A restitution remedy is basically a solution that affords some form of award that a plaintiff needs to recover from damages done by a defendant. Such a remedy is calculated on the gains of a defendant instead of the losses of the plaintiff. Restitution essentially mandates that a defendant forfeit all gains that have unlawfully placed the plaintiff at a disadvantage. When it comes to contract law, restitution is the most often used. Restitution in an agreement is designed to restore an injured party, or a party who underwent damages in some form, to a previous position before the contract was entered.

Parties that desire restitution cannot seek lost earnings and profits stemming from the breach. To get a proper resolution, a plaintiff should include such a claim in an initial complaint. Further, restitution does not have to be awarded if an amount cannot be calculated with absolute clarity. Restitution is usually awarded for two reasons:

  1. To give proper compensation to a victim while restoring finances to an offended party
  2. To prevent the unjust enrichment of a defendant and stop them from retaining gains that are unlawful

Restitution usually applies when a person has benefited at the expense of another and the offending party makes some sort of gain over the other.

For contract lawsuits, the non-breaching party may cancel the agreement and usher in a lawsuit for restitution if a non-breaching party has been bestowed a benefit to the breaching party to the detriment of another party. Criminal cases apply if a defendant must pay the hospital bills of a victim of criminal battery; otherwise known as criminal restitution. Other remedies stemming from gains are awarded in cases where a defendant has ushered in profits from wrongdoing of some kind.

Plaintiffs usually desire restitution when agreements are voided by a judge due to incapacity or incompetence of the defendant. The law also allows incapacitated people to disavow contract duties but usually only if a plaintiff is in a worse position.

The usual rule is that payment of money under mistakes could be recovered if such payments will prejudice a payee. Moreover, it is also considered an unjustified enrichment to allow recipients to keep money due to a mistake. To create a strong restitution claim, you must demonstrate if the defendant had gained from an agreement.

Key Differences

The key differences between compensation and restitution are based on how the monetary awards are calculated. When it comes to restitution, the award is based on how much a defendant was rewarded from a violation. Compensation is based on how much a plaintiff received when it comes to finances. In certain cases, a judge will allow a plaintiff to choose between compensation and restitution. For instance, restitution awards may stem from a higher payoff to a plaintiff than a compensated amount. The plaintiff could then be permitted to pick the higher award. Such a choice might not be available in every case.

Restitution in the Court System

Moreover, resolution is usually invoked in contract breach cases. This occurs when a party has violated an agreement and is ordered to issue restitution. The amount is based on how much the offending party gained from the contract violation, and is also based on the amount stated within the contract terms. Judges encounter this common scenario and restitution is usually granted. Moreover, restitution is a common award in personal injury cases. Restitution would be issued instead of compensation and could be ordered in a personal injury case. The amount would only cover an out-of-pocket expense in some form, and does not cover emotional distress.

In addition, restitution is also found in criminal cases. For instance, the judge could order a criminal defendant to pay a victim restitution in instead of a fine. The difference between restitution and criminal fine is that the fines would be paid to the government, and the restitution would go to the victim. 

However, there are instances where restitution awards have limits. They are usually not granted in every case, especially if an amount cannot be adequately calculated. Certain jurisdictions may also issue caps on the amount of restitution, but this would depend on the violation at hand. The actual definition of restitution also depends on the state or county in which you live.

To learn more about a restitution remedy, you can post your job on UpCounsel’s website. UpCounsel’s lawyers have graduated from some of the best law schools in the nation and will provide more information on your rights, should you need compensation or restitution of any kind. Moreover, they will defend your rights in court so you don’t have to stand on your own in front of a judge.