ch.27 - intro to remedies

Question 1

what are the three theories of recovery?

Answer 1

• expectation interest
• reliance interest
• restitution interest

Question 2

what are the 2 types of expectation interests?

Answer 2

• money damages
• specific performance

Question 3

expectation interest approach

Answer 3

• looks to the future
• puts P in the same position as if the contract had been performed

Question 4

reliance interest approach

Answer 4

• looks to the past
• puts P in the same position as if the contract had never formed

Question 5

what type of relief is reliance interest?

Answer 5

money damages

Question 6

restitution interest approach

Answer 6

looks at how the D has been unjustly enriched and disgorges that benefit in favor of the P

Question 7

what are the 2 types of restitution interests?

Answer 7

1. monetary restitution
2. specific restitution

Question 8

expectation interest formula

Answer 8

1. establish starting money position
2. • expected money position after contract had been performed
3. • amount spent

Question 9

when is restitution interest typically used?

Answer 9

1. P sues for restitution specifically, rather than breach of contract
2. Profit a P was to make on a contract was speculative
3. When asserted as a defense

Question 10

specific performance

Answer 10

• Court order that compels the breaching party to perform its contractual duties
• If they do not perform, then they are in contempt of court and subject to sanctions

Question 11

3 requirements for specific performance

Answer 11

1. Inadequacy of money damages
2. Certain and definite terms, and
3. Feasibility

Question 12

consequential damages

Answer 12

• compensate a P for additional losses that are incurred as a result of the D’s breach
• potential loss must have been foreseeable to the breaching party at contract formation
• ex. loss profits

Question 13

incidental damages

Answer 13

reasonable costs in an effort to mitigate losses associated with the breach

Question 14

4 principles courts may use to limit damages

Answer 14

• certainty
• causation
• foreseeability
• mitigation

Question 15

certainty

Answer 15

• there must be a rsbl certainty that a loss occurred bc of the breach & certainty on the dollar amount of damages
• damages cannot be speculative

Question 16

causation

Answer 16

the loss must have been proximately caused by the breach

Question 17

general damages

Answer 17

losses that flow directly and naturally under ordinary circumstances when a particular type of contract is breach

Question 18

2 categories of general damages

Answer 18

1. replacement cost
2. difference in value

Question 19

real estate general damage

Answer 19

diff btwn the contract price and the fair market value of the property at the time of the breach

Question 20

employment contract (employee breach) general damage

Answer 20

the additional cost incurred by the employer to purchase the same services

Question 21

employment contract (employer breach) general damage

Answer 21

the salary due under the contract less any amount earned in other employment

Question 22

construction/service contract (contractor breach) general damages

Answer 22

rsbl additional cost or the diminution in value of the property caused by the breach

Question 23

construction/service contract (contracting party breach) general damages

Answer 23

costs expended by contractor up until the breach plus the profit the contractor would have earned had the contract been fully performed

Question 24

3 ways in which money damages should be offset or adjusted

Answer 24

1. prepayments made by breaching party
2. non-breaching party reduces loss through mitigation
3. breach results in a gain for non-breaching party