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a. “Restitution” distinguished: Many writers refer to a quasi-contractual recovery as “restitution.” The term “restitution,” however, is also used to denote a certain measure of damages that may be awarded in suits on a contract, namely, the award to the plaintiff of the amount by which his performance under the contract benefited the defendant. In order to avoid confusing these two very distinct uses of “restitution,” the term “restitution” will be used here only to refer to this measure of damages in contract actions. “Quasi-contract” will be the term used to refer to recovery off the contract. “Restitution” is discussed infra, p. 320.
B. Law/equity distinction: Another crucial distinction to keep in mind is that between remedies at law and remedies in equity. Equitable remedies for contract breach, and how they differ from legal remedies, are discussed in a separate major section beginning immediately below.
A. Equitable relief generally: The usual remedy for breach of contract is money damages awarded by a court to the aggrieved party. However, there are some situations in which money damages cannot adequately compensate the aggrieved party. This may be the case where the damages are too speculative or uncertain to be calculated, where damages are simply not a substitute for the defendant’s performance of the contract (as where the defendant breaches a contract to sell a particular piece of land to the plaintiff), or where it is likely that a damage award could not be collected. In these situations, it may be appropriate for the court to grant equitable relief.
1. Unified system: Historically, equitable relief was granted by an entirely different system of courts (the courts of equity) than was the granting of money damages (which was done by the common-law courts). In America today, however, nearly all states have unified the common-law and equity courts, so that the same court may award either damages or equitable relief.
2. Types of equitable relief: There are two types of equitable relief that are relevant to contract cases. These are specific performance and injunctions. A decree for specific performance orders the promisor to render the promised performance. An injunction directs a party to refrain from doing a particular act.