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Contents

Book cover for The American Law Institute: A Centennial History The American Law Institute: A Centennial History

There has been much debate over time about whether the American Law Institute (ALI), and in particular its Restatement projects, should aim at collecting, describing, and rationalizing predominant rules of law within a field, or should aim instead at social reform though law.1 The first of these is a doctrinal and analytical effort; the second is a moral or political effort. The choice of approach depends on the aspirations of those working on the project.

From its inception, however, the series of Restatements leading to the Restatement (Third) of Restitution and Unjust Enrichment has been different. Rather than fine-tuning prevailing doctrine or reshaping it to meet social needs, the aim of these projects, through three incarnations, has been to study a seemingly disparate set of legal claims and draw out their common rationale: the principle that one person should not be unjustly enriched at another’s expense. In other words, the primary role of the restitution Restatements has not been to clarify legal doctrine or to support legal, social, or political change, but to make and defend a theoretical insight into the nature and functions of the common law.

The first Restatement in the restitution series was published in 1937.2 It combined the work of Reporter Warren Seavey on Quasi-Contract with the work of Reporter Austin Scott on Constructive Trusts and related equitable remedies. The great legal advance made in this Restatement was the insight that these two substantively and procedurally disparate sets of claims rested on the much broader ground of relief against forms of unjust enrichment. A second Restatement of the subject, partially compiled in the 1980s by Reporter William Young, was abandoned in favor of a broader project on remedies that ultimately proved too complex. That might have been the end of the line for restitution as a Restatement topic, if not for a contested decision to revive the subject in the 1990s.

The product of that decision is the Restatement (Third) of Restitution and Unjust Enrichment, assembled by Reporter Andrew Kull and published in 2011.3 The third Restatement is an ambitious two-volume set designed to clarify, expand, and update the central insight of the first Restatement of Restitution, that prevention of unjust enrichment is in fact a cornerstone of American law. It offers a comprehensive description of the role that unjust enrichment plays in private law, explained in modern terminology that is readily understandable by lawyers and judges.

As of 1930, the ALI was planning separate Restatement volumes on the topics of Trusts and Quasi-Contracts, with Quasi-Contracts to be managed by Warren Seavey and Trusts by Austin Scott (both Seavey and Scott were members of the faculty at Harvard). In 1933, the ALI announced rather suddenly that it had decided instead to commence work on a volume covering “two closely related subjects, Quasi-Contracts and Constructive Trusts which together cover ‘Restitution and Unjust Enrichment.’ ”4 At the time, the combination of these topics was surprising and the proposed title was mysterious. Quasi-contracts were a procedural device developed in English law to give relief against various forms of wrongdoing, including both failure to honor informal promises and wrongful takings of money or other property. Constructive trusts were a conceptual device developed by equity courts to allow recovery of products and proceeds of wrongdoing. Initially the constructive trust remedy was used against defaulting fiduciaries; later it was used against any person shown to be in possession of money or property that ought to belong to someone else.

The great insight reflected in the ALI’s newly announced Restatement project was that these two quite different legal devices were linked by a common objective, to prevent one person from profiting unjustly at another person’s expense.5 In other words, the project aimed to construct from relatively obscure materials a new foundation for legal claims between parties, which did not depend on the presence of a legally binding contract or act of legally wrongful harm. Restitution—meaning, roughly, a legal obligation to yield up value that ought to belong to someone else—was presented as an independent basis for legal claims, comparable to agreed exchange or tortious conduct but grounded instead in the conceptually independent principle of unjust enrichment. Although the legal category of restitution, and the unjust enrichment principle that supported it, were inferred from existing remedial patterns, the claim that restitution constituted an independent ground for legal relief was a major change in traditional understandings of the rights and duties that make up private law.6

Seavey and Scott understood the jurisprudential significance of what they were doing. In an article published immediately after the publication of the first Restatement, they wrote that “because of the way in which the English law developed, a group of situations having distinct unity has never been dealt with as a unit and because of this has never received adequate treatment.”7 This proposition almost immediately gained support among lawyers, judges, and academics in the United States (although it was ignored in England for another generation).

Sometime in the later stages of preparation of the first Restatement addressing restitution and unjust enrichment, the Reporters made what was probably a mistake: they dropped the term “Unjust Enrichment” from the original title, retaining only “Restitution,” “a word which to the best of our knowledge is not used as a title in any law digest or treatise.”8 They explained this choice on the ground that “Restitution” connotes “the right to recover back something which one once had.”9 Restitution, however, had no settled meaning in legal vocabulary and was not a ground for legal relief in the manner that “tort” and “contract” are grounds for relief. Nor was it fully descriptive of the contents of the Restatement: unjust enrichment remained the motivating principle and the scope of the claims described in the body of the Restatement was significantly broader than recovery of particular assets.10 A fuller title might have headed off later confusion about the scope and importance of the volume.

