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Law School Case Brief

Osteen v. Johnson - 473 P.2d 184 (Colo. App. 1970)

Rule:

The remedy of restitution is available where there has been a contract breach of vital importance, variously defined as a substantial breach or a breach which goes to the essence of the contract. In the case of a breach by non-performance, the injured party's alternative remedy by way of restitution depends upon the extent of the non-performance by the defendant. The defendant's breach may be nothing but a failure to perform some minor part of his contractual duty. Such a minor non-performance is a breach of contract and an action for damages can be maintained. The injured party, however, can not maintain an action for restitution of what he has given the defendant unless the defendant's non-performance is so material that it is held to go to the essence; it must be such a breach as would discharge the injured party from any further contractual duty on his own part. Such a vital breach by the defendant operates, with respect to the right of restitution, in the same way that a repudiation of the contractual obligation would operate. A minor breach by one party does not discharge the contractual duty of the other party; and the latter being still bound to perform as agreed can not be entitled to the restitution of payments already made by him or to the value of other part performances rendered.

Facts:

Parents of a child musician entered into an agreement where they paid a promoter $2500 to promote their child's musical career. The parents ultimately brought an action for breach of oral contract, and the trial court found that they were entitled to $1 in damages owing to the promoter's mislabeling of one of the child's records. 

Issue:

Were the parents entitled to restitution damages stemming from the promoter's failure to press and mail out copies of the child's records?

Answer:

Yes

Conclusion:

The court reversed and remanded the trial court's judgment, finding that the parents were entitled to restitution damages stemming from the promoter's failure to press and mail out copies of the child's records. The court noted that restitution was appropriate where there had been a substantial breach in the contract. Further, the court found that it was unnecessary for the parents, as plaintiffs, to plead a particular theory of relief in order for them to have been entitled to relief. Finally, the court noted that as restitution was inappropriate unless a plaintiff returned any partial performance by a defendant, the amount for which the promoter would be liable to the parents would be equal to $2500 less the reasonable value of the services that he provided.

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