Promissory restitution is a legal theory that allows you to recover compensation for services rendered even if no contract was formed. To use this theory, two things must be shown. First, you must give a benefit to another that was not paid for. Second, the other party must expressly promise to pay after the benefit was received. If the other party then refuses to pay, you can sue them for payment under promissory restitution.
Promissory restitution is a valid legal claim although not all courts recognize it. Here are some examples:
- Bankruptcy – When people file for bankruptcy, their debts are often discharged. However, some courts hold that expressly promising to pay off certain debts before filing for bankruptcy will not discharge the debt. This debt can be recovered based on promissory restitution.
- Material Benefit – Regardless of the situation, many states allow a promissory restitution claim if a person has rendered a material benefit on another. If the person who received the benefit later promises to pay for it, the promise is legally enforceable. What is considered a material benefit will depend on the situation.
- Saving someone’s life – This is obviously a material benefit to the person that was rescued. However, you can only recover under promissory restitution if the other person offers to compensate you. Otherwise, the rescued person is under no legal obligation to pay you anything despite your heroic efforts.
Courts will vary on whether they will enforce a promise to pay based on promissory restitution. Most courts will allow recovery if a material benefit was given to the person making the promise to pay. However, some courts hold that such promises are simply moral obligations with no legal effect.
Promissory restitution is strictly a legal theory that is not commonly used. If you believe that you do have a promissory restitution claim, you should consult an experienced business attorney to pursue the claim. Promissory restitution is not recognized in all courts, and an experienced attorney will be able to tell your chances of a successful claim.