Title problems notwithstanding, the Restatement of Restitution was a pathbreaking addition to American legal literature. The insight that unjust enrichment plays a fundamental role in law, however, did not originate with Seavey and Scott. Its origins go back as far as Roman law, which incorporated a limited idea of relief based on unjust enrichment. From Rome, the idea of unjust enrichment made its way into European civil law in Germany and elsewhere, again in a relatively limited way.11 In eighteenth-century England, Lord Mansfield recognized something like a principle of unjust enrichment when he held that an advantage-taker was required by “the ties of natural justice” to refund money recovered on technical grounds in a contract action.12

English courts did not follow up, but as time went on American judges were more receptive to claims of unfair gain.13 By the end of the nineteenth century, American academics had begun to focus on the possibility of legal claims based on unjust enrichment, independent of tort or contract. Andrew Kull traces early academic interest in unjust enrichment as a ground for legal relief to James Barr Ames, a legal historian and one of five members of the Harvard Law School faculty.14 Ames taught and wrote in the 1880s, fifty years before the ALI began work on the Restatement of Restitution. During that period, he published several articles linking equitable remedies such as constructive trusts, as well as quasi-contract remedies given by law courts, to the underlying principle that one person should not be unjustly enriched at the expense of another.15

It seems, then, the notion of unjust enrichment as a ground for relief, and the specific connection between unjust enrichment and the forms of legal relief later considered by Seavey and Scott in the first Restatement of Restitution, had been circulating for some time among American scholars and, as Kull suggests, was known to American lawyers and judges.16 The role played by Seavey and Scott was, first, to collect and formalize the various forms of relief for unjust enrichment found in American law, lay them out, and give them a name (“Restitution”). More importantly, by collaborating to include these forms of relief in a single Restatement, they formalized Ames’s insight and demonstrated that unjust enrichment stands alongside tort and contract as a foundational category in American private law.

As presented by Ames and later in the Restatement, restitution based on unjust enrichment was an invented class of legal claims, assembled from a variety of fictions that previously had enabled courts to give relief but were difficult to explain on reasoned grounds. From the outset, however, the underlying idea of legal relief against unjust enrichment was not problem-free. Seavey and Scott demonstrated that unjust enrichment stood apart from tort and contract as an independent ground of relief, but the restitution claims they described also provided an alternative to compensatory damages for wrongdoing or breach. Thus, while the Restatement provided significant new insights into the range of legal rights arising from private interaction, it also raised new questions about when and to what extent unjust enrichment gives rise to a claim. Some recoverable enrichments are products of mistake rather than unfairness, some unjust distributions do not and probably should not support legal remedies between parties.

On the remedial side, the concept of restitution based on unjust enrichment provided a rationale for quasi-contract claims and tracing remedies such as constructive trusts and subrogation, but it left important details to be determined. In simple cases, the plaintiff’s loss is equivalent to the defendant’s gain, so the restitution remedy is not puzzling. In other situations, the defendant’s gain may exceed plaintiff’s loss, or the plaintiff may have suffered no loss at all, or the defendant may not have realized a gain; in these instances the ideas of restitution and unjust enrichment pull apart and courts must make reasoned choices about how to allocate the assets at stake.17

The first Restatement of Restitution was published in 1937, less than four years after the project was launched. It was mainly well received, both by the American legal academy and by courts and lawyers. Citations were common, and courses in the new subject of Restitution were added to the curriculum in many law schools. Leading scholars specialized in the topic, most prominently John Dawson and George Palmer.18

The eloquent Professor Dawson, one of the few voices urging caution, described restitution based on unjust enrichment as an idea that was both attractive and dangerous if untamed:

To the person who has suffered loss, the loss alone is a grievance. But if this loss can be located and identified in the gain received by another, the anguish caused by the loss will be felt as more than doubled. One can see this, for example, in the system developed by Karl Marx, who tapped an inexhaustible supply of resentment … When we come to the narrower issues arising in disputes between individuals, we often find it possible to trace more directly the connection between losses incurred and gains received … [A] similar response can be expected, without any overtones whatever of social or economic reformism …19

At the same time, Dawson held out hope that the principle set out by the Restatement could be kept under control if approached with care:

We have done much and can do more to fortify ourselves. If we know the forest is enchanted we have not too much to fear.20

Despite early enthusiasm, the Restatement fell on hard times in the United States during the second half of the twentieth century.21 One difficulty was that the volume itself did not stray far from the models of quasi-contract and constructive trust. It began with a broad statement of the principle of unjust enrichment,22 and the Reporters’ preface stated that “the principles by which a person is entitled to restitution are the same whether the proceeding is one at law or in equity.”23 Yet the body of the work remained divided, presenting first the various grounds of recovery available through the fictitious procedures of quasi-contract and, second, the tracing remedies available in equity. Even at the time this was difficult material, not familiar to all lawyers, and it became less familiar as assumpsit fell out of regular use and courts of equity were merged procedurally with courts of law. Few modern lawyers are familiar with either the “common counts” or the fictions surrounding the Chancellors’ remedial powers.

Meanwhile, general changes were underway in American attitudes toward law and legal doctrine, beginning in academic circles. American Legal Realism was already a significant force in the 1920s and 1930s when the ALI embarked on its initial Restatement projects. Realism took a number of forms, not all compatible, but several themes stand out.24 Realists were opposed to what they called “mechanical jurisprudence” and suspicious of rules and other verbal formulae employed by courts. Most took the view that legal doctrine is rationally and causally indeterminate: rules of law neither justify nor explain judicial decisions. Instead, judges respond primarily to facts before them and facts about the world, whether or not those facts are picked out as relevant by applicable legal rules.25

Initially, many prominent Realists took a dim view of the ALI and its Restatement projects.26 For example, Leon Green referred to the project to restate tort law as “hopeless,”27 and Charles Clark described the contracts project as “rigid.”28 Edward Robinson accused the ALI of thinking “that it can help simple-minded lawyers by giving an artificial and arbitrary picture of the principle in terms of which human disputes are supposed to be settled.”29

As time went on, antipathy between Realists and the ALI subsided. Prominent Realists became associated with ALI,30 and later Restatements reflected the influence of Realism on American law and legal scholarship. Realists continued to maintain that the traditional legal decision-making bore no relation to social and economic conditions in the world it purported to govern, but at least some Realists, such as Herman Oliphant, suggested that doctrine could be useful if amended in ways that invited judges to respond to relevant facts.31 An example of this idea put into practice is the prominent role played by “unconscionability” in the Restatement (Second) of Contracts,32 which followed the lead of Karl Llewellyn’s Uniform Commercial Code.33 For better or worse, unconscionability is an invitation to judges to engage in fact-specific judgment as they resolve disputes. Through mechanisms of this kind, the project of restating the law was able, at least by the second round of Restatements, to coexist with moderate forms of Realism and related approaches to legal doctrine.

