Chapter 14: Breach and Remedies Flashcards
What are the types of Damages?
Compensatory
Consequential
Punitive
Nominal
Covers direct losses and costs
Compensatory Damges
Damages that compensate the nonbreaching party for the loss of the bargain
Compensatory Damages
Only for damages actually sustained and proved to have arisen directly from the loss of the bargain caused by the breach of contract
Compensatory Damages
Replaces what was lost
Compensatory Damages
Damages that compensate for expenses directly because of a breach of contract
Incidental Damages
Usual measurement of the damages of sale of goods is the difference between
Contract price and the Market Price
The remedy for sale of land is
Specific Performance
The measure of damages of sale of land is the difference between the
Contract Price and Market Price
When a contractor breaches the construction contract, the measure of damages is
Cost of completion
Reasonable compensation for any delay in performance
When a contractor finishes construction late, the measure of damages is
Loss of use
Covers indirect and foreseeable losses
Consequential Damages
Special Damages
Consequential Damages
Foreseeable damages that result from a party’s breach of contract but are caused by special circumstances beyond the contract itself
Consequential Damages
Punishes and deters wrongdoing
Punitive Damages
Generally not awarded in an action for breach of contract
Punitive Damages
Recognizes wrongdoing when no monetary loss is shown
Nominal Damages
A small monetary award granted to a plaintiff when no actual damage was suffered
Nominal Damages
The requirement that a plaintiff do whatever is reasonable to minimize the damages caused by the defendant
Mitigation of Damages
Required action in mitigation of damages depends on what?
The nature of the situation
A person whose employment has been wrongfully terminated has a duty to mitigate damages incurred because of the employer’s
Breach of the employment contract
An amount stipulated in a contract, that the parties to the contract believe to be a reasonable estimation of the damages that will occur in the event of a breach
Liquidated Damages
A contract clause that specifies a certain amount to be paid in the event of a default or breach of contract but is unenforceable because it is designed to punish the breaching party rather than provide a reasonable estimate of damages
Penalty
What questions are asked to determine enforceability?
At the time the contract was formed, was it apparent that damages would be difficult to estimate in the event of a breach?
Was the amount set as damages a reasonable estimate and not excessive?
(Yes to both = enforced. No to either = unenforced)
To undo, or cancel, a contract
Rescission
An equitable remedy under which a person is restored to his or her original position prior to loss or injury, or placed in the position he or she would have been had the breach not occurred
Restitution
Calls for the performance of the act promised in the contract
Specific Performance
An equitable remedy in which a court orders the parties to perform as promised in the contract
Specific Performance
Normally granted only when the legal remedy is inadequate
Specific Performance
When specific performance is unavailable, what will be awarded instead
Damages
An equitable remedy used when the parties have imperfectly expressed their agreement in writing
Reformation
Courts order reformation most often when this is present
Fraud or Mutual Mistake
When will Reformation be ordered?
Fraud or mutual Mistake
Written contract incorrectly states the parties’ oral agreement
Covenants not to compete are unreasonable
A quasi contract is used to prevent what?
Unjust Enrichment
What are the requirements of Quasi Contract
Party conferred a benefit on the other party
Party conferred the benefit with the reasonable expectation of being paid
Party did not act as a volunteer in conferring the benefit
Party receiving the benefit would be unjustly enriched if allowed to retain the benefit without paying for it
Provisions stating that no damages can be recovered
Exculpatory Clauses
Provisions that affect the availability of certain remedies
Limitation of Liability Clauses
Limitation of Liability Clauses depends on the type of breach that is
Excused by the provision
A provision excluding liability for fraudulent or intentional injury _________ be enforced
Will Not
A clause excluding liability for illegal acts or violations of law _______ be enforced
Will Not
A clause excluding liability for negligence ______ enforced
May be
