In the earlier days of the common law the only remedy for breach of contract was the action for compensatory damages. The right to elect restitution instead of compensation appears to have been recognized for the first time in 1721;2 but it was not thoroughly established until Lord Mansfield's day. In most of the early cases the action was for the recovery of money paid on contracts subsequently repudiated by the defendant. It was in a case of this sort, Towers v. Barrett,3 that Lord Mansfield said: "I am a great friend of the action for money had and received; it is a very beneficial action, and founded on principles of eternal justice." This suggests the probable reason for permitting an election - a feeling that the plaintiff had at least lost his money and that the return of his money was a simpler adjustment of rights than the assessment of the damages suffered by the plaintiff as a result of the refusal of the defendant to perform his contract. It is noteworthy that while the remedy of restitution was not permitted by the Roman law it was allowed by the Code Napoleon, and has recently become almost uniformly available in Germany.1
1 "A fallacy may possibly lurk in the use of the word 'rescission.' It is perfectly true that a contract, as it is made by the joint will of two parties can only be rescinded by the joint will of the two parties, but we are dealing here, not with the right of one party to rescind the contract, but with his right to treat a wrongful repudiation of the contract by the other party as a complete renunciation of it." - Bowen, L.J., in Mersey Steel & Iron Co. v. Naylor, 1882, 9 Q. B. D. 648, 671.
2 Dutch v. Warren, 1721, 1 Str. 406, (money advanced to buy stock); Anon., 1721, 1 Str. 407, (money advanced to buy stock).
3 1786, 1 Term R. 133, 134.