I would like to thank William Lucy and Francesco Giglio for providing useful comments on an earlier draft.

1. [1974] 1WLR 798.

2. [2003] EWCA Civ 323, [2003] All ER (Comm) 830.

3. [2001] 1 AC 268.

4. See Zakrzewski, R, Remedies Reclassified (New York: Oxford University Press, 2005)CrossRefGoogle Scholar; Khouri, N, “Efficient Breach Theory in the Law of Contract: An Analysis” (2000) 9 Auckland UL Rev 739 Google Scholar; Smith, SA, “The Law of Damages: Rules for Citizens or Rules for Courts?” in Saidov, D & Cunnington, R, eds, Contract Damages: Domestic and International Perspectives (Oxford: Hart, 2008).Google Scholar

5. [1980] AC 827.

6. Ibid at 849.

7. Pothier, Robert Joseph, A Treatise on the Law of Obligations or Contracts translated by Evans, William David, 3d American ed (Philadelphia, 1853)Google Scholar. See also Austin, J, Lectures on Jurisprudence vol II, ed by Campbell, R (London: John Murray, 5th ed, 1885), Lecture XLV at 367 Google Scholar.

8. Linzer, P, “On the Amorality of Contract Remedies—Efficiency, Equity, and the Second Restatement” (1981) 81 Colum L Rev 111 at 112CrossRefGoogle Scholar.

9. Fried, C, Contract as Promise (Cambridge, MA: Harvard University Press, 1981) at 57.Google Scholar

10. Ibid at 2.

11. Ibid at 11.

12. Ibid at 16.

13. Holmes, OW, “The Path of the Law” (1897) 10 Harv L Rev 457 at 462Google Scholar.

14. Remington, C A, “Intentional Interference with Contract and the Doctrine of Efficient Breach: Fine Tuning the Notion of the Contract Breacher as Wrongdoer” (1999) 47 Buff L Rev 645 at 647Google Scholar.

15. See Webb, C, “Performance and Compensation: An Analysis of Contract Damages and Contractual Obligation” (2006) 26 Oxford J Legal Stud 41 at 46CrossRefGoogle Scholar.

16. Ibid.

17. Ibid at 49.

18. Smith, SA, Contract Theory (Oxford: Oxford University Press, 2004) at 119.Google Scholar

19. [1905] AC 239, 253.

20. Webb, supra note 15 at 42.

21. Ibid.

22. Pothier, supra note 7. See also Austin, supra note 7 at 367.

23. Zakrzewski, supra note 4 at 104.

24. Ibid at 105.

25. Ibid.

26. Ibid.

27. In such cases, Zakrzewski says that “[t]he law can only regulate future conduct.” Ibid. See also Kocourek, A, Jural Relations, 2d ed (Indianapolis, IN: Bobbs-Merrill, 1928) at 3.Google Scholar

28. See Webb, supra note 15 at 42-43.

29. See, for example, Grant v Dawkins, [1973] 1WLR 1406; Ford-Hunt v Ragbhir Singh, [1973] 1 WLR 738; Oakacre Ltd v Claire Cleaners (Holdings) Ltd, [1982] ch 197.

30. The facts and decision in this case have been well rehearsed elsewhere. See e.g. Edelman, J, “Profits and Gains from Breach of Contract” (2001) LMCLQ 9 Google Scholar; Campbell, D, “The Treatment of Teacher v Calder in AG v Blake” (2002) 65 Mod L Rev 256 CrossRefGoogle Scholar; Jaffey, P, “Disgorgement for Breach of Contract” (2000) 8 Restitution L Rev 578 Google Scholar; Edelman, J, “Restitutionary Damages and Disgorgement Damages for Breach of Contract” (2000) Restitution L Rev 129 Google Scholar; Edelman, J, “Attorney General v Blake Revisited” (2003) 11 Restitution L Rev 101 Google Scholar; Chetwin, M & Round, D “Breach of Contract and the New Remedy of Account of Profits” (2002) 38 Journal of Accounting, Finance and Business Studies 406.Google Scholar

31. A Burrows, “Are ‘Damages on the Wrotham Park Basis’ Compensatory, Restitutionary, or Neither?” in Saidov & Cunnington, supra note 4 at 178.

