Examples
Neal Townsend contracts with Keith Knowlton to provide a year's worth of labor at a specific price P. Keith is to pay Neal for his labor at the end of the year. After 9.5 months Neal decides to quit the job. Neal sues Keith and recovers the fair market value of the labor he performed for Keith during those 9.5 months. Note that in this instance, because Neal is in breach of his contract with Keith, Neal cannot recover more than the contract rate for his labor. The non-breaching party is protected from paying more than the contract rate for labor. The supporting reasoning is that it would be unfair to make the party who has lived up to his end of the agreement pay more than he agreed to in the first place. However, the breaching party is afforded no such protection.
Suppose again, that Neal is a building contractor who has been awarded a contract to build a skyscraper. Neal hires Keith to handle all necessary steel erection. The contract calls for Neal to furnish the cranes Keith needs to lift the beams into position. Neal does not furnish these cranes to Keith. At first, Keith performs and hires cranes at his own expense but partway through the contract Keith stops and refuses to go further on account of Neal's breach. Keith sues Neal and recovers the fair market value of the services he has rendered to Neal thus far. As the non-breaching party, Keith is entitled to the fair market value of his services (what it would cost one in Neal's position to hire one in Keith's position to perform the services Keith has rendered to Neal) even if it exceeds the contract price for such services.
Not all actions in restitution involve contracts. However, whenever one party confers a material benefit upon another with the reasonable expectation he will be compensated for doing so, the party conferring the benefit is entitled to restitution.
Read more about this topic: Unjust Enrichment
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