The Restatement of Restitution was an innovative project, but it was not a Realist project. Its insight was an insight about the content of legal doctrine and, based on that content, about the objectives of private law. It introduced the term “Restitution,” and it relied on the very broad idea of unjust enrichment to describe a ground for legal relief between parties that did not depend on contract or tort. The content of unjust enrichment, however, was explained in terms of legal claims—specifically, ancient legal (and equitable) claims that relied heavily on procedural fictions. It was unlikely to appeal to Realists, and even less likely to appeal to partisans of later theoretical developments such as Legal Process, Critical Legal Studies, and Law and Economics. This left the brave Restatement of Restitution without a jurisprudential home in later twentieth-century America.

Another difficulty for the first Restatement was that various post-Realist academic and scholarly trends resulted in a general turn toward public law and away from private law. Theorists drawn to Critical Legal Studies not only lacked interest in the private side of law, they questioned whether private rights can exist independently of collective politics.34 Those drawn to Law and Economics were intensely interested in legal rules governing private transactions, but more for their effects on markets and maximization of societal wealth than for their effects on the individuals involved.35 Against this background, interest in a previously unrecognized legal justification for private claims waned, particularly when working examples relied on bygone procedural mechanisms.36 As the twentieth century proceeded, courses in Restitution were dropped from law school curricula, writing on restitution subsided, and law students were likely to graduate without encountering basic restitution concepts: “subrogation,” for example, might be a mystery unless they had chanced upon it in an insurance contract.37

The fate of restitution in other common law countries was quite different, although acceptance took some time.38 About three decades after the ALI published the first Restatement of Restitution, English scholars, judges, and lawyers embraced the new category of law, and their enthusiasm has never diminished.39 Robert Goff and Gareth Jones published the first edition of their treatise on Restitution in 1966 (citing the ALI Restatement in the first footnote); eight more editions followed, the latest in 2016.40 Peter Birks, a leading English scholar of restitution, followed in the 1980s with a series of books and articles applying intense scrutiny to the analytical structure of restitution and unjust enrichment.41 Scholars in other parts of the commonwealth have written voluminously on the subject and continue to follow restitution claims in the courts with great interest.42

Against the background of tepid interest in restitution in the United States and keen interest elsewhere, questions arose at the ALI in the 1970s about a possible Second Restatement of Restitution.43 Updates in other subjects had been underway during the 1960s and 1970s, and some of these, particularly in the areas of contracts and torts, overlapped with problems in restitution. The Director at the time, Herbert Wechsler, acknowledged the need but initially postponed the project for budgetary reasons; then in 1980 he commissioned Columbia professor William Young to begin work and appointed a number of eminent Advisers, including John Dawson and Dan Dobbs, both prominent scholars in the fields of remedies and restitution.

From this point onward, however, things went downhill. Young labored diligently, but problems, including the need to reconcile the new volume with modern procedural developments, changes in personnel at the ALI, a recalcitrant Adviser, and unruly meetings, slowed the project. In 1984, the project was suspended, and effectively ended, by the new Director Geoffrey Hazard.44

Suspension of the second Restatement almost spelled the end of restitution as a continuing Restatement topic. In 1987, Hazard commissioned a report on the possibility of a new restitution project from the eminent remedies scholar Douglas Laycock; Laycock strongly supported the idea.45 Hazard, however, requested an additional opinion from Dale Oesterle, who had written critically about established restitutionary tracing rules. Oesterle recommended replacing the restitution project with a new Restatement of Remedies, and for a time Hazard appeared ready to follow this plan and give up the prospect for a new volume on the topic of restitution.46Apparently, Laycock considered taking on the Remedies project but eventually concluded that it would be unmanageable, given the overlap with other topics.47 In any event, Hazard eventually reversed course, endorsed a Restitution project in 1996, and recruited Andrew Kull as Reporter. Preliminary work commenced in 1997.48

Fourteen years later, the ALI released the Restatement of the Law (Third) of Restitution and Unjust Enrichment. The aim of the third Restatement was to preserve but modernize the insight of the first Restatement, that legal claims between parties are not limited to claims based on wrongdoing (tort) or breach of a legally valid agreement (contract) but also include claims based on unjust enrichment alone. The revision was massive. Fiction-based forms of action were relegated to notes, historically equitable claims were no longer isolated from historically legal claims, and remedies were treated independently from grounds for relief.