32. Burrows, A & Peel, E, eds, Commercial Remedies (Oxford: Oxford University Press, 2003) at 129.Google Scholar

33. Campbell, D & Wylie, P, “Ain’t No Telling (Which Circumstances are Exceptional)” (2003) 62 Cambridge LJ 605 at 608CrossRefGoogle Scholar; Graham, M, “Restitutionary Damages: The Anvil Struck” (2004) 120 Law Q Rev 26 at 28Google Scholar; Shape, RJ & Waddams, SM, “Damages for Lost Opportunity to Bargain” (1982) 2 Oxford J Legal Stud 290 CrossRefGoogle Scholar.

34. McInnes, M, “Account of Profits for Common Law Wrongs” in Degeling, S & Edelman, J, Equity in Commercial Law (Sydney, AU: Thomson, 2004)Google Scholar; McInnes, M, “Gain, Loss and the User Principle” (2006) Restitution L Rev 76 Google Scholar.

35. McInnes (2006), ibid at 85. This approach has also been adopted by Giglio, Francesco in his excellent book The Foundations of Restitution for Wrongs (Oxford: Hart, 2007) at 63–65, 206-07Google Scholar.

36. Ibid at 81.

37. Cunnington, R, “The Measure and Availability of Gain-Based Damages for Breach of Contract” in Saidov, & Cunnington, , supra note 4 at 223-24Google Scholar.

38. Ibid at 15; McInnes, supra note 34 at 86, 83-85; Burrows supra note 31 at 172; Giglio, supra note 35 at 63; Giglio, F, “Gain-Related Recovery” (2008) 28 (3) Oxford J Legal Stud 501 at 515CrossRefGoogle Scholar.

39. Cunnington, ibid. A number of academic commentators have recognized that the ‘reasonable fee’ cases could be analysed as examples of substitutive compensation: See, for example, Tettenborn, A, “Gain, Loss and Damages for Breach of Contract: What’s in an Acronym?” (2006) 14 Restitution L Rev 122 at 113Google Scholar; Smith, C, “Recognising a Valuable Lost Opportunity to Bargain when a Contract is Breached” (2005) 21 J Contract Law 250 at 259Google Scholar; O’Sullivan, J, “Reflections on the Role of Restitutionary Damages to Protect Contractual Expectations’” in Johnston, D & Zimmermann, R, eds, Unjustified Enrichment (Cambridge: Cambridge University Press, 2002) at 343 Google Scholar; Nolan, R, “Remedies for Breach of Contract: Specific Enforcement and Restitution” in Rose, F, ed, Failure of Contracts (Oxford: Hart, 1997) at 47 Google Scholar; Virgo, G, “Restitutionary Remedies for Wrongs: Causation and Remoteness” in Rickett, C, Justifying Remedies in the Law of Obligations (Oxford: Hart, 2008) at 12–13 Google Scholar.

40. See Giglio, F, “Restitution for Wrongs: A Structural Analysis” (2007) XX Can JL & Jur 5 at 17Google Scholar.

41. Giglio says that: “If ‘the defendant’s gain is of something that lies within the right of the plaintiff’, then the claimant’s action must be directed towards the reintegration of the status quo ante the wrongful event.” Ibid at 18.

42. Rivera-López, E, “Promises, Expectation, and Rights” (2006) 81 Chicago-Kent L Rev 21 at 34Google Scholar.

43. Hornby, AS & Crowther, J, Oxford Advanced Learner’s Dictionary of Current English, 5th ed (Oxford: Oxford University Press, 1995) at 1192.Google Scholar

44. Edelman’s analysis comes very close to that of McInnes discussed above: both use the concept of subtraction from the claimant’s dominium, yet McInnes regards such subtraction as a loss, whereas Edelman regards it merely as a transfer of value. In fact, the similarity between their accounts can even be substantiated with reference to the rationale which, as indicated by Edelman and McInnes, the award of £2,500 was sought to attain in the Wrotham Park case. For them, this award, whether classified as restitutionary or compensatory damages, seeks to restore the claimant to the same situation in which he would have been originally if the defendant’s wrongful act of development had never been committed in the first place, a rationale which as explained above is false. Edelman, J, Gain-based Damages: Contract, Tort, Equity and Intellectual Property (Oxford: Hart, 2002).Google Scholar

