Introduction: Restitution and Unjust Enrichment

Texas Law Review, June 2001 | Go to article overview

Introduction: Restitution and Unjust Enrichment


Symposium

Relegated to the margin of the first-year courses in Contracts and Property, the law of Restitution and Unjust Enrichment is the forgotten child in American private law. Unjust enrichment has long been an organizing concept in the civil law, and, during the past two decades, Restitution has been one of the English private law's most exciting areas of study. Interest in the subject may be quickening in America as well. The new Restatement of Restitution and Unjust Enrichment is in the making; and, as the cauldron of the American legal system simmers away, problems-both new and old-rise to the surface. We hope that this Symposium, which includes scholars from several nations, will help fill a void in our understanding of private law and stimulate interest in this important subject.

General Taxonomy

Several articles in the Symposium address the taxonomy of Restitution and of the law in general. Peter Birks makes a general case for the value of a clear and rational legal taxonomy. This sets the stage for an attack on drafts of the new Restatement of Restitution and Unjust Enrichment for not adequately distinguishing between restitution as a remedial legal response and unjust enrichment as a basis of obligation. Specifically, Birks argues that it is vital to distinguish between wrongs-based restitution and restitution based upon a mistaken transfer. A number of other authors in the Symposium side with Birks on this specific point.

Gerhard Dannemann brings the insights of a comparativist to the conversation about the general taxonomy of the law of Restitution. Contrasting German and English law, Dannemann notes that the general rule in Germany entitles the plaintiff to recover a benefit he conferred upon the defendant, unless the defendant can establish a positive entitlement to the benefit. English law, on the other hand, favors security of receipts. Though the two systems start from different presumptions, Dannemann observes that they tend to reach similar results in most cases. Divergence arises, however, in cases of contested performance, in which the plaintiff performs a contested contractual obligation because the defendant threatens him with "dire consequences" for nonperformance. The English have rarely allowed recovery in contested-performance cases, and only then by contorted legal reasoning. German law has been more generous. Yet, as English law comes closer to embracing a general principle of unjust enrichment, Dannemann warns that the English will need to develop a German-like list of grounds to negate certain claims of unjust enrichment in contested-performance cases.

Mark Gergen offers a general taxonomy of the law of Restitution that accounts for different values that are relevant to different parts of the law. He argues that Restitution has three main headings: restitution for wrongs, policy-based restitution, and restitution for "enrichment by impoverishment"-this final heading comprising cases in which the law reverses accidental shifts of wealth. While utilitarianism and other familiar philosophical grounds can justify wrongs-based and policy-based restitution, Gergen argues that reversals of accidental shifts in wealth are justified by primitive human instincts and values embodied in the ancient legal maxim that "it is wrong to profit from another's misfortune." In the interests of finality and certainty, Gergen defends the common law's tendency to be conservative about reversing accidental shifts in wealth when it cannot do so by rule. Thus, while advocating a taxonomy that puts at its top a general principle of enrichment by impoverishment, Gergen concludes that this principle should be understood mostly as a way of organizing rules.

Emily Sherwin examines three functions said to be performed by the concept of unjust enrichment: first, to authorize judges to decide individual cases on an equitable basis; second, to act as a Dworkinian principle that directs decisions in a nonbinding way; and third, to serve as an organizing principle for a body of rules.

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