Under some circumstances the recipient of a benefit conferred in reliance upon a supposed contract which turns out to be non-existent because the offer was never actually accepted may justly decline to make restitution. Whether or not this right to retain the benefit exists in a given case depends upon the answer to the following questions:
(a) Did the recipient of the benefit know or have reason to believe that compensation was expected?
(6) If not, has that which was received, or in case of money, its application, saved him from the expenditure of money or the assumption of pecuniary obligation?
It should be noted, however, that if, or as long as, the benefit conferred may be returned in specie, the obligation to restore is unaffected by these considerations. For whether or not the benefit was believed to be a gift, and whether or not it would have been acquired by contract, had it not been believed to be a gift, the fact that it was conferred in misreliance upon a supposed right to compensation makes its retention in specie, after the discovery of the mistake, clearly unjust. But if the thing received is consumed, as may happen, for example, in the case of household provisions, or is of such a character that it cannot in the nature of things be returned in specie, as in the case of services rendered, the justice of refusing restitution in value depends upon the answer to the questions above stated.
1 See Boston Ice Co. v. Potter, 1877, 123 Mass. 28; 25 Am. Rep. 9, (which, however, as will be seen later, differs materially from the case supposed); Barnes v. Shoemaker, 1887, 112 Ind. 512; 14 N. E. 367.