© Springer International Publishing Switzerland 2015Ewoud Hondius and André Janssen (eds.)Disgorgement of ProfitsIus Comparatum – Global Studies in Comparative Law810.1007/978-3-319-18759-4_10
10. Disgorgement of Profits Under Spanish Law
University Pompeu Fabra, Ramon Trias Fargas 25-27, E-08005 Barcelona, Spain
Carlos Gomez Ligüerre
Spanish Civil Code rejected the idea of including a general regulation on unjust enrichment. Hence, restitutionary remedies have been usually understood as a by-product of a proper compensation in cases of tort and breach of contract. Spanish private law has set aside unjust enrichment claims, mostly designed by the case law as a subsidiary remedy only available in specific cases. Such particular view of the restitution explains that Spanish private law lacks a general theory on disgorgement. Disgorging profits is just possible in a couple of specific situations statutorily established. In addition, disgorgement is understood as a proxy of compensation in cases in which the asses of damages is unfeasible.
KeywordsUnjust enrichmentImplied contractsRemedies
Professor of Private Law at the University Pompeu Fabra (Barcelona, Spain) where he holds a position as Profesor Titular de Universidad.
The Legal Distinction Between Contracts and Torts
The Spanish Civil Code was enacted in 1889 and it followed the model of the French Civil Code of 1804. Like in the French case, the Spanish Civil Code abhorred limitations to the freedom of contract and the freedom of transfer the property rights. There is no duty to transfer the assets by their fair or accurate price. According to the liberal view of the Spanish Code, the market should be the only way of determining the transferability of assets and their price.1 Under such a way of understanding private relationships within the market, the contract is the best way for conveying assets voluntarily, while torts are the proper means for redressing the involuntary transfers of wealth.
Following the pattern of the French Civil Code, the Spanish Civil Code drafted a system of remedies mostly based in a clear distinction between breach of contract and tort. The former tries to grant to the victim of a breach of contract with the expectation damages, while the latter is limited to the reliance damages. In other words, remedies for breach of contract intend to leave the victim in the same position he should enjoy if the contract would have been duly performed. Tort remedies aim to compensate to the victim for loss or injury by reverting the victim, as far as possible, to the position before such loss or injury occurred.2
Although the most of the parts of the Spanish Civil Code have been modified since its enactment, the aforementioned distinction has remained unaltered. Accordingly, rights as well as remedies for their protection arise under Spanish private law either from a contract or from a tort. Hence, the Spanish Civil Code provides remedies for the protection of contractual rights and general tort remedies as well. The two categories should always fit in the real cases since the scope of the Spanish tort law includes all kind of harms and losses. As was done before by article 1382 of the French Civil Code,3 the article 1902 of the Spanish Civil Code sets forth the general rule on tort law in very broad and general terms.4 Tort claim does not require the breach of specific statutory duties or a reckless behavior against particular rights. The tort claim is not restricted to specific situations.5 Under Spanish law, the tort claim may include any kind of harm or loss suffered by the victim, economic as well as non-economic, with no other limits than those required by the cause-in-fact and the proximate causation (objektive Zurechnungslehre) links.
Therefore, in the structure of liabilities and remedies designed by the drafters of the Spanish Civil Code what should not be claimed as a result of a contractual breach, should be protected by a tort claim. The loss should be only the consequence of either a wrongful breach of contract or the causation of harmful consequences by a tortfeasor.
The only exception to the dual system of liability and remedies envisaged by the Spanish Civil Code consists of the regulation of the so-called “quasi-contracts” or “implied-contracts”. Spanish Civil Code includes two of them: the management of another business (negotiorum gestio) and the payment or collection of undue debts (indebiti solutio).
Differently from the remedies designed for breach of contract and tort situations, “quasi contracts” deserved just a restitutionary remedy based on the devolution of, first, what was unduly paid or, second, the payment of what was done without a previous order or assignment. In any case, the restitution is limited to the real advantage provided as a consequence of the management or the payment done outside a contractual relationship.
Legal scholars agree on the exceptional nature of the «quasi contracts». They are uncommon means of recovery in specific situations that cannot be applied analogically.6 They are exceptions to the general idea according to which the explanation of the transfer of assets has to do only either with valid contracts or with the compensation due to torts.
The Case of the Unjust Enrichment. Restitutionary Versus Compensatory Remedies
The legal system should enhance enrichments and all of them are fair, unless they have been obtained as a consequence of a void or invalid contract or as a consequence of a wrong. If the contract is invalid or it has been not duly performed, contractual remedies will arise. If there is no contractual relationship between the tortfeasor and the victim, redresses in case of tort will apply. There is no place, at least in theory, for a third way of imposing liability, a tertium genus, concerned with unfair attributions of assets. Everyone benefitted at another’s expense is committing either a breach of contract or a tort.
In fact, by introducing the requirement of a valid “causa”, a legal ground that gives validity to the contract,7 the Spanish Civil Code is widening the realm of the contractual remedies. Each and every transfer should correspond with a valid and legal ground.8 Contracts as well as the transfer of assets made by virtue of them are valid only to the extent that they correspond with a legal ground. Contracts made against mandatory rules or pursuing illegitimate goals will be void because of the unfairness of its “causa”. The necessity of a legal ground for a valid contract introduces into the scope of the contractual remedies situations that otherwise would be covered by the traditional doctrine of the unjust enrichment.
However, Spanish private law has traditionally faced problems when dealing with situations that have two common features: First, they imply a transfer of assets; and second, they are neither contract nor tort. Such situations can arise from a different set of situations. Some of them come up as a consequence of the breach of fiduciary duties. Some are consequences of the unauthorized use of a thing or right vested to another. Some, finally, refer to enrichments obtained by chance, like some kinds of encroachment.
All of them have in common that someone has got some enrichment. Since such a transfer of assets has been made beyond or independently of the performance of a specific contract, compensatory remedies based on expectation damages are not an accurate redress. Since such enrichment is not a consequence of a wrongful action, the situation cannot be dealt with as a tort. However, since the enrichment has been obtained without a legal ground it can be deemed as unjust or unjustified and a restitutionary remedy should apply.
Hence, despite the absence of a general regulation of the unjust enrichment in the Civil Code, Spanish case law has traditionally considered the victim of an unjust enrichment entitled to relief.9 The claim is subject to three requirements: