The Restatement of Liabilities in Restitution

Abstract

The Restatement Third: Restitution and Unjust Enrichment describes individuals who have been unjustly enriched as incurring liabilities — and only liabilities — to make restitution. In contrast, most unjust enrichment scholars assume that individuals who have been unjustly enriched incur obligations, and not merely liabilities, to make restitution. In Peter Birks’ words: ‘A person who receives a mistaken payment of a non-existent debt is unjustly enriched, and from that unjust enrichment he comes under an obligation to make restitution.’ This essay examines three questions raised by the Restatement’s apparent endorsement of a ‘liability model’ of unjust enrichment: first, does the Restatement actually mean what it appears to mean? (yes); second, does the liability model accurately describe the positive law? (yes); and third, and most importantly, why does it matter if unjust enrichment law is concerned only with liabilities and not with obligations? I argue that the distinction matters because justifying liabilities to make restitution is different from justifying duties to make restitution. Important objections to attempts to explain unjust enrichment law can be avoided when those explanations are interpreted not as explanations of obligations, but of liabilities. In particular, the main objection to ‘property-based’ explanations of unjust enrichment law can be avoided insofar as these explanations are interpreted as explaining legal liabilities, not legal duties.

Keywords: restitution, unjust enrichment, restatement, private law, private law theory

JEL Classification: K10, K12, K40