All Stars Flashcards
Cover
If market price has risen, a replacement price, then you should get difference between original K and the value you paid for new mkt price
General Damages
Difference between old K price and rental value of unexpired term
Where P has mitigated, the difference between old K price and new K price
Special/Consequential Damages
(test = breaching party’s knowledge)
Hadley = In addition to general damages, an injured party may also recover consequential damages if these are reasonably foreseeable as a probable consequence of the breach at or before the time of contracting.
Limitation of Remedy Clause
modifies that remedy, and states that buyer is instead only entitled to a 4 “R” remedy: (i) R or R [repair or replace] or (ii) R and R [return and refund].
Limitation of remedy (2-719) clauses are invalid if they fail of their essential purpose whereas
- If fail essential purpose = measure general damages (difference between old K price and new K price; if there is a warranty, the difference between warranted machine and the value of the machine received) and potentially consequential damages like lost profits if disclaimer is unconscionable (if you can prove foreseeability)
Liquidated Damages Clauses
Liquidated damages (2-718) clauses are invalid when they are too high because they act as a penalty AND sometimes when they are too low (if they are exclusive) where (1) the injured party does not have a minimally adequate remedy (which the UCC requires) or (2) if they are unconscionable (Commercial)
Mitigation
General rule of mitigation of damages (i.e., although there is technically no “duty” to mitigate, damages that could have been (but were not) mitigated are not recoverable) and COVER
Exceptions:
- To mitigate, the non-breaching party need only act reasonably (rather than optimally)
- If both parties can mitigate, the breaching party cannot raise as a defense the non-breaching party’s failure to mitigate, especially where their breach was in bad faith (i.e. estoppel)
Certainty Requirement
Damages must generally be proved with reasonable certainty, but this requirement is relaxed where defendant’s wrongful conduct prevents plaintiff from meeting this standard
Although damages may not be “based on speculation or guesswork,” P may recover by providing a “just and reasonable estimate” of damages, so long as it affords “a sufficient basis for the jury’s computation of damage.”
Interference with Business Ability to Earn
The going-concern (or ex ante) method: award the difference between the fair market value (FMV) of an injured business immediately before and immediately after the wrong.
The lost-profits (or ex post) method: award the stream of profits an injured business would have made but for defendant’s wrongful act. There are two main ways to do this:
- The yardstick method: compare the profits an injured business made to the profits a comparable uninjured business made.
- The before-and-after method: compare the profits a business made while it was injured to the profits it made before or after its injury.
Punitive Damages
= exist not only to punish and deter but also, in part,
(1) “to relieve the pressures on an overloaded system of criminal justice by providing a civil alternative to criminal prosecution”, to
(2) “limit[] the defendant’s ability to profit from its [wrong] by escaping detections and … prosecution”, and
(3) to incentivize Ps by helping to finance lawsuits.
Factors for Excessive Punitives
Degree of reprehensibility (of D’s conduct)
Holmes Bad Man → Ford did cost-benefit analysis and knew drivers were in danger of accidents but chose to proceed
Wealth of D
Amount of compensatory damages
Amount needed to achieve adequate deterrence
Court also looked at:
(1) ratio of compensatories to punitives,
(2) other criminal/civil penalties, and
(3) probability of detection, prosecution, etc.
Factors to consider Cessation
Where a party voluntarily ceased engaging in lawful activities, courts should focus on consider:
(1) bona fides of D’s intent to comply (do you believe that the party won’t do it again),
(2) effectiveness of D’s discontinuance (how costly was this for them to cease these activities), and
(3) character of D’s past violations.
If the threat of the wrong goes away, the need for an injunction may also go away (subject to the court’s equitable discretion).
Kinds of Injunctions
Preventive injunctions = prevent a wrongdoer from engaging in an activity that is going to injure the party who is protected by the right;
Reparative injunctions = restore party in kind; restore victim to position he would have occupied had the wrongful harm not occurred
Preliminary injunctions = an injunction that is issued before a final adjudication on the merits; there is no adjudicated wrongdoer
Temporary restraining orders = automatically expires after a 14-day period; another type of preliminary injunction
Replevin
procedure whereby seized goods may be provisionally restored to their owner pending the outcome of an action to determine the rights of the parties concerned.
Replevin is NOT an equitable remedy, it is a legal remedy. Thus, you don’t need to satisfy the IIR, and P does not need to demonstrate that goods are unique or irreplaceable to get them back. Instead, P need only show a greater legal right to them than D. Replevin is enforced by sheriff’s seizure of property rather than (as with an injunction) contempt, unless modified by statute.
Undue Hardship Defense
To successfully assert the undue hardship defense (which looks a lot like L&E cost-benefit test), the hardship imposed on Ds must be greatly disproportionate to the benefits gained by the Ps. The defense is always subject to a moral/equitable standard – Ds who behave willfully cannot use this defense because courts worry about Ds (1) acting like Holmes’s bad man by (2) bypassing the market where bargaining was possible and (3) creating a private power of eminent domain (i.e., single-handedly converting property rules into liability rules).
Laches
equitable analog of statute of limitations (principle rather than a hard and fast rule) D might argue P unreasonably delayed bringing cause of action, but here, Hilander provided assurances to P.
May be withheld if (1) P unreasonably delays in pursuing a remedy so that (2) it results in prejudice to D. If you succeed in showing laches, the plaintiff will get a legal remedy instead.