The addition of Unjust Enrichment to the title of the volume was no accident: the Reporter had long believed that the last-minute deletion of “Unjust Enrichment” from the title of the first Restatement had been a mistake.49 Restitution originally had no legal meaning, and in the United States it had come to mean the category of claims described in the first Restatement. Unjust enrichment was more descriptive and provided a more promising basis for further development of the field, because it identified the basis for restitution claims. So the two were combined. The relation was loose because recovery in restitution does not always depend on an unjust enrichment, and does not always require a corresponding loss, but together the terms were sufficiently descriptive of what was covered and why.50

The new title also reflected a distinctly American approach to the subject matter. In the decades following publication of the first Restatement, most, though not all, commentators in England and the British Commonwealth had come to believe that the law of restitution and unjust enrichment should be tamed and rationalized by imposing a strict taxonomic order on the doctrinal rules it comprises. The term “restitution” describes a remedy, while the term “unjust enrichment” describes a ground for relief, and the conceptual line between the two should not be blurred or crossed. In the words of Peter Birks: “the word ‘restitution’ cannot stand in the same series as the words ‘contract’ and ‘tort.’ These words denote events which trigger legal responses while ‘restitution’ denotes a response triggered.”51 Further, in the interest of doctrinal symmetry, restitution must not overlap with other legal categories, particularly the category of contract law. From these premises, it followed that a Restatement of “Restitution and Unjust Enrichment,” with no clear conceptual line drawn between the two, must be a confused jumble of substantive grounds for relief and remedial rules that do not always match.52 In fact, Birks was sufficiently convinced of the logical divide between restitution and unjust enrichment that, part way through the project, he expressed his dim view of the third Restatement in a “Letter to America” published on the internet. Birks’s letter informed America and the world that the nascent third Restatement project failed to take account of the internal logic of restitution law, and as a result was analytically unsound.53

Fortunately for the vitality of the subject, the Reporter did not succumb to Birks’s pressure. The first Restatement had expressed, and the third Restatement now fully embraced, what has been called “the American big tent” view of restitution and unjust enrichment.54 Restitution is a somewhat unruly assortment of legal claims, based on but not always perfectly aligned with the motivating principle of unjust enrichment. It encompasses a wide array of claims that operate independently of tort and contract law but also sweeps in gain-based relief in the context of tortious wrongs and contractual disputes. Given this deliberately vague definition of the field of restitution, the new Restatement proceeded to enumerate with precision and care the various doctrinal applications of the unjust enrichment principle that state and federal courts had developed in the decades between the original and the sequel.

Throughout, the third Restatement remained faithful to the “big tent” approach. At first glance, the separate treatment of remedies in Part III of the third Restatement might suggest a distinction between unjust enrichment as a ground for relief and restitution as a method of enforcement, consistent with the dominant English approach to the subject. Analytically, however, the third Restatement did not sharply distinguish between the “restitution” and “unjust enrichment” elements of the material covered. Instead, it continued to treat “restitution” as the name given to a field of law and “unjust enrichment” as the principle that motivates most if not all of that field.55 To the extent of this small rebellion against excessive doctrinal precision, the effects of American Legal Realism may be at work even in a not-very-Realist work such as the Restatement (Third) of Restitution and Unjust Enrichment.56

For the most part, however, the third Restatement is not a Realist document. True to its heritage, it takes the body of law that lies behind restitution and unjust enrichment very seriously. It invites courts to decide restitution claims according to the patterns established in prior cases, rather than by intuitive conclusions about what is unjust in particular factual situations. This is evident in the Reporter’s extended commentary on the meaning of unjust enrichment in the introductory section of Volume I. The Reporter states:

A significant tradition in English and American law refers to unjust enrichment as if it were something identifiable a priori, by the exercise of a moral judgment anterior to legal rules. This equitable conception of the law of restitution is crystalized by Lord Mansfield’s famous statement in Moses v. Macferlan … : ‘the gist of this kind of action is, that the defendant, upon the circumstances of the case, is obliged by the ties of natural justice and equity to refund the money.“

In the Reporter’s view, however:

The concern of restitution is not, in fact, with unjust enrichment in such a broad sense, but with a narrower set of circumstances giving rise to what might more appropriately be called unjustified enrichment. Compared to the open-ended implications of the term ‘unjust enrichment,’ instances of unjustified enrichment are both predictable and objectively determined, because the justification in question is not moral but legal. Unjustified enrichment is enrichment that lacks an adequate legal basis: it results from a transaction that the law treats as ineffective to work a conclusive alteration in ownership reinterpreted by courts in particular situations as they arise; it is a legal concept to be applied consistently with the expectations generated by the pattern of its applications over time, and the Restatement that maps it is a Restatement of law.

Returning to Professor Dawsons’ advice: “If we know the forest is enchanted we have not too much to fear.”57

The lengthy and detailed description of the specific subject matter of restitution and unjust enrichment in the third Restatement is too extensive and varied to comment on usefully in this short history. The Restatement took fourteen years to complete and fills two volumes. It is true throughout to the insight of Ames, Seavey, and Scott that there is a law of restitution, based on unjust enrichment, which occupies a position in private law analogous to that of the law of tort and the law of contract. It continues cover restitution in the setting of tortious wrongdoing and contractual exchange as well as restitution based solely on unjust enrichment. Much of the specific substantive material, however, is new. Extensive Reporter’s Notes appear throughout, tracking judicial decisions over the nearly 75 years that passed between the publication of the first Restatement and the publication of the third.58 Altogether, the third Restatement was a remarkable achievement, especially for a sole Reporter.

