(ii) Defendant Entered into a More Profitable Contract

It has sometimes been suggested that gain-based remedies are appropriate where the defendant has breached the contract with the claimant in order to enter into a more profitable contract with someone else.^[1] Those who support this view tend to regard the decision of the Israeli Supreme Court in Adras Building Material Ltd v Harlow and Jones GmbH^[2] as representing the ideal solution to the problem. In Adras the claimant agreed to buy 7,000 tons of steel from the defendant. The defendant supplied some of this steel to the claimant, but it then received an offer from a third party to buy the remaining steel for a higher price. Consequently the defendant agreed to supply the remaining steel to the third party. The claimant sued the defendant for breach of contract and claimed that it should obtain restitution of the difference between the original contract price and the price obtained by the defendant from the resale to the third party. A majority of the Supreme Court found for the claimant and recognized a general right to the award of restitutionary damages whenever the defendant obtained a benefit as a result of a breach of contract. But great care must be taken before the restitutionary principles recognized in Adras are transplanted into English law, primarily because the approach of Israeli law to breach of contract is fundamentally different from that of English law. For Israeli law expects contractual promises to be performed and it is for this reason that, as was recognized in Adras itself, the general remedy for breach of contract is specific performance. On the other hand, the attitude of English law to the binding nature of promises is much more ambivalent. In England when the defendant breaches a contract the usual remedial response is to award damages and only certain types of contract are specifically enforceable.^[3] This fundamentally different attitude means that, although the unrestricted award of restitutionary damages might be entirely appropriate in Israel, this is not necessarily the case in England, particularly because it does not necessarily follow that compensatory damages are an inadequate remedy.

• [1] See especially Barnett, Accounting for Profit for Breach of Contract, ch 4, who advocates an account of
• [2] profits in such circumstances only where specific relief is no longer available and the promisor has made aprofit: ibid, 117. 90 (1988) 42 (1) PD. See [1995] RLR 235.
• [3] Co-operative Insurance Society Ltd v Argyll Stores (Holdings) Ltd [1998] AC 1, 11 (Lord Hoffmann).