Christian Kjaer and his relatives (Sellers) owned a small island off the coast of St. Thomas, U.S. Virgin Islands. Some investors, led by Miami Dolphins football player Jason Taylor agreed to buy it for $21 million. 

Under the contract, Taylor paid a $1 million deposit and promised to close within 60 days. The contract allowed him to extend the closing date by paying an additional $500,000 nonrefundable deposit, which he did. The buyers’ only other duty was to pay the remaining purchase price at closing. The Sellers committed to delivering clear title to the property, along with all of the island’s permits. 

According to the contract, if Taylor breached the contract, he would forfeit the deposits; if the Sellers breached, they would return the deposits. The contract did not say what would happen to the deposit it both parties breached.

On the closing date, the sale was not consummated; the Sellers delivered expired permits and did not convey clear title. Taylor and his partners did not pay. But the Sellers refused to return Taylor’s deposit.

Taylor sued for restitution. The Sellers asserted they were entitled to the $1.5 million because Taylor breached the contract. Taylor argued that the Buyer’s failure to deliver valid title discharged his obligation to close—and that allowing the Sellers to keep the money would unjustly enrich them. The district court found that since Taylor breached the valid contract, he could not recoup the deposit. Taylor challenged the lower court’s call.

Questions:

1. Was Taylor entitled to restitution?

2. Generally, when does an agreement concerning an exchange of promises require performance to be exchanged?

3. On what authority did the court rely in determining whether to award restitution in this case?

4. What is a restitution interest designed to do?