45. The gravel extraction example shows that a cost of cure award is not an ordinary damages award. Typically, compensatory damages merely respond to any direct and/or consequential loss which may flow from the breach of the claimant’s primary right to performance and not to the breach itself. It is clear that compensation must be compensation for loss. Yet a cost of cure award is intended to allow claimants such as Macdonald to cure the breach itself. It aims to place him in the actual position he would have been in had Gritty performed its primary duty; it does not compensate for any financial losses. Value of loss damages and cost of cure damages do not share the same objective—they are fundamentally different. For example, in Radford v de Froberville [1977] 1Weekly Law Reports 1262, the defendant breached his obligation to build a wall that would separate his land from the claimant’s. The claimant sued for the cost of building the wall. The court awarded the cost of cure although the difference between the value of the claimant’s land with or without the wall was almost nil. The cost of cure is clearly greater than the value of loss, and therefore cannot be understood as compensatory. It is rather a substitute for ordinary specific relief. As Stephen Smith has argued: “[C]ost of cure[ ] awards are best explained as a form of substitute specific relief: their aim is not to compensate the plaintiff for the value or utility of whatever was lost, but to eliminate or undo the physical change in the plaintiff’s world that has been or will be brought about by the defendant’s breach of duty …. Payment of the cost of cure is a substitute for what the defendant should have done originally. Having failed in his primary substantive duty (to perform a contract, to not injure), there arises, at the moment of failure, a substitute duty to achieve the same end by paying for substitute performance.” Smith, Stephen, “The Law of Damages: Rules for Citizens or Rules for Courts?” in Saidov, Djakhongir & Cunnington, Ralph, eds, Contract Damages: Domestic and International Perspectives (Oxford: Hart, 2008) at 35–36 Google Scholar. For more details on the ‘cost of cure’ award, see Smith, SA, “Substitutionary Damages” in Rickett, C, ed, Justifying Private Law Remedies (Oxford: Hart, 2008)Google Scholar; McKendrick, E, “Breach of Contract and the Meaning of Loss” (1999) 52 Curr Legal Probs 37 CrossRefGoogle Scholar; Coote, B, “Contract Damages, Ruxley, and the Performance Interest” (1997) 56 (3) Cambridge LJ 537 CrossRefGoogle Scholar; Eisenberg, MA, “Actual and Virtual Specific Performance, the Theory of Efficient Breach, and the Indifference Principle in Contract Law” (2005) 93 Cal L Rev 975 at 1041-48Google Scholar.

46. Burrows supra note 31 at 173.

47. Ibid.

48. Another difficulty attending McInnes’s account lies in that “it is hard to see why he confines it to proprietary rights. If it has force, it should surely apply to all rights.” Ibid.

49. Stevens, R, Torts and Rights (Oxford: Oxford University Press, 2007) at 59–62 CrossRefGoogle Scholar; Pearce, D & Halson, R, “Damages for Breach of Contract: Compensation, Restitution, and Vindication” (2008) 28 Oxford J Legal Stud 73 CrossRefGoogle Scholar.

50. Stevens, ibid.

51. Burrows (2008), supra note 31 at 181-82.

52. Ibid at 182. Another difficulty attending the substitutive damages approach is that it is at odds with the duty to mitigate. It is an established legal doctrine of contract law that the injured party must take reasonable steps to mitigate the loss consequent on the breach and thus the defendant’s damages. The mitigation doctrine provides that damages will be measured as if the claimant had acted reasonably to minimize his loss and accordingly the damages recovered from the defendant. But, according to the substitutive damages approach, the claimant should still be eligible to recover substantial damages from the defendant, despite the fact that he has mitigated the loss consequent on the defendant’s breach and thus no substantial damage has been inflicted on him as a result of that breach.

53. See Cunnington, supra note 37 at 225-27, 231-32; Cunnington, R, “The Assessment of Gain-Based Damages for Breach of Contract” (2008) 71(4) Mod L Rev 559 at 566–67Google Scholar.

