Notes on the Reliance Interest

The topic is Contract Damages. The interests are defined by how we protect them. Imagine a breaching promisor. We protect the reliance interest of the promisee by requiring the promisor to put her in a position as good as she would have been in had the parties not contracted.

The other interests are the restitution interest, which we protect by requiring the promisor to give back what the promisee has given him; and the expectation interest, which we protect by requiring the promisor to put the promisee in a position as good as she would have been in had he kept his promise. In a sense the reliance interest is intermediate between the other two interests. A promisee might rely otherwise than by giving the promisor what a restitutionary remedy will make him give back, and she enters a contract expecting to be better off by doing this than she would be by not doing it (unless she would expect, if she did not enter this contract, to enter a contract similar to it). The definitions of the interests are by Fuller but the second Restatement adopts them.