Disgorgement in private law

An increasing number of tenants participates in the ‘sharing economy’ by using Airbnb to sublet (part of) their accommodation to tourists. Many of them do so in violation of a prohibition to sublet in their tenancy agreement. An aggrieved landlord is entitled in most legal systems to evict his tenant on this basis (judicial rescission) and to claim compensation for any loss he incurs as a result of the illegal subletting. To the extent his property has not been damaged by Airbnb users, there is however no loss which the landlord can claim compensation for from his tenant. The law thus allows the tenant to retain the entire profit from his illegal subletting, whereas the landlord loses his rental income if he files for rescission.

In most legal systems, the profits of crimes can be forfeited to the State to prevent crime from being rewarding. There is however no system under general private law that systematically prevents people from benefiting from their own wrongdoing. Dutch and Swiss civil law allow the aggrieved landlord to claim the profit obtained by his defaulting tenant to ensure his breach of contract is not profitable. Most other European legal systems are either unfamiliar with such
remedy under civil law, or award it in disparate and very isolated instances only. This research analyses to what extent a person wronged by a breach of contract or a tort is entitled to claim the benefits obtained by the wrongdoer as a remedy under general private law.