5. Remedies for Nonperformance

Question 1

Nonmonetary Remedies (In Rem)

Answer 1

1) Specific Performance/Injunction
2) Seller’s Reclamation of Goods from Insolvent Buyer.
3) Entrustment

Question 2

Seller’s Reclamation of Goods from Insolvent Buyer requires:

Answer 2

1) The buyer must have been insolvent at the time they received the goods AND
2) the seller demands return of goods within 10 days of receipt, AND
3) the buyer still has the goods at the time of demand.

Question 3

Money Damages for breach, policy:

Answer 3

Compensate plaintiff, not punish defendant. (NEVER PUNITIVE DAMAGES)

Question 4

General Approach to Measuring Monetary Damages:

Answer 4

Protection of Expectation. Look for:

1) Facts for dollar value of performance without breach
2) Facts for dollar value of performance with breach, AND
3) compare the two to determine amount of damages.

Question 5

Money Damages Related to Sale of Goods, three relevant facts:

Answer 5

1) WHO breached?
2) WHO has the goods?
3) Was there a later replacement deal?

Question 6

When seller breaches and buyer keeps the goods, damages are:

Answer 6

[Fair market value if perfect - fair market value as delivered] OR [Cost of Repair]

Question 7

When seller breaches and seller still has the goods, damages are:

Answer 7

[Market price at time of discovery of the breach - Contract price] OR [Reasonable replacement price - Contract price] WHICHEVER IS GREATER

Question 8

When buyer breaches, and buyer keeps the goods, damages are:

Answer 8

The Contract Price

Question 9

When buyer breaches, and the seller has the goods, damages are:

Answer 9

[Contract price - Resale] However, if seller cannot resell the seller can recover the contract price and, in some situations, provable lost profits.

Question 10

Incidental damages are

Answer 10

Costs incurred in dealing with the breach. (costs of storing rejected goods, cost of finding a replacement for services contracts)

Question 11

Consequential damages are

Answer 11

losses that are SPECIAL to the plaintiff, as long as defendant was on notice/had reason to know of the particular/special ramifications of the breach.

Question 12

Avoidable Damages as a Defense provides:

Answer 12

no recovery for damages that could have been avoided without undue burden.

Question 13

Liquidated Damages clauses will be struck down unless

Answer 13

1) Damages are difficult to forecast at the time contract is made and 2) provision is reasonable, in context.