RESTITUTIONARY DAMAGES TO DETER BREACH OF CONTRACT

2001 ◽  
Vol 60 (1) ◽  
pp. 1-58 ◽  
Author(s):  
David Fox
Keyword(s):  
Attorney General ◽  
Monetary Incentive ◽  
Breach Of Contract ◽  
House Of Lords ◽  
Contractual Rights

“THE essence of contract is performance”. So argued Professor Daniel Friedmann in discussing the rationale of remedies for breach of contract ((1995) 111 L.Q.R. 628, 629). The House of Lords’ decision in Attorney-General v. Blake [2000] 3 W.L.R. 625 lends new support to this view. It holds that a claimant’s interest in performance of his contractual rights may, exceptionally, entitle him to recover restitutionary damages from the defaulting party. Measured by the defendant’s gain from the breach, rather than the claimant’s expectation or reliance loss, restitutionary damages transfer to the claimant the profit that the defendant makes by his wrong. Failing any other adequate remedy for the claimant, liability to restitutionary damages encourages the defendant to perform his duty by depriving him of the monetary incentive to commit a breach.

A Corrective Justice Account of Disgorgement for Breach of Contract by Analogy to Fiduciary Remedies

2016 ◽  
Vol 29 (1) ◽  
pp. 149-190
Author(s):  
Anthony Robert Sangiuliano
Keyword(s):  
Attorney General ◽  
Fiduciary Duty ◽  
Third Party ◽  
Corrective Justice ◽  
Alternative Account ◽  
Breach Of Contract ◽  
House Of Lords ◽  
The Uk ◽  
Contractual Rights ◽  
Do So

A corrective justice account of a private law remedy attempts to the explain the remedy as giving back to the plaintiff something to which the plaintiff had a prior right that was breached by the defendant's receipt of that thing. It has proven challenging to explain how disgorgement for breach of contract is consistent with corrective justice. This remedy gives to the plaintiff any profit that a defendant received from a third party by breaching a contract with the plaintiff. In this paper, I critique two leading attempts to show how disgorgement for breach of contract is consistent with corrective justice. I argue that these attempts fail, and I suggest that a plausible corrective justice account of disgorgement should be based on something other than the nature of the contractual rights borne by a plaintiff. I then develop an alternative account based on an analogy between disgorgement for breach of contract and disgorgement for breach of fiduciary duty. To do so, I draw on recent scholarship on the consistency of disgorgement for breach of fiduciary with corrective justice and analyze the leading judicial decision on disgorgement for breach of contract by the UK House of Lords inAttorney General v. Blake. I argue that the fiduciary-based account can provide a plausible explanation for how disgorgement effectuates corrective justice by giving back to a plaintiff something to which he had an antecedent right that the defendant violated by profiting from a breach of contract.

Disgorgement of Profits for Breach of Contract: A Comparative Analysis

2003 ◽  
Vol 7 (1) ◽  
pp. 27-59 ◽  
Author(s):  
Mathias Siems
Keyword(s):  
Common Law ◽  
Attorney General ◽  
German Law ◽  
Legal Systems ◽  
Breach Of Contract ◽  
House Of Lords ◽  
Similarities And Differences ◽  
Compensatory Damages ◽  
Unjustified Enrichment ◽  
Legal Concepts

This article considers whether a contract-breaker is obliged not only to pay compensatory damages but also to disgorge to the innocent party the profits obtained from breach of contract. After an introduction to the topic, the approach of the courts in Common Law jurisdictions will be outlined. The main focus will be on English Law and the decision of the House of Lords in Attorney General v Blake, althoughjudgmentsfrom other countries will also be mentioned. Thereafter thefocus will be upon Germany as an example ofa Civil Lawjurisdiction. The German law of contract, negotiorum gestio and unjustified enrichment will be examined as to their ability to award disgorgement. The mixed legal systems of Israel, Louisiana and Scotland will also be studied. The similarities and differences between the different legal systems will then be compared and interpreted. In particular, the article will consider common starting points, exceptions and new legal concepts, as well as differences injudicial decision-making and in thefreedom to draft contractual terms. Finally, it will be contended that disgorgement ofthe benefits resultingfrom a breach ofcontract should in principle be awarded. Moreover, this should not be restricted to certain cases. It is necessary only that the gains should be attributable to breach of contract.

Efficiency, disgorgement and reliance in contract: a comment on Campbell and Harris

Legal Studies ◽  
2002 ◽  
Vol 22 (4) ◽  
pp. 570-577 ◽  
Author(s):  
Peter Jaffey
Keyword(s):  
Economic Theory ◽  
Recent Article ◽  
The Other ◽  
Breach Of Contract ◽  
House Of Lords ◽  
Aggregate Wealth

In a recent article in this journal, David Campbell and Donald Harris criticise the House of Lords decision in A-G v Blake, which held that in some circumstances there can be a liability to surrender the profits of a breach of contract to the other contracting party, ie a liability for disgorgement, as it will be referred to here. The criticism invokes what is sometimes referred to as the economic theory of efficient breach, which can be expressed briefly as follows. The performance of contracts generally increases aggregate wealth – ie is efficient – because parties will contract only on terms that provide them with a benefit that exceeds their costs of performance. But sometimes the circumstances will change after contracting, such that overall wealth will be maximised if the contract is not performed as agreed. For example, the defendant contracting party may discover an opportunity that he or she can take up only by abandoning the contract, and this opportunity may generate enough money to leave a profit, even after the claimant has been compensated for breach.