54. Zakrzewski, supra note 4 at 175.

55. Burrows (2008), supra note 31 at 178.

56. Ibid.

57. Ibid.

58. Black, G, “A New Experience in Contract Damages? Reflections on Experience Hendrix v PPX Enterprises “ (2005) Juridical Rev 31 at 49Google Scholar.

59. Eastwood, S, “Breach of Contract, Restitution for Wrongs and Punishment: Comment” in Burrows, & Peel, , eds Commercial Remedies: Current Issues and Problems (Oxford: Oxford University Press, 2003) at 126.Google Scholar

60. Black, supra note 58 at 49.

61. Friedmann, D, “Restitution for Wrongs: The Basis of Liability” in Cornish, WR et al, eds, Restitution—Past, Present, and Future: Essays in Honour of Gareth Jones (Oxford: Hart, 1998) at 133 Google Scholar; Friedmann, D, “Restitution of Benefits Obtained Through the Appropriation of Property or the Commission of a Wrong” (1980) 80 Colum L Rev 504 at 513CrossRefGoogle Scholar; Friedmann, D, “Restitution of Profits Gained by a Party in Breach of Contract” (1988) 104 Law Q Rev 383 Google Scholar. See also O’Dair, R, “Remedies for Breach of Contract: A Wrong Turn” (1993) Restitution L Rev 31 at 38Google Scholar; Edelman, J, “Restitutionary Damages and Disgorgement Damages for Breach of Contract” (2000) Restitution L Rev 129 at 136Google Scholar; Jaffey, P, The Nature and Scope of Restitution (Oxford: Hart, 2000) 374–76Google Scholar; Gergen, MP, “What Renders Enrichment Unjust?” (2001) 79 Texas L Rev 1927 Google Scholar. According to Birks, that restitution is based on deterrence and punishment, is not seen as inconsistent, because a defendant is necessarily punished to some degree by a monetary award and is likely to consider being obliged to pay considerable damages under civil law as no less burdensome and ruinous than a fine or other penalty under criminal law. Birks, P, ‘Civil Wrongs: A New World’ in Butterworths Lectures 1990-1991 (London: Butterworths, 1992) 55 at 86Google Scholar.

62. See also Burrows, A, “No Restitutionary Damages for Breach of Contract” (1993) LMCLQ 453 at 457Google Scholar; Black, supra note 58 at 49-50; Jackman, IM, “Restitution for Wrongs” (1989) 48 Cambridge LJ 302 CrossRefGoogle Scholar.

63. See Giglio, supra note 40 at 26; Siems, M, “Disgorgement of Profits for Breach of Contract: A Comparative Analysis” (2003) 7 Edinburgh L Rev 27 at 50CrossRefGoogle Scholar.

64. Weinrib, E, “Restitutionary Damages as Corrective Justice” (2000) 1 Theor Inq L 1 at 1Google Scholar.

65. Giglio, supra note 35 at 195, 202.

66. Ibid at 202.

67. Ibid.

68. Siems, supra note 63 at 48.

69. See Giglio (2007), supra note 35 at 208.

70. Ibid.

71. Ibid.

72. Ibid; Fox, D, “Restitutionary Damages to Deter Breach of Contract” (2001) 60 Cambridge LJ 33 at 35CrossRefGoogle Scholar.

73. Siems, supra note 63 at 54.

74. Burrows, A, McKendrick, E & Edelman, J, eds, Cases and Materials on the Law of Restitution, 2d ed (Oxford: Oxford University Press, 2007) at 3.Google Scholar

75. Weinrib (2000), supra note 64; Giglio (2007), supra note 40 at 5.

76. Weinrib’s account of corrective justice has been received enthusiastically by a number of restitution scholars: see, for example, Smith, L, “Restitution: The Heart of Corrective Justice” (2001) 79 Texas L Rev 2115 Google Scholar; Barker, K, “Understanding the Unjust Principle in Private Law: A Study of the Concept and its Reasons” in Neyers, JW, McInnes, M & Pitel, SGA, eds, Understanding Unjust Enrichment (Oxford: Hart, 2004) at 79.Google Scholar

77. Weinrib, supra note 64 at 5.

78. Ibid.

79. Ibid.

80. Ibid. As Weinrib states: “Corrective justice [ ] views doctrine as generated not by theoretical abstraction but by the law’s internal processes of justification. It claims, however, that these processes embody a critical standpoint for which corrective justice provides the theoretical expression. Corrective justice claims, therefore, to illuminate private law as a perspicuous whole, to exhibit the connection between aspects of this whole, and to subject them to the critical demands immanent in private law as a justificatory analysis.” Ibid at 5-6.

