Application of remedies to K cases

Question 1

K to buy and sell personal property

Answer 1

Damages are usually adequate remedy

Specific performance will NOT be available, unless if chattel is unique or if damages are highly speculative (output contracts)

Question 2

Real Property Money Damages

Answer 2

If Seller breaches, B gets out-of-pocket loss or benefit of bargain, depending on J*

If Buyer breaches, S recovers difference between MV and the K price, plus consequential damages

Question 3

Real Property Restitution Damages

Answer 3

If fraud or material breach of K, P can rescind and get benefits conferred

Question 4

Specific Performance of real property

Answer 4

LAND IS UNIQUE – look out for questions describing generic land and telling you seller is wiling to give buyer similar or even better land next door. All land is considered unique.

If P is Seller, if defect is minor, can get SP. if major, CANNOT get SP, unless if seller can cure the defect by closing

If P is Buyer, can enforce contract even if defect is major. however, can’t if its VERY major.

NOTE: use the word ABATEMENT – always mention that court will LOWER purchase price to take into consideration the defect

Question 5

Time is of the Essence Condition

Answer 5

Situation when K has a time is of the essence clause and it contains a forfeiture provision to give all money paid up until that point

EQUITY ABHORS FORFEITURES

Factors for SP: (1) loss to seller is small; (2) tardiness is de minimis; (3) waiver (seller has accepted late payments in past); (4) B would suffer undue hardship

Question 6

Construction K money damages

Answer 6

Owner breach: Builder recovers lost profits if contract is wholly executory; K price if contract is completed; or K price less cost of completion if K is partially performed

Builder Breach: if substantially performed, owner recovers cost of restoration unless if it would produce economic waste; if waste, recovery is limited to diminution in value. If material breach, owner gets cost of completion less payments due, plus compensation for delay

Question 7

Restitution in construction K

Answer 7

If owner breaches, bulder can rescind and recover value of benefit conferred

if builder breaches, owner is usually not entitled to restitution

Question 8

Specific Performance

Answer 8

Supervision problems. But today courts are willing to overlook feasibility problems

Question 9

Personal Services Contracts Money Damages

Answer 9

If employee breaches, employer recovers cost of obtaining a replacement

If employer breaches, employee gets wages due or promised, less avoidable damages

NOTE: could be tortious if wrongful, thus lost wages and emotional distress and punitive damages may be implicated

Question 10

Restitution damages in personal service K

Answer 10

if employer breaches, employee entitled to reasonable value of the services rendered (even if in excess of K rate)

If employee breaches, employer can get restitution of paid but unearned wages

Question 11

Specific performance

Answer 11

Feasibility problems and involuntary servitude

Question 12

Noncompete agreements

Answer 12

enforceable if (1) the services are unique or trade secrets are involved; and (2) the scope of the noncompete is reasonable