2. Contract, tort and restitution

Contract facilitates and enforces voluntary exchanges. Tort imposes standards of behaviour whether or not there was a deal. Restitution stops one person being unjustly enriched at another's expense, for example money paid by mistake.

The same facts can give rise to more than one claim. Take a builder whose negligence brings a wall down. The building owner may sue in contract because the wall was defective. An injured stranger may sue in tort. If the injured person is the other party to the contract, both claims can sit together. Donoghue v Stevenson as the tort side of that overlap.

Restitution is often used where people were trying to make a contract and the attempt failed. There is no need for a completed exchange, and no need to show that anyone fell below a standard of care.

People sometimes separate the three by the measure of damages. In contract the usual aim is the expectation interest: put the claimant where they would have been if the contract had been performed, including lost profit. In tort the usual aim is to put them where they would have been if the wrong had not happened: loss suffered, not the profit they hoped for. In restitution the aim is to give back the property or the benefit that should not have been kept.

That is the wrong end to start from. Liability comes first. The remedy follows from it. A contract claim is not locked to expectation damages. A breach of contract can be compensated on any of the three bases: expectation, the tort measure (actual loss, not the expected gain), or restitution.