81. Ibid at 5.

82. Aristotle, , Nicomachean Ethics, translated by Crisp, R (Cambridge: Cambridge University Press, 2000) V, 2–5, 1130a14-1133b28CrossRefGoogle Scholar.

83. Giglio, supra note 40 at 22.

84. Ibid.

85. Weinrib, E, “The Gains and Losses of Corrective Justice” (1994) Duke LJ 277 at 282CrossRefGoogle Scholar.

86. Ibid.

87. Ibid at 282-83.

88. Ibid at 283.

89. Ibid at 285. See also Lucy, W, “What’s Private About Private Law?” in Robertson, A & Wu Tang, Hang, eds, The Goals of Private Law (Hart, 2009) at ch 3 Google Scholar.

90. Weinrib, ibid.

91. See Giglio, supra note 40 at 22, 25-26; Lucy, supra note 89; Weinrib, E, “Corrective Justice” (1992) 77 Iowa L Rev 403 at 419-23Google Scholar.

92. Giglio, supra note 35 at 194.

93. Weinrib would probably refer to the concept of correlativity.

94. See Giglio, supra note 40 at 22.

95. Weinrib, supra note 85 at 286.

96. As Kit Barker has stated: “My own view is that it may still be possible to justify a restitutionary response by reference to corrective justice, even when the plaintiff has suffered no [real financial] loss by virtue of the defendant’s wrong.” Barker, K, “Unjust Enrichment: Containing the Beast” (1995) 15 Oxford J Legal Stud 457 at 473CrossRefGoogle Scholar. Barker succinctly summarizes his view (drawing on Weinrib’s notion of a normative loss) as to why corrective justice can explain restitution of gains that exceeds the claimant’s loss. See Barker, supra note 76 at 100-01.

97. Weinrib, supra note 85 at 289.

98. Ibid.

99. Ibid.

100. Stoljar, S, “Keeping promises: the moral and legal obligation” (1988) 8 Legal Stud 258 at 269.CrossRefGoogle Scholar

101. Ibid.

102. Weinrib, supra note 85 at 290. See Kant, I, The Metaphysics of Morals, translated by Gregor, M (Cambridge: Cambridge University Press, 1991) at 4043 Google Scholar.

103. Weinrib, ibid at 290-91.

104. Ibid at 291; Kant, supra note 102 at 90-95, 101-03.

105. López, supra note 42 at 34.

106. Hart, HLA, “Are There Any Natural Rights?” (1955) 64 Phil Rev 175 at 180CrossRefGoogle Scholar; Vallentyne, P, “Natural Rights and Two Conceptions of Promising” (2006) Chicago-Kent L Rev 9 at 12Google Scholar.

107. Kant, supra note 102 at 63.

108. As Weinrib states: “[T]he parties to a corrective justice transaction are equal in a very peculiar way: the equality abstracts from the particularity of the parties’ social rank or moral character to the sheer relationship of wrongdoer and sufferer. Corrective justice treats the parties as equals because all self-determining beings, regardless of rank or character, have equal moral status. The conjunction of right and duty is simply this equality of self-determining beings viewed juridically, from the standpoint of the correlativity of one person’s action and its effects on another.” Weinrib (1994), supra note 85 at 292.

