (ca. 1500-1650)|location=Leiden/Boston|publisher=Martinus Nijhoff Publishers|date=2013|pages=723|isbn=978-90-04-23285-3 |url=https://brill.com/display/title/21931}}

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{{DEFAULTSORT:Restitution and unjust enrichment}}
[[Category:Unjust enrichment| ]]
[[Category:Civil law (common law)]]
[[Category:Contract law]]
[[Category:Legal doctrines and principles]]
[[Category:Restitution]]