Restitution, in its simplest sense, is making good, or setting something right. Restitution is the act of restoring to the rightful owner something that which was taken from him or her.
Restitution involves the principle of fairness, and it implies that no one should be unjustly awarded in any situation. Restitution is used in contract law in situations where one party cannot collect from the other or where a contract has been breached. A court can impose restitution for goods, services, or money.
For example, let's say a car dealer sells a car to a minor. The minor can void the contract, either by not paying or by stopping payments. But if the car is not returned or is damaged, the minor must make restitution by paying for the car and the damage. (Read more about contracts with minors
In tort law and liability issues, restitution usually consists of damages determined by the court depending on the facts of the case, to "make whole" the aggrieved party. For example, if one party is harmed by the actions of another, the court may impose damages - payment for the injury. In some cases, damages may be punitive (for punishment), rather than compensatory (for restitution).