D.

THE RELIANCE AND RESTITUTION INTERESTS

6

in full; I reject plaintiff's contention that the server crash was an event beyond
its reasonable control, especially given the absence of any evidence that the server
was under the control of some third party. Nevertheless, Telespectrum
partially performed its obligations under the contract, and is entitled under
the terms thereof to be paid for the work that was completed in a satisfactory
manner. Under Texas law, which governs this contract,"the principle of unjust
enrichment suggests that restitution is an appropriate remedy in circumstances
where the agreement contemplated is..not fully perforrmed." City of Harker
Heights u. Sun Meadows Land, Ltd, 830 S.W.2d 313, 319 (Tex. App. 1992)
(emphasis added); see also RESTATEMENT(SECOND) Op CoNTRACTS§374(1981)("If
a party justifiably refuses to perform on the ground that his remaining
duties of performance have been discharged by the other party's breach, the
party in breach is entitled to restitution for any benefit that he has conferred by
way of part performance or reliance in excess of the loss that he has caused by
his own breach.").

"Since the party seeking restitution is responsible for posing the problem of
measurement of benefit, doubts will be resolved against him and his recovery
will not exceed... the other party's increase in wealth.”RESTATEMENT(SECOND)
OF CoNTRACTSS374 cmt.b(1981). I conclude, therefore, that Grace Marie must pay
to plaintiff that portion of what it was paid by its clients that is attributable
to Telespectrum's services. Grace Marie was paid $828,164 by its clients. Its profit
or "margin"on this amount was $282,123. In addition, Grace Marie discounted
its services in light of Telespectrum's breach in the amount of$162,950.My
preliminary calculation of the restitution owed to Telespectrum, therefore, is as
follows:$828,164 less $282,123 less $162,950 less the $213,801 which Grace
Marie has already paid, for a total of $169,290.

[3] Quasi Contract

ANDERSON v.SCHWEGEL
Idaho Court of Appeals
796 P.2d 1035 (1990)

WALTERS, J.

In April of 1980, George Anderson and Ronald Schwegel met to discuss the
possibility of restoring Anderson's 1935 Plymouth automobile. Following a brief
inspection of the vehicle, the parties orally agreed that Schwegel would restore
the automobile for $6,000.However, each of the parties had a different
understanding of what was meant by the term"restore."Anderson understood
"restore" to mean the complete restoration of the car, except for upholstery, and
including body work and engine repairs. In contrast, Schwegel intended that,
for $6,000, he would "restore" only the body of the automobile, including
painting, but that any engine work that might be needed would be an additional
expense. The parties did not attempt to reduce their agreement to writing, and
neither of them was aware of the misunderstanding. Schwegel had the vehicle
towed to his shop and began the restoration work.
In 1981, Schwegel informed Anderson that substantial engine work was needed
694 REMEDIES
CH.8

to make the vehicle driveable. Upon Anderson's instruction, Schwegel sublet

the repair work to K & F Automotive Shop. Anderson discussed the nature and
extent of the repairs with K& F's shop proprietor, and, without questioning
whether the engine repair costs were included in the original $6,000 quoted by
Schwegel, gave his authorization for the work to proceed.
In December of 1982, Anderson received an itemized statement of the
work completed as of that date. The statement listed amounts for the body
work performed by Schwegel, but also included costs for parts and labor attributed
to the engine overhaul. Although the statement exceeded the $6,000 price agreed
upon by more than $2,000, Anderson expressed no disagreement with it. In fact,
Anderson subsequently tendered a payment of $2,000 in addition to $3,000 he
already had paid.
Later, the parties had another conversation concerning Anderson's desire
to make the automobile roadworthy, a task requiring the repair or replacement
of gauges, wires, glass and lights, among other items. Anderson assented to having
the work done. Schwegel sublet the mechanical work to Rick Vance Auto but
also performed some of the work at his own shop.
The final billing included $5,896.01 for body work by Schwegel;$2,184.57 for
the engine overhaul by K& F;and $1,719.69 for the"roadworthy" repairs, for a
total of $9,800.27. Anderson previously had tendered payments to Schwegel
totaling $5,000.When Schwegel demanded payment of the additional balance of
$4,800.27, Anderson refused, stating that the contract was for $6,000, and that
only $1,000 remained due. Anderson then filed this action seeking to enforce the
contract price of $6,000 and to recover possession of the Plymouth. Schwegel
counterclaimed to recover the full amount owing on the bill.

