10/15/13

Question 1

What is a nominal damage?

Answer 1

Plaintiff has proven in fact a breach of contract but has failed to prove/show any damages resulting from that breach

Question 2

What is a compensatory damage?

Answer 2

Relates to loss of reasonable, anticipated profits

Question 3

What are consequential damages?

Answer 3

Damages that will naturally flow as a consequence of the breach (both parties had foreseeability)

Question 4

What are liquidated damages?

Answer 4

Clause that is entered into the contract at the time when both parties enter the contract (good faith estimate by both sides as to a monetary amount that will serve as and for damages and in settlement of any breach)

Question 5

What are punitive damages?

Answer 5

Generally not allowed; exception: if the non-breaching party can prove to the court that the defendant acted with fraud, the court will seriously consider punitive damages (not intended to compensate plaintiff but punish defendant)

Question 6

What is an injunction?

Answer 6

a restraining order issued by the court (evidence presented by the other side that actions of a person will result in irreparable harm/injury)

Question 7

What is an order of specific performance?

Answer 7

Courts are reluctant to issue this order; compelling defendant to perform as nearly as practible as possible (problem; you can’t force someone to do something they don’t want to do)

Question 8

What are the 3 factors to an order of specific performance?

Answer 8

1. Both sides entered into the contract with good faith
2. Nature of the subject matter of the contract was rare/unique (real estate, painting,…)
3. Money damages will not suffice

Question 9

What are legal defenses if you breach a contract?

Answer 9

1) Minor: void
2) Intoxicated person: voidable
3) Mentally incompetent: void/voidable
4) Impossibility of performance
5) Frustration of purpose
6) Duress

Question 10

What is an impossibility of performance?

Answer 10

2 parties entered into a contract in good faith; did not anticipate/contemplate some intervening event that, when occurring, renders performance to be commercially impractible (if not impossible)

Question 11

What is a frustration of purpose?

Answer 11

2 parties enter into a contract in good faith and very essence/core/basis of contract itself is rendered to be worthless and meaningless because of some intervening event

Question 12

What is duress?

Answer 12

One of the parties does not voluntarily agree to the contract but does so because of some imminent threat to one’s personality/property

Question 13

What is a restrictive covenant?

Answer 13

Non-compete clause; time restraints, geographical constraints, ability of employee to secure gainful employment elsewhere