the other parties to a related contract. As will be seen below, some of these relationships, although not all, will be covered by the provisions of the Contracts (Rights of Third Parties) Act 1999 and may, more easily be regarded as giving rise to enforceable contractual rights in favour of a third party. In Dunlop Pneumatic Tyre Co Ltd v Selfridge & Co Ltd, Dew & Co, a firm of motor factors agreed to distribute Dunlop tyres. Part of the agreement was that Dew would adhere to a price maintenance structure set out by Dunlop and that Dew would require any subsequent purchaser from them of Dunlop tyres also to adhere to that price maintenance structure. Dew sold Dunlop tyres to Selfridge, who then proposed to sell those tyres at a price lower than had been stipulated by Dunlop. The contract between Dew and Selfridge provided that Selfridge would adhere to Dunlop’s minimum prices and the question arose whether Dunlop could enforce the relevant term in their favour, despite the fact that they were not parties to the contract which contained the relevant term. The House of Lords held that as no consideration moved from Dunlop to Selfridge, the contract was unenforceable by Dunlop against Selfridge: Dunlop Pneumatic Tyre Co Ltd v Selfridge & Co Ltd [1915] AC 847, HL, p 853

1995 ◽  
pp. 753-755
Keyword(s):  
Third Parties ◽  
The Other ◽  
Third Party ◽  
House Of Lords ◽  
Relevant Term ◽  
Contractual Rights ◽  
Price Maintenance

afterwards, the company's chairman agreed to the company being taken over by another company. The merchant bankers informed the appellant of the proposed take-over and told him that a public announcement would be made shortly but that until then the information was sensitive and highly confidential. The appellant promptly purchased 6,000 shares in the company and, following the announcement of the take over, made a substantial profit. He was charged with two offences of dealing in the securities of a company as a prohibited person, contrary to s1(3) and (4)(a) of the Company Securities (Insider Dealing) Act 1985 (subsequently replaced by Criminal Justice Act 1993, Pt V). The trial judge directed the jury to acquit the appellant on the ground that there was no evidence that he had 'obtained' the information, for the purposes of s1(3), since it had been given to him unsolicited. The Attorney General then referred to the Court of Appeal for its opinion the question of the meaning of 'obtained' in s1(3) of the 1985 Act. The Court of Appeal held that a person obtained information for the purposes of s1(3) and (4)(a) of the 1985 Act, even if he came by it without any positive action on his part. On the appellant's application the Court of Appeal referred the point to the House of Lords. where-(a)

2012 ◽  
pp. 185-188
Keyword(s):  
Criminal Justice ◽  
Attorney General ◽  
Trial Judge ◽  
Public Announcement ◽  
House Of Lords ◽  
Positive Action ◽  
Insider Dealing ◽  
A Company ◽  
Court Of Appeal

Jackson v HM Attorney General [2005] UKHL 56, House of Lords

2020 ◽  
Author(s):  
Thomas E. Webb
Keyword(s):  
Attorney General ◽  
Public Law ◽  
Parliamentary Sovereignty ◽  
House Of Lords ◽  
The Relationship

Essential Cases: Public Law provides a bridge between course textbooks and key case judgments. This case document summarizes the facts and decision in Jackson v HM Attorney General [2005] UKHL 56, House of Lords. This case concerned the interpretation of the Parliament Acts 1911 and 1949 and the implications of this interpretation for the relationship between the Houses of Parliament. The case also contained important obiter from the House of Lords on the nature of parliamentary sovereignty. The document also includes supporting commentary from author Thomas Webb.

Bratty v Attorney-General for Northern Ireland [1963] AC 386, House of Lords

2021 ◽  
Author(s):  
Jonathan Herring
Keyword(s):  
Northern Ireland ◽  
Criminal Law ◽  
Attorney General ◽  
House Of Lords

Essential Cases: Criminal Law provides a bridge between course textbooks and key case judgments. This case document summarizes the facts and decision in Bratty v Attorney-General for Northern Ireland [1963] AC 386, House of Lords. The document also included supporting commentary from author Jonathan Herring.

Bratty v Attorney-General for Northern Ireland [1963] AC 386, House of Lords

2017 ◽  
Author(s):  
Jonathan Herring
Keyword(s):  
Northern Ireland ◽  
Criminal Law ◽  
Attorney General ◽  
House Of Lords

Essential Cases: Criminal Law provides a bridge between course textbooks and key case judgments. This case document summarizes the facts and decision in Bratty v Attorney-General for Northern Ireland [1963] AC 386, House of Lords. The document also included supporting commentary from author Jonathan Herring.

JC Smith's The Law of Contract

2018 ◽  
Author(s):  
Paul S. Davies
Keyword(s):  
Contract Law ◽  
Undue Influence ◽  
Breach Of Contract ◽  
Strong Focus ◽  
Key Points ◽  
Expert Analysis ◽  
The Law ◽  
Unfair Terms ◽  
Compensatory Damages ◽  
Contractual Rights

Driven by exposition of the leading cases, JC Smith’s The Law of Contract offers the perfect balance between accessibility and authority. The strong focus on cases guides the reader through the intricacies of contract law with expert analysis ensuring key points are clear. The text begins with an introduction to contractual rights and duties. It looks at objectivity in contract law, the formation of bilateral and unilateral contracts, contract as agreement, offeror and offeree, estoppel, legal relations, and the role of third parties. It also considers the terms of the contract, interpretation of the contract, implication and rectification, and exclusion clauses and unfair terms. It goes on to look at issues such as duress, undue influence, good faith, capacity, illegality, contractual assumptions, breach of contract, remedies and damages, and remedies beyond compensatory damages.

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