Among the seventy sections included in the Third Restatement, there are a few flashes of Realism, although not many. An example is Section 28, governing claims by cohabitants following a break up. The section provides that if one cohabitant “owns a specific asset to which the other had made substantial, uncompensated contributions in the form of property or services,” the other may claim restitution “as necessary to prevent unjust enrichment.”59 Not surprisingly, this provision provoked lively debate in meetings of the Advisory Council: its effect is to delegate to judges the power to decide what is just and unjust in a particular fraught situation. Debates ensued, and judicial discretion ultimately prevailed.60 For the most part, however, the third Restatement opts for guidance rather than discretion, and backs up its guidance with concrete examples from decided cases.

A major difference between the third Restatement and the original Restatement prepared by Seavey and Scott is that the third Restatement is written for modern readers. Quasi-contract and the writ of assumpsit appear only in explanatory historical notes.61 Equity plays a role, but equity procedures are barely touched upon except as needed to describe the special judicial powers, inherited from separate courts of equity, that make tracing particularly effective as a means of capturing unjust enrichment.62 On the other hand, the range of legal settings in which restitution provides a ground for relief is much greater than the range identified in the first Restatement, and coverage is updated to reflect the modern transactional world. For example, in addition to rights between former cohabitants, the third Restatement addresses restitution claims in the context of class actions and common funds, restitution claims based on appropriation of intellectual property, and restitution claims in the vicinity of a murder.63 At the same time, the Reporter was careful throughout not to get too far ahead of the law: all of the illustrations (which number over a thousand) track real, decided cases.64

Was this a contentious Restatement project? The most strenuous objections came from English observers such as Birks who felt the project was overlooking important logical truths about the law of restitution and unjust enrichment.65 Internally, there were bound to be some turf wars, particularly in the neighborhood of contract law. Consistently, however, the polite but steady determination of the Reporter, the tactical ingenuity of veterans like Douglas Laycock, and the very significant diplomatic skills of Director Lance Liebman headed off any significant difficulty.

It remains to be seen whether restitution will recover as a field of study and a subject of scholarly commentary in the wake of the third Restatement. The utility of restitution as an element of private law is unquestionable, and the third Restatement provides an invaluable roadmap. Nevertheless, American law schools continue to emphasize the public side of law and to give less attention than they once did to legal encounters between individuals. One hopeful sign is a new casebook on Restitution and Unjust Enrichment, published in 2018 by Andrew Kull and Ward Farnsworth, which is now in use at a number of schools.66 Another is a “Developments in the Law” project on Unjust Enrichment, conceived and carried out by the editors of the Harvard Law Review, which examines both the intellectual history of restitution and unjust enrichment and a variety of modern applications.67

The Restatement of Restitution and Unjust Enrichment, as it has evolved over time, is a model Restatement project. The 1937 volume presented and defended the insight that unjust enrichment of one person by another provides a third basic ground of recovery in American law, in addition to tort and contact. Though clearly present in the law, this type of claim had gone unremarked for centuries as an independent basis for relief. The achievement was remarkable, and it generated a worldwide response from courts and commentators that continues in full force today.

The next important achievement of the Restatement of Restitution and Unjust enrichment, occurring in its third round, was to save the great insight of the first round from fading into obscurity. The third Restatement accomplished this by gathering an enormous amount of evidence to confirm that restitution is in fact an independent basis of legal liability and by translating the insight of the first Restatement into modern language with modern illustrations. By and large, it did so without either minimizing the role of doctrine in the manner of American Legal Realism or losing sight of the basic significance of the field in an effort to achieve perfect doctrinal symmetry among its various components.

Restitution is a project in which the ALI should take great pride. Not every restatement of law is likely to produce a major insight into the nature of private law, but this one did. Meanwhile, we should make an effort to teach the next generation of lawyers how to understand and use the rules of restitution and unjust enrichment that are laid out so carefully in the third Restatement.

Notes
1

A symposium on this much-discussed topic appears at 32 S. Ill. U. L.J. 32 (2007). Andrew Kull, Reporter for the Restatement (Third) of Restitution and Unjust Enrichment, wrote an entry in which he defended the restitution Restatements as an instance of “radical reconception” of an area of law rather than what is ordinarily thought of as law reform.

Andrew Kull, Restitution and Reform, 32 S. Ill. U. L.J. 83, 86 (2007)
.

2

 Restatement of the Law of Restitution: Quasi Contracts and Constructive Trusts (1937).

3

 Restatement of the Law (Third): Restitution and Unjust Enrichment (2011).

4

11 A.L.I. Proc. 335 (1934). Professor Kull reports that certain stenographic minutes of Advisers’ meetings, which might have shed light on the decision to combine Quasi-Contracts and Constructive Trusts in a Restitution volume, appear to have gone missing from the Harvard Law Library during a renovation.

Andrew Kull, Three Restatements of Restitution, 68 Wash. & Lee L. Rev. 867, 869 n.6 (2011)
.

5

Topic 1 of the first Restatement was titled “Underlying Principles.” In a note introducing the section, the Reporters explained that “[t]he rules stated in the Restatement of this subject depend for their validity upon certain basic assumptions in regard to what is required by justice in the various situation. In this [introductory section], they are stated in the form of principles since either they are too indefinite to be of value in a specific case, or, for historical or other reasons, they are not universally applied.” Restatement of Restitution ch. 1, Topic 1.

The first principle read as follows:

§1. Unjust Enrichment.

A person who has been unjustly enriched at the expense of another is required to make restitution to the other.

The comment then explained, rather unhelpfully, that “[a] person is unjustly enriched if the retention of the benefit would be unjust.” Id. §1 cmt. a.

6

 See, e.g.,

Douglas Laycock, The Scope and Significance of Restitution, 67 Tex. L. Rev. 1277, 1277–78 (1989)
.

7

 

Warren A. Seavey & Austin W. Scott, Restitution, 54 L.Q. Rev. 29, 29 (1938)
. This statement probably was technically correct, but it is somewhat misleading. “Restitution” had been used in the first Restatement of Contracts to describe an alternative remedy for breach involving restoration of value conferred. See  Restatement of Contracts § 247 cmt. a (1932) (“Restitution is a remedy that is available in many kinds of cases, breach of contract being only one of these. In some cases it may be the only available remedy. … In some cases it is an alternative remedy, as in the case of a tort whereby the defendant has been enriched at the plaintiff’s expense”). The term “restitution” also appeared in the famous 1936 article by Lon Fuller and William Perdue on the “reliance” interest in contract law. Fuller and Perdue described three interests protected by contract law, one of which was the “restitution” interest, which Fuller described as based on the principle of unjust enrichment.
L. L. Fuller & William R. Perdue Jr., The Reliance Interest in Contract Damages, 46 Yale L.J. 52, 53–54 (1936)
. It is at least debatable, however, whether the term “restitution,” as used in the setting of alternative remedies for breach of contract, described a form of relief based on unjust enrichment or simply an alternative remedy for breach. For the view that restitution as a remedy for breach should not be viewed as an instance of relief against unjust enrichment, see  Restatement (Third) of Restitution and Unjust Enrichment, supra note 3, ch. 4, Topic 2, Reporter’s Note to Introductory Note.

8

 Id.

9

 Id.

10

 See  Andrew Kull, Restitution and Unjust Enrichment, in  Research Handbook on Unjust Enrichment and Restitution, ch. 4, at 62–77 (Elise Brant, Kit Barker, & Simone Degeling eds., 2020) (lamenting the title change).

11

 See  

John P. Dawson, Unjust Enrichment: A Comparative Analysis (A Series of Lectures Delivered under the Auspices of the Julius Rosenthal Foundation at Northwestern University School of Law in April 1950), at 119–27 (1951)
.

12

Moses v. Macferlan, 97 Eng. Rep. 676, 681 (K.B. 1760).

13

 See  

Andrew Kull, James Barr Ames and the Early Modern History of Unjust Enrichment, 25 Oxford J. Legal Stud. 297, 311–316 (2005)
. In an impressively researched edition of Developments in the Law, editors of the Harvard Law Review trace the history of restitution in the United States, beginning with nineteenth-century American courts’ reliance principle of unjust enrichment.
Developments in the Law: Unjust Enrichment, 133 Harv. L. Rev. 2061, 2084–2100 (2020)
.

14

 See Kull, supra note 13, at 303.

15

 See  

James Barr Ames, Purchase for Value Without Notice, 1 Harv. L. Rev. 1, 3 (1887),
and James Barr Ames, The History of Assumpsit, 2 Harv. L. Rev. 53, 64 (1888), both described in Kull, supra note 13, at 302–05. Soon after Ames made the connection between quasi-contract and unjust enrichment, William Keener, a junior colleague of Ames, made a similar observation in a discussion of quasi-contract remedies. William A. Keener, Recovery of Money Paid Under Mistake of Fact, 1 Harv. L. Rev. 211, 211 (1887), cited in Kull, supra, at 305–07. Ames was likely familiar with both Roman and civil law doctrines referring to unjust enrichment, although his focus was on English and American doctrinal developments. On Roman and Civilian parallels, see generally Helen Scott, Comparative Taxonomy: An Introduction, in  Research Handbook on Unjust Enrichment and Restitution, supra note 10, at 145, 147–60. Ames’s role, and also the significant role of Ames’s colleague William Keener, is also discussed in Developments in the Law: Unjust Enrichment, supra note 13, at 2086–88. In the same era, Learned Hand also published an article referring to unjust enrichment and its relation to restitutionary remedies.
Learned Hand, Restitution or Unjust Enrichment, 11 Harv. L. Rev. 209, 209 (1896)
.

16

 See Kull, supra note 13, at 307–09 (citing journals, treatises, and cases). Interestingly, Seavey, in a short biography that combines reminiscences by Seavey with commentary by a former student at Harvard, indicates that in 1932, ALI Director William Draper Lewis gave Seavey a choice of subject matter for a new Restatement project. In response, Seavey suggested a Restatement “dealing with the question of payment for the value of a benefit. … There had been two ways of dealing with this, one in the law courts and one in the courts of chancery.” Seavey then “invited Scott, a colleague and reporter of Trusts, to work on the equity part. … There was no name for the combination but we finally christened it ‘Restitution’ …”

Warren A. Seavey & Donald B. King, Warren A. Seavey’s Life and the World of Legal Education 67 (2005)
. ALI records indicate that quasi-contract was subject of interest as early as 1930. See 8 A.L.I. Proc. 50–51 (1930).

17

 See Kull, supra note 10, at 63–64 (noting these inconsistencies and suggesting that they were exacerbated by the decision to drop “unjust enrichment” from the title of the first Restatement);

Doug Rendleman, Measurement of Restitution: Coordinating Restitution with Compensatory Damages and Punitive Damages, 68 Wash. & Lee L. Rev. 973, 981–90 (2011)
(discussing “giving up” and “giving back” and other puzzles affecting measurement of restitution).

18

 See, e.g.,

John P. Dawson & George E. Palmer, The Law of Restitution (1978)
;
John P. Dawson, Restitution Without Enrichment, 61 B.U. L. Rev. 563 (1981)
; Laycock, supra note 6. See generally Kull, supra note 4, at 869.

