(iii) Giving Up Rights and Reinstatement of Obligations

Lodder[1] has identified an additional category of restitutionary remedy. He distinguishes between two types of enrichment, namely factual enrichment, which involves the receipt of a valuable benefit, and legal enrichment, which arises where the defendant has gained a right or has had an obligation discharged as a result of the claimant’s action. Where the defendant is enriched in this legal sense the remedy which is awarded operates either to defeat the right obtained or to reinstate the obligation discharged. For example, a right may have been created under a contract and the remedy which might be awarded arises from the vitiation of the contract so that the right is destroyed. Lodder considers such remedies to be restitutionary because removing a right or restoring an obligation involves the removal of a gain from the defendant.

The effect of this interpretation of gain-based remedies is to expand the ambit of the law of restitution to encompass remedies which may not have pecuniary consequences, such as the rescission of an executory contract[2] or rectification18 of a contract. This is controversial but, if correct, it means that the principles on which the award of restitutionary remedies is founded must also be used to explain when restitution of legal enrichment will be available and, if those principles are found wanting, they may need to be adapted to provide for this type of restitutionary remedy. Crucially, however, this type of restitutionary remedy can also be justified by reference to corrective justice, since the effect of the remedy is to correct an injustice between the claimant and the defendant. Although the extinction of a right appears not to give anything back to the claimant, the existence of the defendant’s right curtails the enjoyment of the claimant’s rights. Consequently, the extinction of a right can be considered to involve the deprivation of a benefit enjoyed by the defendant and a corresponding enhancement of the claimant’s own rights, meaning that the extinction of the right can legitimately be described as a restitutionary remedy, in that there is both a giving up of the defendant’s right and a consequent removal of the burden which would otherwise be suffered by the claimant. Similarly, where an obligation is reinstated, this involves the reversal of a benefit which had been enjoyed by the defendant, namely the extinction of a liability, and a corresponding benefit to the claimant, who now has a right which can be vindicated against the defendant.

  • [1] AVM Lodder, Enrichment in the Law of Restitution and Unjust Enrichment (Oxford: Hart Publishing,2012), ch 3. See also R Chambers, ‘Two Kinds of Enrichment’ in R Chambers, C Mitchell, and J Penner (eds),Philosophical Foundations of the Law of Unjust Enrichment (2009), ch 9, who distinguishes between enrichments as value and as rights.
  • [2] See p 22, below. 18 See p 21, below.
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