Restitution Damages
What does "Restitution Damages" mean in law?
Restitution damages are measured by the value of the benefit conferred upon the breaching party, with the goal of preventing unjust enrichment rather than compensating the plaintiff's loss. This remedy differs from expectation and reliance damages because it focuses on the defendant's gain rather than the plaintiff's loss. Restitution may be elected as an alternative to expectation damages when the contract price undervalues the benefit conferred, and it is the primary remedy in quasi-contract and unjust enrichment claims where no valid contract exists. The benefit is typically measured either by the reasonable market value of the services rendered or by the extent to which the defendant's property was increased in value.
Definition
Restitution damages are measured by the value of the benefit conferred upon the breaching party, with the goal of preventing unjust enrichment rather than compensating the plaintiff's loss. This remedy differs from expectation and reliance damages because it focuses on the defendant's gain rather than the plaintiff's loss. Restitution may be elected as an alternative to expectation damages when the contract price undervalues the benefit conferred, and it is the primary remedy in quasi-contract and unjust enrichment claims where no valid contract exists. The benefit is typically measured either by the reasonable market value of the services rendered or by the extent to which the defendant's property was increased in value.
Example
After a homeowner wrongfully terminated a contractor who had completed 80% of a renovation, the court awarded restitution damages equal to the reasonable market value of the work already performed, even though it exceeded the pro-rata contract price.