Restitution Sans Rescission: Exposing the Myth of a Fallacy

Just prior to the Christmas break, I had a very interesting meeting with Daniel Morris of HHG Legal Group – Perth WA. Daniel told me about a very interesting paper he has written which challenges how we consider a contractors rights. The abstract of the paper is as follows.

Critics of Renard Constructions (ME) Pty Ltd v Minister for Public Works (1992) 26 NSWLR 234 say the Court in that case confused termination with rescission when awarding restitutionary quantum meruit (“RQM”) to the plaintiff contractor against the repudiating principal. This alleged confusion became known as the “rescission fallacy”. This paper seeks to disprove the existence of the rescission fallacy and goes on to argue that in fact, Renard and subsequent cases did not go far enough because they only established the contractor’s right to “get what its work is worth” where the contract’s failure was the principal’s fault. In fact, a repudiating contractor should be recognised as having the same rights because RQM has not been fault-based since unjust enrichment replaced implied promise or quasi-contract as the juridical basis for RQM awards.

For interested parties who wish to view the full paper, it is published by the Australian Law Journal.

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