Following a trial without a jury, the magistrate determined that the parties
had failed to reach a "meeting of the minds" on the meaning of the material
term "'restore,"and thus no contract existed between them. However, the
magistrate held that Anderson was liable to Schwegel under quasi-contract,
permitting Schwegel to recover $4,800.27 for the reasonable value of services
and materials retained by Anderson. On appeal by Anderson to the district court,
the magistrate's judgment was affirmed. Anderson then brought this appeal from
the district court's decision
The issue on appeal concerns the measure of recovery under quasi-
contract, a contract implied in law. As the Idaho Supreme Court has explained:
[A] contract implied in law is not a contract at all, but an
obligation imposed by law for the purpose of bringing about justice and
equity without reference to the intent or the agreement of the parties and,
in some cases, in spite of an agreement between the parties.(Citations
omitted.) It is a non-contractual obligation that is to be treated
procedurally as if it were a contract, and is often referred to as quasi
contract, unjust enrichment, implied in law contract or restitution....

...As the essence of a contract implied in law lies in the fact that
the defendant has received a benefit which it would be inequitable for
him to retain, it necessarily follows that the measure of recovery in a
quasi-
D. THE RELIANCE AND RESTITUTION INTERESTS 695

contractual action is not the amount of the enrichment, but the

actual amount of enrichment which, as between the two parties, it would be
unjust for one party to retain. Continental Forest Products, Inc. u
Chandler Supply Co., 95 Idaho 739, 743, 518 P.2d 1201, 1205 (1974).
As a corollary, the amount of recovery to be obtained in quasi-contract is a
factual issue for resolution by the trier of fact. Here, the magistrate measured the
benefit that Anderson unjustly retained as the reasonable value of the services he
received from Schwegel, and awarded to Schwegel a recovery in that amount.
Anderson disputes that award, maintaining that the proper measure of recovery
in this case should have been the increased value of the automobile which
resulted from the services, rather than the reasonable value of those services
conferred.
We note that in cases where restitution is available for mistaken
improvements to another's property, the usual measure of recovery is the value to
the property of the enhancement.
Here, Anderson either requested the services or assented to having
them performed for his own benefit. Thus, the performance rendered may be
properly valued as services, regardless of whether the services actually enhanced
the value of the automobile. We conclude that upon these facts, the magistrate did
not err in valuing the benefit conferred as the reasonable value of the services
provided.
Anderson also contends that the magistrate improperly allowed Schwegel
to recover the twenty percent mark-up he charged on some of the sublet work.
We note that the correct measure for unjust enrichment is not the loss suffered by
one party, but rather is the benefit unjustly retained by the other party. The
magistrate found that the amount billed by Schwegel, including the mark-up,
represented the reasonable value of the benefit received by Anderson. In the
absence of clear error, these findings must be sustained.
Anderson further maintains that, although the magistrate entered findings as
to the total benefit received by Anderson, the judge failed to expressly determine
that portion of the benefit which Anderson"unjustly" retained, and that the
judgment must therefore be reversed. We observe that the magistrate found the
total benefit received by Anderson to be $9,800.27, the reasonable amount of all
the services received. The parties stipulated to the fact that Anderson had, prior
to trial, made payments totaling $5,000.Thus, the $4,800.27 awarded to Schwegel
is the difference between the total benefit received and the amount already paid
to Schwegel. This sum clearly represents the amount of enrichment which the
magistrate found would be unjust for Anderson to retain. The magistrate's
findings, affirmed by the district court, are supported by substantial evidence and
we will not disturb them on appeal.

NOTES
(1) According to R.M.Williams Co., Inc. u Frabizzio, 1993 Del. Super.
LEXIS 55,*44(1993):
The modern suit for restitution in quasi contract, or under a
contract implied in law, as it is sometimes described, is based on the
principle that, "A person who has been unjustly enriched at the
expense of another is
696 REMEDIES CH.8

