Restitution Discussion Group Archives
| Sender: |
Andrew Tettenborn |
| Date: |
Mon, 2 Sep 1996 11:29:37 +0100 |
| Re: |
Comments on partial failure |
I am a law student at UWA doing an
honours thesis in restitution - in particular - I am examining a doctrine
of partial failure of consideration, and have encountered a few interesting
points on which I would appreciate anyone's opinion. 1. The nature of a quantum meruit
as a remedy - particularly for a total failure of consideration- appears
anomalous within the law of unjust enrichment. Surely the enrichment
of a defendant would be better measured by a measure such as the net
realisable value of a benefit received, than a quantum meruit which
really is measuring the plaintiff's reasonable costs rather than a defendant's
gain. At best it is just a rough cost-based approximation of a defendant's
gain. 2. Although most commentators seem set on a contractual ceiling
in cases where a quantum meruit exceeds the contract price isn't this
allowing a subjective measure of the defendant's gain? The principle
of subjective devaluation in relation to the question of enrichment
is directed to protecting the principle of freedom of choice. Once it
is determined that the def has been enriched, it would not appear that
the defendants subjective opinion as to the value of his gain (as evidenced
by the contract price) is relevant to the determination of the quantum
of the restitutionary reward. Further, in the context of unenforceable
contracts, a plaintiff cannot rely on the contract price when it is
MORE than the quantum meruit (Deane J, Pavey) so why should
a defendant in breach be able to rely on the contract price as a ceiling?
An interesting question. Isn't the answer as follows?
1. If I render you services and sue you on a quantum
meruit, isn't the sensible prima facie measure of your enrichment the
amount you'd have had to pay for the services if you'd got them elsewhere?
The amount you can now get if you 'realise' them seems to me to be a bit
of a red herring, and furthermore might well have the effect of depriving
you of a profit you quite legitimately expected to make from reselling
them.
Also, what about the case where services are rendered
at your request? I simply can't see why you shouldn't - extraordinary
circumstances aside - have to pay a straightforward reasonable price for
them.
True, if you have a situation where services are rendered
under a contract void for mistake - the classic Vickery v Ritchie
situation - there might be a case for limiting recovery to realised (or
realisable) value. But isn't that better done by extending a flexible
change of position defence?
2. The reason I incline to support a contract ceiling,
at least in valid contract cases, is that to abandon it has the effect
of subverting contractual expectations. If I agree to do something for
$1000 you have a very legitimate expectation that you won't have to pay
more than $1000 (or pro rata plus front-end loading). To let me get more
than that defeats the object of the exercise. The only case where this
reasoning doesn't apply is where there wasn't a valid contract in the
first place, since there your expectation of a limited price is that less
legitimate.
Andrew Tettenborn.
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