Brief Study On Restitution In Contracts

When a contract becomes void, the party who has received any benefit under it must restore it to the other party (or) must compensate the other party by the value of the benefit. This restoration of the benefit is called ‘restitution’. The principle of restitution is that a person who has been unjustly enriched at the expense of another is required to make restitution to that other. In essence, restitution is not based on the loss to the plaintiff but is on benefit which is enjoyed by the defendant at the cost of the plaintiff which is unjust for the defendant to retain.

Example: ‘A’ pays ‘B’ Rs.1000/- in consideration of ‘B’s promise to marry ‘C’, ‘A’s daughter. ‘C’ is dead at the time of promise. The agreement is void but ‘B’ must repay ‘A’ Rs.1000/-.