required to make restitution to that other:"RESTATEMENT OF

RESTITUTIONS1 (1937). Pomponius stated a similar principle in the
second century A.D.: "For this by nature is equitable, that no one be
made richer through another's loss.”*** Unjust enrichment is defined
as "the unjust reten- tion of a benefit to the loss of another, or the
retention of money or property of another, against the fundamental
principles of justice or equity and good conscience."The separate cause
of action for"unjust enrichment" is the doctrinal descendant of the old
common law action in general assumpsit, as opposed to a common law
action in special assumpsit for breach of contract where no money
remained due.
(2)"The theory on which the plaintiff in this suit seeks money damages —
unjust enrichment, sometimes referred to as restitution, a contract implied in
law, quasi contract, or an action in assumpsit — is an action at law. The confusion
with equity emanates from the decision of the King's Bench in 1760 in the case of
Moses u Macferlan, 2 Burr. 1005,97 Eng. Rep 676, where Lord Mansfield stated
that the defendant's obligation came 'from the ties of natural justice'founded in
'the equity of the plaintiff's case.' As Professor Palmer explains, the statement
concerning the action of quasi contract being equitable has been repeated many
times, but merely refers to the way in which a claim should be approached 'since
it is clear that the action is at law and the relief given is a simple money judgment'(1
PALMER, LAW OF RESTITUTION, sec 1.2, at 7(1978))(emphasis supplied)."
Guaranty National Title Co, Inc.u J. E.G. Associates, 1995 U.S. Dist. LEXIS
17772,*17(N.D.III. 1995)
(3) Innumerable cases have made the distinction between"implied in fact"vs.
"implied in law" contracts. Thus, the United States Supreme Court
states,"An agreement implied in fact is founded upon a meeting of minds, which,
although not embodied in an express contract, is inferred, as a fact, from conduct
of the parties showing, in the light of the surrounding circumstances, their
tacit understand- ing....By contrast, an agreement implied in law is a fiction
of the law where a promise is imputed to perform a legal duty, as to repay money
obtained by fraud or duress."Hercules, Inc.u United States, 516 U.S.417 (1996).A
state Supreme Court emphasized the distinction in similar language:"Contracts
implied-in-law and those implied-in-fact are two distinct concepts. A contract
implied-in-fact is a true contract whose existence and terms are inferred from
the conduct of the parties. Such an agreement is grounded in the
parties'agreement and tacit understanding. In contrast, a contract implied-in-law is
not a true contract at all. It is a legal fiction, a non-contractual obligation created
by the courts to provide a contractual remedy where none existed at common law."
Kennedy vu Forest, 129 Idaho 584, 930 P.2d 1026 (1997)
(4) Where a contract is unenforceable because of the Statute of Frauds, but
one party has conferred a benefit on the other, such as a down payment, an
action in restitution lies in quasi contract for the recovery of the amount by
which the defendant has been unjustly enriched. See, e.g, Montenaro Bros.
Bldrs. u Snow,

460 A.2d 1297 (1983). Similarly, courts grant restitution of benefits conferred
under voidable contracts as well as contracts discharged because of the non-
occurrence of a condition, impracticability, or frustration of purpose. See
at§127B.2.
D. THE RELIANCE AND RESTITUTION INTERESTS 697

ESTATE OF FRANCES CLEVELAND v.GORDEN

Tennessee Court of Appeals
837 S.W.2d 68(1992)

KocH, J.

Frances Cleveland supported herself with her social security benefits, some
modest investment income, and the income from a trust fund established by
a deceased sister. She lived alone in her later years, although her nieces and
nephews occasionally stayed with her when she became il.
Ms. Cleveland became seriously ill in January 1984. One of her neighbors
telephoned Ms. Gorden [Ms. Cleveland's niece] in Houston, and Ms.
Gorden immediately traveled to Nashville because Ms. Cleveland was then 92-
years-old and had no one else to take care of her. Ms. Gorden tried to look
after her aunt for approximately three weeks but Ms. Cleveland required
continuous skilled care. In February 1984, Ms. Gorden placed Ms. Cleveland in a
nursing home in Shelbyville where she could be near her friends and other more
distant relatives.
When her aunt entered the nursing home, Ms. Gorden discussed Ms. Cleveland's
finances with the officers at the Third National Bank in Nashville where Ms.
Cleveland maintained her accounts, including [a] trust account established for
her by her sister. The bank officers advised Ms. Gorden that she would be able to
obtain full reimbursement for any expenditures she made on her aunt's behalf if
she opened a separate account for that purpose and maintained detailed
expense records. Ms. Gorden accordingly opened a checking account and made
arrange- ments with Third National Bank to deposit into that account all the income
from a trust her mother had established for her years earlier.
Beginning in February 1984, Ms. Gorden used her own funds to pay most of her
aunt's bills. These expenses included Ms. Cleveland's nursing home bills, her other
medical expenses[,] the utilities for her Linden Avenue house, and occasional small
personal sundries purchased for Ms. Cleveland. At the same time, all of Ms.
Cleveland's social security benefits and other income, including rental income
from her house, continued to be deposited into Ms. Cleveland's own account.
Third National Bank occasionally deposited some of Ms. Cleveland's funds in the
account maintained by Ms. Gorden when Ms. Gorden's own funds were insufficient
to pay all of her aunt's expenses.

