WPI 303.08 Contract—Damages

Use this instruction when restitution or restoration of the benefit conferred is an appropriate measure of damages, and the judge has elected to submit the issue to the jury. See the Comment below. Substitute the injured party for the bracketed plaintiff, and the party receiving the benefit or unjust enrichment for the bracketed defendant.

Use the second and/or third paragraph depending on the measure of damages the judge has elected to submit to the jury.

Use the last bracketed sentence of the second paragraph when restitution will be submitted to the jury and is sought in lieu of an unenforceable or cancelled contract.

Use other bracketed sections as appropriate.

This instruction may appropriately be combined with WPI 301A.02 (Quasi Contract), but it may also be used as an alternative remedy for breach of contract; see the Comment below.

This instruction has been modified for this edition to define “restoration of the benefit,” and to clarify that the judge should determine the measure of damages to be submitted to the jury.

Although generally an equitable remedy, the court may elect to submit the issue to a jury because there is a mixture of equitable and legal issues in the case, or in order to obtain an advisory ruling.

Contract implied in law/quasi contract/action for restitution/action for unjust enrichment. A contract “implied in law,” or quasi-contract, is also called an action for restitution, or an action for unjust enrichment. Young v. Young, 164 Wn.2d 477, 191 P.3d 1258 (2008); Davenport v. Wash. Educ. Ass'n, 147 Wn.App. 704, 197 P.3d 686, 697 (2008); Auburn Mech., Inc. v. Lydig Constr., Inc., 89 Wn. App. 893, 951 P.2d 311 (1998). Cases rely on both the law of contracts, Restatement (Second) of Contracts §§ 370–71, and the Restatement (Third) of Restitution and Unjust Enrichment (2011). Restitution and unjust enrichment are both substantive bases of liability and methods of recovery. Davenport, 147 Wn.App. 704; Young, 164 Wn.2d 477.

Restitution has been described as:

Bill v. Gattavara, 34 Wn.2d 645, 650, 209 P.2d 457 (1949); see Davenport, 147 Wn.App. 704 (retention by teachers' union of agency-shop fees deducted from salaries of nonmembers in order to finance political expenditures gave rise to claim for restitution).

This obligation may be contrary to the intention of either one, or both, of the parties. Chandler v. Wash. Toll Bridge Auth., 17 Wn.2d 591, 601, 137 P.2d 97 (1943).

Measure of damages—contract implied in law/quasi contract/action for restitution/action for unjust enrichment. The Restatement (Second) of Contracts defines a party's “restitution interest” as “having restored to it any benefit that it has conferred on the other party.” Restatement (Second) of Contracts § 370 cmt. a (1981). Section 371 defines the value to the receiving party as either (a) the value of what it would have cost the receiving party to obtain the benefit from someone in claimant's position or (b) the extent to which the value of the receiving party's property or interest has been increased. Restatement (Second) of Contracts § 371 (1981). In Young v. Young, 164 Wn.2d. 477, 191 P.3d 1258 (2008), the benefit conferred to defendant by plaintiff's improvement to her land was either the amount defendant would have had to spend to obtain the benefit elsewhere ($760,382) or the extent to which the defendant's property was increased in value or her interests advanced ($750,000–$1,050,000). Because of the equitable nature of these causes of action, there is a question whether there is a role for a jury in deciding them. Washington courts have not decided whether the judge must select only one measure of damages to submit to the jury. See Comment to WPI 301A.02 (Quasi Contract).

A person confers a “benefit” upon another if he or she: performs services beneficial to, or at least at the request of, the other; gives to the other possession of or interest in money, land, chattels or choses in action; or, satisfies a debt or duty of the other; or in any way adds to the security or advantage of the other. Chandler, 17 Wn.2d at 602–03. Nevertheless, even when a person has received a benefit from another, he or she is only liable to pay for it when the circumstances are such that between the two, it is “unjust” to retain it without paying restitution. Chandler, 17 Wn.2d at 601.

Quantum meruit/contract implied in fact. Quantum meruit denotes recovery for the value of services or materials provided under an actual implied-in-fact contract where: 1) the defendant requests the work; 2) plaintiff expects pay for the work; and 3) defendant knows or should know plaintiff expects pay. Quantum meruit means literally “what he deserves” or a reasonable amount for work done. Under a contract implied in fact, recovery is limited to the value of services rendered. Young, 164 Wn.2d. 477.

Quantum meruit has been allowed when one party's performance occurs in the absence of a contract, Losli v. Foster, 37 Wn.2d 220, 222 P.2d 824 (1950), or when a substantial change not within the contemplation of the parties occurs with a resulting benefit to one and expense to the other. Heaton v. Imus, 93 Wn.2d 249, 608 P.2d 631 (1980).

Recovery in quantum meruit was denied when the plaintiff had performed services under a contingent contract with another, with benefits incidentally conferred upon the defendant. The plaintiff did not receive payment for the services when the contingency did not materialize, but that was a risk for which he had contracted. Chandler, 17 Wn.2d at 601.

Alternate remedy for breach of contract. In a pre-U.C.C. case, the court found that a buyer of a product that is not as warranted by the seller may elect to rescind the contract, refuse the product, and recover any money paid on the purchase price, or in freight, in restitution. This is an alternative remedy to accepting the product and offsetting the purchase price with damages resulting from the breach. Houser & Haines Mfg. Co. v. McKay, 53 Wash. 337, 101 P. 894 (1909).

Restitution is not available for breach of a fully performed contract when the only outstanding performance is the payment of money. Restatement (Second) of Contracts § 373(2) (1981); Kofmehl v. Baseline Lake, LLC, 177 Wn.2d 584, 305 P.3d 230 (2013) (trial court erroneously dismissed claim for return of earnest money when evidence conflicted as to whether vendor was ready, willing, and able to perform). The basic aim of restitution is to place the plaintiff in the same economic position as he or she enjoyed prior to contracting. DeWolf, Allen, & Caruso, 25 Washington Practice, Contract Law and Practice § 14:7 (3d ed.).

For a detailed discussion of damages issues, see DeWolf, Allen, & Caruso, 25 Washington Practice, Contract Law and Practice ch. 14 (3d ed.). See also the Restatement (Third) of Restitution and Unjust Enrichment (2011).