Restitution for Mistaken Gifts

• Main Author: TANG, Hang Wu
• Format: text
• Language: English
• Published: Institutional Knowledge at Singapore Management University 2004
• Subjects: Contracts
• Online Access: https://ink.library.smu.edu.sg/sol_research/1331
• Institution: Singapore Management University

This paper investigates when a donor is entitled to restitution for an executed inter vivos gift made pursuant to a mistake. The causal mistake approach adopted by some leading works is considered, critiqued and rejected as a framework to analyse mistaken gifts. The central thesis of this paper is that a gift is an important transaction which engenders social bonds such as love, affection, intimacy, friendship, trust and gratitude, and these bonds influence the parties’ future conduct in the social sphere. This process has been termed as creating a moral economy. Therefore, just as it is important to protect the market economy from being subverted by the law of restitution by recognising the sanctity of contracts, it is equally essential to protect the moral economy by defending the completed gift from an overzealous application of the law of restitution. The conclusion reached is that a more appropriate analysis is to use a hybrid approach; that is, a failure of basis test and a serious mistake test in deciding when a restitutionary response ought to be ordered for a mistaken gift.