Ms. Cleveland's health stabilized after she entered the nursing home. Ms. Gorden
visited her occasionally and received periodic reports from the nursing home
about her aunt's health. Ms. Cleveland was aware that Ms. Gorden was using
her own money to pay the nursing home bills and told a companion that Ms.
Gorden"would get everything she had, if there was anything left."In January 1989,
Ms. Cleveland finally gave Ms. Gorden a limited power of attorney authorizing Ms.
Gorden to write checks on Ms. Cleveland's account to pay for her medical and
living expenses.
Ms. Cleveland died in the nursing home on March 15, 1989. Her 1976 will
was admitted to probate, and the probate court appointed a substitute
administrator after Third National Bank declined to serve as executor. Ms. Gorden
filed a timely
698 REMEDTBS CH.8

claim seeking reimbursement for the $99,741 she spent on Ms. Cleveland's
behalf from 1984 through 1989.She did not seek payment for all the other services
she had rendered to her aunt. The administrator opposed the claim on the
grounds that these expenditures were gifts since Ms. Cleveland had never
agreed to reimburse her niece. The probate court agreed and denied the claim. Ms.
Gorden has perfected this appeal
This case requires us to decide whether Ms. Gorden was a capricious intermed-
dler who is not entitled to reimbursement for her expenditures on Ms. Cleveland's
behalf because of her kinship with Ms. Cleveland. Far from being an
intermeddler, we find that Ms. Gorden was acting out of a sense of family
obligation. We also find, contrary to the probate court, that Ms. Cleveland knew
that Ms. Gorden expected to be reimbursed for the expenditures she was making
on Ms. Cleveland's behalf.
A person who voluntarily and officiously pays another's debts is not entitled
to reimbursement. RESTATEMENT OF RESTITUTION SS 2, 112 (1936); see also
Walker u Walker, 138 Tenn.679, 681-82, 200 S.W.825,825(1918)(person
voluntarily paying another's debt without fraud, accident, mistake, or
agreement is not entitled to subrogation); Goodfriend u United American
Bank,637 S.W.2d 870.872(Tenn. Ct. App. 1982)(a mere volunteer, intermeddler,
or stranger, or one acting officiously in paying another's debt is not entitled to
subrogation).
The general rule is not applicable when the payment is made under
the compulsion of a moral obligation, in ignorance of the real state of facts, or
under an erroneous impression of one's legal duty. United States Fidelity &
Guaranty Co.u Elam, 198 Tenn. 194, 209, 278 S.W.2d 693, 700 (1955). Thus, a
person who pays another's debt because of a moral obligation is not an officious
intermeddler and is entitled to reimbursement unless the payment was
gratuitous.
A moral obligation is a duty that eannot be legally enforced. It springs from
the common sense of justice and fairness shared by all honorable persons and is
more than a desire to be charitable or to give a gift. A moral obligation is
perhaps best epitomized by the obligation family members commonly feel to
support each other. Accordingly, the Tennessee Supreme Court has held that a
woman who voluntarily undertook to care for her invalid sister was not only moved
by sisterly affection, and by that feeling of compassion which would arise in the
breast of any one possessed of normal sympathies; but she was, in a sense, under
a form of moral compulsion. The burden had been cast on her, and she would
not throw it off without a gross violation of duty and a shock of the moral
sense. Key v Harris,116 Tenn. 161, 171-72,92 S.W.235, 237 (1905).
Even though they are not intermeddlers, family members are generally
pre- eluded from recovering for services provided to their elose relatives because
the law presumes that the services were a gratuitous part of the relationship
when the relatives live together as part of the same family. The reasons for the
presumption are that "family life abounds in acts of reciprocal kindness which
tend to promote
1 the comfort and convenience of the family, and that the
introduction of commercial considerations into the relations of persons so closely
bound together would expel this spirit of mutual beneficence and to that extent
mar family unity." Key u Harris,
116 Tenn.at 92 S.W. at 237.
D. THE RELIANCE AND RESTITUTION INTERESTS 699

