disgorging profits in Acme

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I'm having trouble understanding the concept of restitution in the Acme case. According to the principle of restitution, the defendant should be restored to the position he was in before the contract occurred. The P argued that this meant the D should be "disgorged of all profits," entitling the P to damages based on the higher price of wheat from which D profited ($1.16, as opposed to the $.97 contracted for). Right? Here's my question: The D didn't profit from the contract with the P in this case, he profited from a wholly different contract aside from the breached contract. How then can we presume that a remedy of restitution would give the P any relief if the breached contract was not related to the genesis of D's profit? Wouldn't the restitution be zero? Does this make any sense? Do I have this all wrong? Is this confusion why courts prefer the expectancy doctrine?

-- Anonymous, October 20, 1998


punishing the breacher

Rebecca: I asked the same question, worded slightly differently below (We must have posted them at almost exactly the same time, because I did not see yours when I started typing). I agree with you that it seems strange that the plaintiff could somehow be entitled to Johnson's profit from a completely separate contract. I don't understand how we can justify this under the restitution doctrine although Professor Lessig seemed to be saying that we could at the end of class in response to my question.

It seems to me that the justification for "disgorging the profit" has some origin in the idea that Johnson should pay for his "immoral act" in breaching the contract. If we agree with Holmes, this is a layperson's argument, not one to be made or accepted by judges (although Lumley suggests that perhaps it would be accepted by an English judge in the 19th century).

Like you, I am confused.


-- Anonymous, October 20, 1998

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