Week 4 Discussion Board Questions

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Jada Porter Fundamentals of Business Law 2/8/2024 Week 4: Discussion Board Questions DQ 4.1: Article 39 of the Restatement (Third) of Restitution reads as follows: If a breach of contract is both material and opportunistic, the injured promisee has a claim in restitution to the profit realized by the defaulting promisor as a result of the breach. Liability in restitution with disgorgement of profit is an alternative to liability for contract damages measured by injury to the promisee. Commentators have described section 39's adoption as the equivalent of a "quiet revolution" that "is breathtaking in its potential transformation of the traditional contractual landscape.” Caprice L. Roberts, Restitutionary Disgorgement as a Moral Compass for Breach of Contract , 77 U. Cin. L. Rev 991, 993 (2009). What is so revolutionary about this provision? How does it differ from the traditional approach to contract damages described in your textbook? Provisions in the Restatement are not legally binding unless and until they are adopted in a particular jurisdiction. Would you encourage your jurisdiction to adopt section 39? Why or why not?  Commentators described Section 39 of the Restatement as revolutionary because it offers a stronger remedy for legal parties who have experienced a breach of contract. Those who have suffered from a contractual breach now have the potential option to claim restitution. The restitution remedy involves the return of any profits gained by the promisor who is responsible for the breach. Section 39 departs from the traditional approach to contract damages which typically focuses on compensating the injured party based on the harm suffered. The traditional approach relies on subjective assessments of harm however, restitution allows the promisee to recover profits directly linked to the contractual breach. Yes, I would encourage my jurisdiction and other states to adopt the Section 39 provision. I believe it would help create a reliable framework for contract damages. In my opinion, Section 39 holds people who breach contracts more accountable than the traditional approach to contract damages. This provision ensures that those who profit from breaching a contract must return all of the money they have earned through the breach. Additionally, Section 39 would also motivate parties to strictly adhere to the terms of their contracts by establishing that opportunistic breaches will not go unpunished. This new approach to contract damages redirects attention from simple compensation to actively discouraging this behavior in contractual business. However, provisions in the Restatement lack legal enforceability until they are formally adopted. I believe it is only fair for each state jurisdiction to have the opportunity to consider implementing Section 39. Citation: The Restatement (Third) of Restitution and Unjust Enrichment §39

DQ 4.2: Do you think the result in Gianetti v. Norwalk Hospital was fair to the hospital? Why or why not?  Yes, I think that the result in the Gianetti v. Norwalk Hospital lawsuit was fair to the hospital. The court affirmed that Gianetti qualified as a lost volume seller. This formed the basis of the court’s decision to award Gianetti lost profits only up to the year 1988. The Norwalk Hospital argued against the decision that the lost volume seller theory applies in this case. Norwalk Hospital believed that the court failed to acknowledge that the plaintiff wouldn’t have been able to fulfill his physician duties under their contract while simultaneously working for other hospitals after Gianetti’s privileges were terminated. Of course, this is a required component of the three prong test to categorize an individual as a lost volume seller in contract law. However, the court determined that there was no sufficient support to prove that plaintiff Gianetti was not a lost volume seller under the circumstances of his contract. I agree that Norwalk Hospital failed to provide evidence that would strongly challenge the lost volume seller theory in this lawsuit. Considering that the physician’s contract at Norwalk Hospital was subject to annual renewal, this played a significant role in the court’s determination of Gianetti’s compensation award. I believe that it was justifiable for Gianetti’s compensation to be capped at the year 1988 (Gianetti v. Norwalk Hospital, 304 Conn. 754 (2011). In my opinion, the court has been fair enough by establishing this limit on the Norwalk Hospital’s liability in this case. Overall, I agree with the court’s decision. Citation: Gianetti v. Norwalk Hospital, 304 Conn. 754 (2011)

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