Parth Singh (Columbia Law School and High Court of Punjab and Haryana) has posted Contractual Subordination and Restitution after Breach: Quantum Meruit for the Defaulting Performer in New York Law on SSRN. Here is the abstract:
The hardest restitution problem in contract law is not whether breach is wrongful. It is whether the recipient of partial performance has a legal basis for retaining the net benefit of that performance without paying for it. New York law intensifies that problem. On one side, Clark-Fitzpatrick and Corsello make clear that quasi-contract is unavailable where a valid and enforceable contract governs the subject matter and that unjust enrichment is not a fallback whenever ordinary claims fail. On the other side, Farash, Bradkin, substantial-performance doctrine, and UCC § 2-718 reflect an anti-windfall impulse that sometimes allows recovery for requested or retained benefits without enforcing the claimant’s failed contractual theory. New York has not adopted Restatement (Second) of Contracts § 374 as a general rule for breaching performers across contract categories. This article therefore replaces the moral question—should the breacher recover?—with a legal question: does contract, statute, equity, or offset legally justify the recipient’s retention of the net benefit? It argues that New York breaching-party restitution is best understood through contractual subordination. Restitution to a defaulting performer is not categorically barred because the claimant breached, but it is also not freely available whenever the recipient benefited. It is available, if at all, only when subordinate to the parties’ enforceable contract, statutory policy, equitable limitations, and compensatory offsets. The framework has immediate commercial significance. Businesses that want predictable consequences after partial performance, termination, abandonment, or breach must draft expressly for accepted work, payment triggers, offsets, liquidated damages, intellectual-property ownership, and quasi-contract waiver.
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