Law Commons^™

Restitutionary Disgorgement As A Moral Compass For Breach Of Contract, Caprice L. Roberts

Caprice L. Roberts

A quiet revolution is underway. A new rule proposed in the forthcoming Restatement (Third) of Restitution seeks to deter conscious wrongdoers from retaining profits from “opportunistic” breaches of contract. The proposed disgorgement remedy for defendant’s opportunistic breach of contract will have fundamental consequences for contract theory and practice. This contractual remedy is gain-based rather than compensatory. Restitutionary disgorgement, rooted in unjust enrichment, may shift the conventional paradigm of contract law. This article examines whether a restitutionary disgorgement remedy for certain breaches of contract is compatible with traditional contract principles such as Justice Holmes’s choice principle. Recall his oft-repeated declaration, “The …