Brief Fact Summary.
Chodos (plaintiff) sued West Publishing Co. (defendant) for restitution.
Synopsis of Rule of Law.
A plaintiff can seek restitution for work performed under a contract, if they fully perform, and the consideration in the contract is not liquated debt.
Or, if one of the promises leaves a party free to perform or to withdraw from the agreement at his own unrestricted pleasure, the promise is deemed illusory and it provides no consideration.View Full Point of Law
Plaintiff was an attorney who specialized in the laws regarding fiduciary duties and entered into a contract with a publishing company to write and publish a treatise on fiduciary duties. While the plaintiff was in the process of writing the treatise the publishing company was sold to the defendant. After the plaintiff had spent countless hours on the treatise the defendant rejected the work because of marketing and economic concerns, and in fact the defendant admitted the work was premium quality. Plaintiff sued seeking restitution for the hours he spent working on the treatise.
Whether a plaintiff can seek restitution for work performed under a contract, if they fully perform, and the consideration in the contract is not liquated debt.
Yes. A plaintiff can seek restitution for work performed under a contract, if they fully perform, and the consideration in the contract is not liquated debt.
On appeal. The plaintiff argues that the contract between himself and the defendant is illusory and in the alternative, argues breach of contract and seeks restitution. An illusory contract leaves room for one party to leave or terminate the agreement at anytime. However, all contract contains an implied covenant of good faith and fair dealing which provides an obligation for contracting parties to objectively and in good faith determining if performance under the contract is acceptable. Thus, the defendants promise was not illusory. Here, the defendant rejected the treatise in good faith because of the marketing and economic problems with publishing the book. However, the defendant breached the contract because their rejection was required to be based on form and content of the book, and they admitted the book was high quality, thus they cannot reject it because of economic and marketing reasons. The book was high quality in terms of the form and content and therefore, according to the contract they cannot reject it. While ordinarily a plaintiff must go after ordinary damages if they have fully performed under the contract, they may seek restitution if the consideration is something other than liquated debt, as is the case here. Plaintiff is entitled to restitution.