Disgorgement remedies for breach of contract

  • Yan Wang

Student thesis: Doctoral ThesisJD (Juris Doctor)

Abstract

This thesis concerns with the law of disgorgement remedies for breach of contract in English law.

This thesis argues that both full and partial disgorgement are restitutionary in nature and they aim at preventing unjust enrichment by stripping partial or full profits the defendant made from breach of contract. This dissertation argues that the compensatory analysis of partial disgorgement provided by Lord Reed in Morris- Garner v One Step (Support) Ltd [2018] UKSC 20 is not entirely convincing.

This thesis also considers the availability of disgorgement remedies for breach of contract. Disgorgement remedies are exceptional and would be available only if compensatory damages and specific relief are inadequate remedies for breach of contract. Partial disgorgement should be available according to the suggestion Lord Reed made in One Step and the restitutionary analysis of partial disgorgement provides a convincing justification for this suggestion. However, this thesis considers it might be wise to abandon the ‘property’s analogous rights’ idea because of the uncertainty of this definition.

Full disgorgement for breach of contract is awarded in a case-by-case approach and should be available where the contractual obligation breached is akin to a fiduciary obligation as the House of Lords suggested in Attorney General v Blake [2001] 1 AC 268. The court awards a full disgorgement for breach of contract also to achieve the purpose of deterrence since it finds its origin in disgorgement for breach of fiduciary duty.

After Blake, contractual rights and obligations are fundamentally reconceptualised and a future case where full disgorgement is allowed can be rationalized as a further judicial recognition of the contractual rights that the function of a contract is no longer limited to securing benefits for both parties but it would also be a mechanism for preventing the defendant from profiting from the breach of contract. Therefore, outside of the Blake situation, the court should take all circumstances into consideration in a case-by-case approach to decide whether the claimant has a legitimate interest in preventing the defendant from profiting from the breach similar to the decision in Esso Petroleum Co Ltd v Niad Ltd [2001] EWHC Ch 458.

This thesis considers that English law is rather a long way from being willing to embrace a principled approach for awarding a disgorgement remedy like section 39 of the Restatement (Third) of Restitution and Unjust Enrichment (2011) in US law.


Date of AwardDec 2021
Original languageEnglish
Awarding Institution
  • Queen's University Belfast
SupervisorDavid Capper (Supervisor) & Marek Martyniszyn (Supervisor)

Keywords

  • Disgorgement
  • restitution
  • contract law
  • negotiating damages
  • full disgorgement
  • Morris- Garner v One Step (Support) Ltd [2018] UKSC 20
  • attorney General v Blake [2001] 1 AC 268
  • restitution for wrongs
  • Opportunistic breach of contract
  • Section 39 of the Restatement (Third) of Restitution and Unjust Enrichment (2011)

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