In a scenario where a party withdraws from an illegal contract before the illegal purpose is achieved, restitution is possible if the party did not engage in serious misconduct.

• A. The withdrawing party is never entitled to restitution.
• B. The withdrawing party may recover only if the other party was unaware of illegality.
• C. The withdrawing party may recover the amount paid if there was no serious misconduct.
• D. Restitution is always available regardless of misconduct.

Answer: (C)

When a contract is illegal for its purpose, courts won’t enforce it, but they may still allow restitution to a party who withdraws before the illicit objective is achieved, provided that party did not participate in or knowingly facilitate the illegality. The key idea is fairness: it would be unjust to keep someone from recovering money paid when they stepped away before the wrongdoing succeeded and they were not themselves guilty of serious misconduct. So, the withdrawing party can recover the amount paid if there was no serious misconduct by them.

That’s why the correct idea is that restitution may be available for the withdrawing party if there was no serious misconduct. The other options don’t fit: restitution isn’t automatic in all cases, it isn’t conditioned on the other party’s lack of knowledge, and it isn’t entirely barred even though the contract is illegal.