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)