The presumption that family members'services are gratuitous is not

conclusive. It ean be rebutted by proof of an express agreement to pay for the
services or by proof of circumstances showing that the relative accepting the
benefit of the services knew or should have known that the relative performing
them expected compensation or reimbursement. Gorrell u Taylor,107 Tenn. at
570,64 S.W.at 888; In re Estate of Hichs, 510 S.W.2d 263,265(Tenn. Ct. App.
1972).
We concur with the probate court's conclusion that Ms. Gorden did not intend
her expenditures on Ms. Cleveland's behalf to be a gift. We do not concur, however,
with its conclusion that the record does not contain proof of circumstances
demonstrat- ing that Ms. Cleveland knew or should have known that Ms. Gorden
expected to be reimbursed.
The proof quickly dispels any notion that Ms. Gorden undertook to support her
aunt gratuitously. The responsibility was thrust upon her, and she responded
partly because of her family obligations and partly because no other relative was
willing to take on the task. Ms. Cleveland's bankers told Ms. Gorden that
she could be reimbursed, and from the outset, Ms. Gorden manifested her desire
for reimburse- ment by maintaining detailed records of her expenditures as the
bankers requested. While her arrangement with her aunt could have been better
structured with the assistance of counsel, Ms. Gorden should not be penalized for
failing to seek legal advice when she decided to help Ms. Cleveland.
Ms. Gorden's assistance to her aunt went beyond what would normally have
been expected of family members in similar circumstances. The ladies were not
close relatives and had never lived together in a family relationship. Even though
[there was] no express agreement to reimburse Ms. Gorden for her
expenditures, Ms. Cleveland knew that Ms. Gorden was supporting her and
accepted the support. Since Ms. Cleveland had left Ms. Gorden only a
portion of her furniture, her statement that Ms. Gorden "would get everything
she had, if there was anything left"indicates her expectation that Ms. Gorden
would be compensated with a larger share of her estate.
We reverse the denial of Ms. Gorden's claim and remand the case to the
probate court for further proceedings consistent with this opinion. We tax the
costs to Frances Cleveland's estate for which execution, if necessary, may issue.

NOTES
(1) RESTATEMENT OF RESTITUTION §113 (1937), cmt.a:

The principle underlying the rule stated in §112 is that one

who officiously intervenes to perform the duty of another is not entitled
to
compensation.Under the circumstances stated in this Section, the
necessity of protecting the interests of persons entitled by law to have
things or services supplied to them by another ordinarily prevents the
intervention even of a stranger from being officious.
(2) Edwards bought a backhoe loader on credit from Ansley who retained a
security interest in the loader. A security interest is a property interest in
the collateral retained, in this case, by the owner to assure repayment of the
obligation.
700 REMEDIES CH.8

The holder of the interest may foreclose and retake the collateral if the
obligation is not met. After using the loader for three years, Edwards took it to
Growney for repair, but did not inform Growney about the Ansley interest.
Growney, who thought Edwards owned the loader free of any creditor's
security interest, completed the repairs in exchange for Edwards' promissory
note that was never paid. Edwards then defaulted on his contract with Ansley
who repossessed the loader. Ansley was unaware of Growney's services.
Growney sought to recover the value of the benefit conferred, i.e., the reasonable
value of the repairs, from Ansley who was arguably unjustly enriched. In holding
for Ansley, the court recognized the tension between the prevention of unjust
enrichment and thrusting an obligation on a party who neither requested nor
was aware of such benefits. Tom Grouney Equipment, Inc. v. Ansley, 888 P.2d
992 (1994).
(3) Plaintiff, a resident taxpayer of Riley Township, Ohio, and his four
children of compulsory school age lived more than four miles from the nearest
high school. Ohio law required the township and the county board of
education to provide transportation for such children living more than four miles
from the nearest public school. Both refused to provide such transportation and
the father transported the children to school each day.At the end of the school
year, he presented to the county board of education for $397 which the board
refused to pay. The court recognized the grave public concern in ascertaining
that children receive an education. The performance of this legal obligation
which should have been performed by the county was a benefit to the county
which was unjustly enriched at the expense of the father. Moreover, the father
was a"proper person" to perform the obligation and was, therefore, not operating
as an officious intermeddler. The county argued that the father could have
pursued a writ of mandamus("We command") to have a court order the board to
provide transportation. While that remedy may have been available, it was not
an exclusive remedy under these facts. The plaintiff is entitled to recover the
reasonable value of the benefit conferred by non-officiously perform- ing the duty
of another.Sommers u Putnam County Board of Education,248 N.E. 682(Ohio
1925)

E. SPECIFIC PERFORMANCE
[1] Background¹7
The damage remedy for breach of contract provides substitutional relief to
the aggrieved party rather than the very performance promised. There are
situations, however, where a court should provide the specifie performance
promised.18 Since the aggrieved party receives exactly what he was promised
when he receives specific relief, such a remedy may be preferable.19 Unlike
the civil law system

17 This section is an edited version of MuRRAY ON CoNTRACTS§128(5th ed.2011).

18 Specifie Performance and Injunctions are explored in Ss 357-369 of the ResTArEMENT
(SECoND)op CoNTRACTS.
19 In terms of economic analysis, it may be argued that specifie performance neither
overcompensates nor undercompensates the aggrieved party's expectation interest and is, therefore,
more precise than substitutional damages. See SCHWARTZ, THE CASE FOR SPBCIFIC PERFORMANCB,89
YALE L.J.271(1979).But