19

Dawson, supra note 11, at 5–6.

20

 Id. at 152.

21

The decline of restitution and unjust enrichment in the United States in the later twentieth century was recently noted by the editors of the Harvard Law Review, although they also observe some resurgence in recent years. And, of course, their own interest in the subject is very encouraging to those of us who view unjust enrichment as an important and feature of the private law. See Developments in the Law: Unjust Enrichment, supra note 13, at 94–98.

22

Section 1, at 12.

23

Introductory Note, at 4.

24

An excellent source on this subject is

Brian Leiter, American Legal Realism, in The Blackwell Guide to the Philosophy of Law and Legal Theory 50 (Martin P. Golding & William A. Edmundson eds., 2005)
. In his contribution to this volume, Robert Gordon discusses in detail the complex relationship between Realism, on the one hand, and the ALI and its Restatements, on the other. See Robert W. Gordon, Restatements and Realists, in this volume.

25

Leiter refers to this as the “sociological” branch of American Legal Realism. Id. at 54, 55–56. See, e.g., Herman Oliphant, A Return to Stare Decisis, 14 A.B.A. J. 107 (1928) (suggesting that decisions are responsive to social forces operating on judges).

26

 See generally  

Brian Leiter, Legal Realism & Legal Doctrine, 163 U. Pa. L. Rev. 1975, 1976 (2015)
.

27

 

Leon Green, The Duty Problem in Negligence Cases, 28 Colum. L. Rev. 1014, 1014 (1928)
.

28

 

Charles E. Clark, The Restatement of the Law of Contracts, 42 Yale L.J. 643, 650 (1933)
.

29

 

Edward S. Robinson, Law—An Unscientific Science, 44 Yale L.J. 235, 260–61 (1934)
.

30

A notable example is Charles Alan Wright, ALI President from 1993 to 2000 and an avowed Realist. See Leiter, supra note 26, at 1975–76. At least one of the Advisers to the first Restatement of Restitution, Edwin W. Patterson, appears to have been open to some of the Realists’ ideas. See  

Harry W. Jones, Edwin Wilhite Patterson: Man and Ideas, 57 Colum. L. Rev. 607
, 612–16 (1957) (suggesting, not too persuasively, that Patterson embraced a form of “moderate Realism”).

31

Oliphant, supra note 25, at 75; see Leiter, supra note 26, at 1977.

32

 Restatement (Second) of Contracts § 153 (unilateral mistake), § 208 (unconscionable contract or term) (1981).

33

 See UCC § 2-302.

34

Leiter, supra note 24, at 65. Leiter describes, skeptically, the Critical claim that because the government has authorized private activity, there can be no limits on government intervention in private activity. Id.

35

 See, e.g.,

Saul Levmore, Explaining Restitution, 71 Va. L. Rev. 65 (1985)
(analyzing restitution in terms of its economic effects).

36

In commentary published in 1998, John Langbein attributed the decline of restitution in the United States, in characteristically strong terms, to “the marginalization of private law” in the wake of Legal Realism and kindred trends.

John H. Langbein, The Later History of Restitution, in Restitution: Past, Present, and Future: Essays in Honour of Gareth Jones 57, 61–62 (W.R. Cornish et al. eds., 1998)
.

37

This is less likely in the few states, such as California, in which remedies, including multiple forms of restitution, are still tested on the bar exam. See  https://www.calbar.ca.gov/Admissions/Examinations/California-Bar-Examination/California-Bar-Examination-Scope.

38

For discussion of the differing modern attitudes toward restitution in the United States and England, see  

Chaim Saiman, Restitution in America: Why the U.S. Refuses to Join the Global Restitution Party, 28 Oxford J.L. Stud. 99 (2008)
.

39

For a concise analysis of how and why the topic of restitution and unjust enrichment succeeded so well in England and the Commonwealth, along with suggestions about why interest may have waned in the United States, see  

Andrew Burrows, Unjust Enrichment & Restitution, in The Oxford Handbook of the New Private Law 293, 294–301 (Andrew S. Gold et al. eds., 2021)
.

40

 

Robert Goff & Gareth Jones, The Law of Restitution (1966)
. Six of the further editions are titled The Law of Restitution; the final two are titled The Law of Unjust Enrichment.

41

 See, e.g.,

Peter Birks, An Introduction to the Law of Restitution (1985)
. Birks, and to a lesser extent other English scholars, focused attention on the precise relation between restitution and unjust enrichment. American scholars in the field of restitution have been content to view restitution as an invented term for a body of law and unjust enrichment as the central value at work within that body of law.

42

A prominent example is the recently published Research Handbook on Unjust Enrichment, which includes commentary from scholars from Australia, Canada, England, Hong Kong, Israel, Singapore, South Africa, and the United States. See Research Handbook on Unjust Enrichment and Restitution,  supra note 10. Other notable volumes (there are many) include

Robert Chalmers, Charles Mitchell, & James Penner, Philosophical Foundations of the Law of Unjust Enrichment (2009)
; and
Hanoch Dagan, The Law and Ethics of Restitution (2004
. A conference on “Rethinking Restitution: History, Sociology, Doctrine, and Theory” is planned for this September “in” Australia, with participants from around the world.

43

The story of the Second Restitution Restatement, as presented here, is based primarily on Kull’s thorough description in Kull, supra note 4, at 871–79.

44

Despite his discouraging experience with the ALI in the 1980s, Young later served as an Adviser to the Third Restatement. Kull, the Reporter, describes Young as a knowledgeable and hard-working Adviser who contributed greatly to the success of the project. Id. at 874.

