Chapter 12

Question 1

Recission

Answer 1

Cancellation of contract with aim to return parties to original positions

Question 2

Damages

Answer 2

Award money intended to cure a wrongful event

Question 3

Reasons plaintiff is awarded monetary value instead of actual promised thing

Answer 3

• jurisdiction: courts of law do not have authority to compel defendant to do anything besides pay money
• money matters: business transactions are done through money
• expectation substitute: money can be used to purchase another of the expected object
• convenience: it would be inconvenient to award something other than money

Question 4

Expectation damages

Answer 4

Monetary value of the benefit that the plaintiff expected to achieve under the contract

Damages are forward looking: where would plaintiff be if defendant had performed

Question 5

Calculation of expectation damages

Answer 5

=expected benefits under contract-cost under contract

A loss will=$0 expectation damages

Question 6

Cost of cure

Answer 6

Price it would cost another party to complete the work in question

Question 7

Cost of loss of value

Answer 7

Damages awarded based on the loss in an agreement

Question 8

Alternative performance

Answer 8

Contract allows defendant to perform in a variety of ways

Question 9

Intangible loss

Answer 9

A loss that does not have any apparent economic value

-anger, disappointment etc.

Question 10

Peace of mind

Answer 10

Recognized by the Supreme Court , relief may be available if contract was performed in a way that disappointment plaintiff’s expectations and caused distress

Question 11

Remote (loss)

Answer 11

Unfair to hold defendant legally responsible

Question 12

Test for remoteness

Answer 12

Subjective test:
-maybe impose liability if defendant knew plaintiff would suffer loss due to breach of contract
Objective test:
-liability imposed if a reasonable person would have recognized potential loss

Question 13

Mitigation of damages

Answer 13

Plaintiff takes steps to minimize loss flowing form defendants breach

Question 14

Duty to mitigate

Answer 14

It’s bad business not to mitigate

Question 15

Cost of mitigation

Answer 15

Plaintiff can recover costs of mitigation it persued to avoid loss+actual loss

Question 16

Reliance damages

Answer 16

Monetary value of the expenses and opportunities that the plaintiff wasted under a contract

Question 17

Accounts of profits

Answer 17

Focus on defendant’s gain (plaintiff is entitled to defendants gains from breach of contract)

Question 18

Nominal damages

Answer 18

Small damages to recognize that a wrong was committed but there was no gain for defendant/loss for plaintiff

Question 19

Liquidated damages

Answer 19

A clause in contract that attempts to estimate value of a potential loss that occurs as a result of breach

Question 20

Penalty

Answer 20

Negative incentive to get a party to perform

Question 21

Unjust enrichment

Answer 21

Has three requirements to prove existence:

1) enrichment to defendant
2) corresponding deprivation to plaintiff
3) absence of any juristic reason for defendants enrichment

Question 22

Remedy for unjust enrichment

Answer 22

Always restitution

-contract trumps unjust enrichment because it provides a reason for the enrichment