109. See Stoljar, supra note 100 at 269.

110. See Giglio, supra note 40 at 25.

111. Consider the following example. Suppose that a contractor promises to build a house to certain specifications, one of which is that Brand X pipes are to be used in the plumbing. The contractor builds the house according to the specifications, save that he uses different materials, installing Brand Y pipes rather than Brand X. In order to calculate the claimant’s financial loss from this breach, the court must determine what the claimant stood to gain from the performance of the contract. Inasmuch as Brand Y is equal in quality, appearance, market value and cost to Brand X, the use of Brand Y pipes does not affect the value of the building work (whether this is assessed at market rates or by reference to the value placed on the work by the claimant). Accordingly, no financial loss is suffered by the claimant. But still the claimant has not received the exact performance he contracted for. In such a case, therefore, if the claimant aims to force the defendant to deliver the promised performance, it will be difficult to argue that compensation can give effect to his interest in having the contract performed as specified. This indeed proves that compensatory damages cannot and should not be said to equate to enforced performance. This example is based on the facts of Jacob & Youngs v Kent, 230 NY 239, 129 NE 889 (1921).

112. See Webb, supra note 15 at 45; Zakrzewski, supra note 4 at 102-03,165-66; Smith, supra note 4 at 36-37.

113. Mitchell, C, “Remedial Inadequacy in Contract and the Role of Restitutionary damages” (1999) 15 J Contract Law 133 at 150Google Scholar; Mitchell, C, “Promise, Performance and Damages for Breach of Contract” (2003) J Obligations & Remedies 67 at 69.Google Scholar

114. See Giglio, F, “Gain-Related Recovery” (2008) 28 (3) Oxford J Legal Stud 501 at 516CrossRefGoogle Scholar. My definition of restitution for wrong is clearly incompatible with Edelman’s account.

115. An example of an equitable principle which establishes a prohibition of enrichment to the detriment of another is the old Pomponian principle in Digest of Justinian, 50. 17. 206: ‘Iure naturae aequum est neminem cum alterius detrimento et iniuria fieri locupletiorem’ (It is just according to natural law that nobody become richer to the detriment and by the injury of another). See F Giglio, “Restitution for Wrongs: A Structural Analysis” supra note 40 at 23.

116. Weinrib, supra 64 note at 11.

117. Ibid at 12.

118. In general, businesses want to protect information which is regarded as confidential and a valuable commercial asset. This can be done by obtaining promises from employees not to divulge any confidential information in the course of their employment and thereafter. In fact, such promises can also be extracted from business associates who, during the term of business dealings, participate in the holding of confidential information. Both Ter Kah Leng and Susanna Leong suggest that in commercial situations, account for the whole profit should be ordered for contractual breaches of confidence which do not cause the promisee to suffer any financial loss yet lead the promisor to make a profit. Leng, T & Leong, S, “Contractual Protection of Business Confidence” (2002) J Bus L 513 at 513Google Scholar.

119. Furthermore, it is the moral idea that there should be proportionality between wrongs and responses thereto: although the breach in Wrotham Park and Experience Hendrix is wrong, it is a low-intensity wrong as compared with fraud, or breach of trust and fiduciary duties, as in Blake. The response should not, therefore, exceed the magnitude of the breach. The principle of proportionality requires a relation of equivalence between breach and response. In the words of Enzo Cannizzaro, “proportionality … allows the distinguishing among various forms and tools of reaction to wrongful acts … and requires that the response be appropriate to the particular aim sought and not disproportionate to the offence that provoked it.” Cannizzaro, E, “The Role of Proportionality in the Law of International Countermeasures” (2001) 12 EJIL 889 at 915-16CrossRefGoogle Scholar. See also Rendleman, D, “The Inadequate Remedy at Law Prerequisite for an Injunction” (1981) 33 U Fla L Rev 346 at 355-56Google Scholar.

120. See Giglio, supra note 35 at 212, 224.

121. Ibid at 195, 225, 231.

122. See Giglio, supra note 115 at 26.

123. See Giglio, supra note 114 at 501-21.

124. Aristotle, supra note 82 at V, 4, 1132a11.

125. As Giglio has stated: “Corrective justice can account for proper restitutionary damages. This form of justice provides a normative ground for the victim to seize the defendant’s gain independently of any loss suffered by the victim. It isolates the wrongdoer and the victim as the parties to a restitutionary claim. The award is granted because it would be unjust if the wrongdoer could go scot-free with his wrongful gains; and it is granted to the victim because any wrongful behaviour is [morally] detrimental to the sufferer of the injustice.” Giglio, supra note 40 at 34.