45

 See id. at 876–77.

46

 Id. at 877–78.

47

 Id. at 878–79.

48

 Id. at 880.

49

 See Kull, supra note 10.

50

Edwin Patterson, an Adviser to the first Restatement, explained the compatibility of restitution and unjust enrichment this way: “that the two concepts do not exactly coincide will be relatively unimportant unless those who use the volume attempt to give them exact meaning and apply them deductively.”

Edwin W. Patterson, Book Review: Restatement of the Law, Restitution, 47 Yale L.J. 1420, 1421 (1938)
.

51

 

Peter Birks, An Introduction to the Law of Restitution 16 (1985
). At the time, Birks viewed restitution and unjust enrichment as coextensive, although analytically different in kind. In later work, he revised to some extent his structural analysis of restitution and unjust enrichment, taking the view that restitution (the remedial side) was narrower in scope than unjust enrichment (the remedial principle). See  
Peter Birks, Unjust Enrichment 3, 11 (2003)
.

52

The English view that Restitution and Unjust Enrichment are separate legal concepts appears to be the motivation for an alternative Restatement of the English Law of Unjust Enrichment, published by Andrew Burrows (now a justice of the English Supreme Court) closely on the heels of the ALI’s Restatement (Third) of Restitution and Unjust Enrichment. Burrow’s restatement, also composed with the assistance of a panel of academics, judges, and lawyers, states at the outset that:

A claimant has a right to restitution against a defendant who is unjustly enriched

A right to restitution is a right to the reversal of the defendant’s enrichment …

Andrew Burrows (Assisted by an Advisory Group of Academics, Judges, and Practitioners), A Restatement of the English Law of Unjust Enrichment (2012)
.

53

 See  

Peter B.H. Birks, A Letter to America: The New Restatement of Restitution, 3(3) Global Jurist Frontiers vol. 2 (2003), https://www.degruyter.com/document/doi/10.2202/1535-1653.1096/html
.

Bravely (or possibly mischievously), Reporter Kull includes a citation to Birks’s letter in the Reporter’s Notes to Section 1 of the Restatement. Restatement (Third) of Restitution and Unjust Enrichment, supra note 3, at 12, note a.

54

 

Elise Bant, Kit Barker, & Simone Degeling, The Evolution of Unjust Enrichment Law: Theory and Practice, in  Research Handbook on Unjust Enrichment and Restitution
, supra note 10, at 2.

55

The first note to Section 1 states:

The identification of unjust enrichment as an independent basis of liability in common-law legal systems—comparable in this respect to a liability in contract or tort—was the central achievement of the 1937 Restatement of Restitution … The use of the word “restitution” to describe the cause of action as well as the remedy is likewise inherited from the original Restatement, despite the problems this usage creates.

Restatement (Third) of Restitution and Unjust Enrichment § 1 cmt. a, at 3.

56

But cf.  

Lionel Smith, Legal Epistemology in the Restatement (Third) of Restitution and Unjust Enrichment, 92 B.U. L. Rev. 899, 908–09 (2012)
(suggesting that both the first and the third Restatements revealed Realist tendencies by suggesting that constructive trusts are simply remedial devices).

57

Dawson, supra note 20.

58

Interestingly, Professor Seavey reports in his autobiography that by the time the first Restatement was completed, he had amassed a great number of relevant cases, but the ALI rules in force at the time prevented him from citing them in the volume, “since the theory was that the Restatement was to be authoritative and that citing cases would make it an ordinary text book.” Seavey & King, supra note 16, at 67. Seavey objected to this limitation and persuaded the ALI Council to allow him to place a selection of cases in a pamphlet inserted in a slot inside the back cover. Id. at 68. Apparently, this is the origin of the Reporter’s Notes that now appear in Restatement texts. True to the tradition, the third Restatement displays an enormous number of reported cases, painstakingly assembled by Reporter Kull. On the initial rule against case citation and its evolution, see Deborah A. DeMott, Restating the Law in the Shadow of Codes: The ALI in Its Formative Era, in this volume.

59

 Restatement (Third) of Restitution § 28.

60

For commentary on this section and the controversy surrounding it at the time of its drafting, see, e.g.,

Doug Rendleman, Restating Restitution: The Restatement Process and Its Critics, 65 Wash. & Lee L. Rev. 933 (2008)
;
Chaim Saimon & Emily Sherwin, Love, Money, and Justice: Restitution Between Cohabitants, 77 U. Colo. L. Rev. 711 (2006)
.

61

 Restatement (Third) of Restitution and Unjust Enrichment § 4 cmts. a, b, e, § 70 cmts. b, c, e.

62

 Id. § 4 cmt. b.

63

 See id. §§ 28 (cohabitants); 29 (common funds); 42 (intellectual property), 45 (homicide).

64

One possible exception to the remark in the text, that the third Restatement never gets too far ahead of the law, is a section governing opportunistic breach of a contract. The gist of the section is that in certain situations involving a deliberate and profitable breach and a damage remedy that is unlikely to provide adequate relief, the claimant may recover profits the defendant realized as a result of the breach in place of damages for loss. Id. § 39.

65

Gareth Jones, of Cambridge, was quite the opposite—an exemplary participant who made many useful contributions.

66

 

Andrew Kull & Ward Farnsworth, Restitution and Unjust Enrichment: Cases and Notes (2018)
.

67

 Developments in the Law: Unjust Enrichment, supra note 13.

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