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Adras Building Material Ltd V. Harlow And Jones Notes

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ADRAS BUILDING MATERIAL LTD V. HARLOW & JONES (ISRAEL SC) FACTS Adras agreed to purchase 7000 tons of steel from Harlow at DM620 per ton. The seller imported from Poland sufficient steel to fulfill the contract and all but 1,762 tons was duly dispatched. Following the outbreak of the Yom Kippur war and prior to the time for performance, the seller received from a third party an offer to purchase the remainder of the steel for DM804.70 per ton. The seller accepted this offer despite the buyer's protests. The buyer did not purchase an alternative supply on the market but in 1976 it claimed (i) damages for breach of the contract (ii) restitution of the seller's profits. The appellant could not prove any loss because it was not proved that at the relevant time the market price was greater than the agreed contract price. HOLDING S LEVIN I have already said in my judgment that we should not confuse the right to restitution under the Contract (Remedies) Law, s. 9 and the general claim to the unjust enrichment of a breaching party who has been enriched by the breach at the innocent party's expense. In the first case, restitution is meant to put the parties back in the position they were in before the contract. In the second case the aim is to prevent unjust enrichment outside the frame of the contract. I conclude that there is nothing in the existing legislation which prevents the application of the general principle which we have already adopted, according to which a party to the contract who is in breach and received a benefit as a result of the breach at the innocent party's expense must pay this benefit back to the performing party. This result in achieved both by the Unjust enrichment law and also according to the common law prior to the statute. I can see no reason why we should limit the law of restitution to a proprietary right. On the contrary, there are very important reasons against such a limitation. There is no justification for the view that he who is enriched at the other party's expense can retain profits which he made in this way. The argument that there is no harm to any property in such a case as the present is in my opinion, meaningless. Is it not true that the right of a person to sell his merchandise to his customers should be protected in the same way as his right to hold his personal property or his land? Limiting the right to restitution to proprietary rights reminds me of a situation which existed in Israel when a person whose trousers

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