Chapter 16. Remedies (344-385)

Question 1

A contracts to build a building for B on B’s land for $100,000. B repudiates the contract before either party has done anything in reliance on it. It would have cost A $90,000 to build the building. What interest, if any, does A have against B?

Answer 1

A has an expectation interest of $10,000, the difference between the $100,000 price and his savings of $90,000 in not having to do the work. Since A has done nothing in reliance, A’s reliance interest is zero. Since A has conferred no benefit on B, A’s restitution interest is zero. Restatement 2d of Contracts § 344(a)

Question 2

A contracts to build a building for B on B’s land for $100,000. B repudiates the contract after A has spent $60,000 of the $90,000 that it would have cost A to build the building. A has been paid nothing and can salvage nothing from the $60,000 that he has spent. What interest, if any, does A have?

Answer 2

A now has an expectation interest of $70,000, the difference between the $100,000 price and his saving of $30,000 in not having to do the work. A also has a reliance interest of $60,000, the amount that he has spent. If the benefit to B of the partly finished building is $40,000, A has a restitution interest of $40,000. Restatement 2d of Contracts § 344(b)

Question 3

A, who is about to produce a play, makes a contract with B, an actor, under which B is to play the lead in the play at a stated salary for the season. A breaks the contract and has the part played by another actor. What interest, if any, does B have against A?

Answer 3

B’s expectation interest includes the extent to which B’s reputation would have been enhanced if he had been allowed to play the lead in A’s play, as well as B’s loss in salary, both subject to the limitations stated in Topic 2 of § 344. Restatement 2d of Contracts § 344(b)

Question 4

A contracts to construct a monument in B’s yard for $10,000 but abandons the work after the foundation has been laid. It will cost B $6,000 to have another contractor complete the work. The monument planned is so ugly that it would decrease the market price of the house. What interest, if any, may B have?

Answer 4

Nevertheless, B’s expectation interest is the value of the monument to him, which, under the rule stated in § 348(2)(b), would be measured by the cost of completion, $6,000. Restatement 2d of Contracts § 344(b)

Question 5

A makes a contract with B under which A is to pay B for drilling an oil well on B’s land, adjacent to that of A, for development and exploration purposes. Both A and B believe that the well will be productive and will substantially enhance the value of A’s land in an amount that they estimate to be $1,000,000. Before A has paid anything, B breaks the contract by refusing to drill the well. Other exploration then proves that there is no oil in the region. What expectation interest, if any, does A have?

Answer 5

A’s expectation interest is zero. Restatement 2d of Contracts § 344(b)

Question 6

A contracts to sell to B 1,000 shares of stock in X Corporation for $10 a share to be delivered on June 1, but breaks the contract by refusing on that date to deliver the stock. B sues A for damages, but at trial it is proved that B could have purchased 1,000 shares of stock in X Corporation on the market on June 1 for $10 a share and therefore has suffered no loss. If B takes action against A, what––if anything––can B recover?

Answer 6

In an action by B against A, B will be awarded nominal damages. Restatement 2d of Contracts § 346(b)

Question 7

As part of a separation agreement B promises his wife A not to change the provision in B’s will for C, their son. A dies and B changes his will to C’s detriment, adding also a provision that C will forfeit any bequest if he questions the change before any tribunal. If A’s representative takes action against B, what––if anything––can he/she recover?

Answer 7

In an action by A’s personal representative against B, the representative can get a judgment for nominal damages. As to the representative’s right to specific performance, see Illustration 2 to § 307. Restatement 2d of Contracts § 346(c)

Question 8

A contracts to publish a novel that B has written. A repudiates the contract and B is unable to get his novel published elsewhere. What––if anything––can B recover?

Answer 8

Subject to the limitations stated in §§ 350-53, B’s damages include the loss of royalties that he would have received had the novel been published together with the value to him of the resulting enhancement of his reputation. But see Illustration 1 to § 352. Restatement 2d of Contracts § 347(b)

Question 9

A, a manufacturer, contracts to sell B, a dealer in used machinery, a used machine that B plans to resell. A repudiates and B is unable to obtain a similar machine elsewhere. What––if anything––can B recover?

Answer 9

Subject to the limitations stated in §§ 350-53, B’s damages include the net profit that he would have made on resale of the machine. Restatement 2d of Contracts § 347(b)

Question 10

A contracts to employ B for $10,000 to supervise the production of A’s crop, but breaks his contract by firing B at the beginning of the season. B reasonably spends $200 in fees attempting to find other suitable employment through appropriate agencies. What––if anything––can B recover?

Answer 10

B can recover the $200 incidental loss in addition to any other loss suffered, whether or not he succeeds in finding other employment. Restatement 2d of Contracts § 347(c)

Question 11

A leases a machine to B for a year, warranting its suitability for B’s purpose. The machine is not suitable for B’s purpose and causes $10,000 in damage to B’s property and $15,000 in personal injuries. What––if anything––can B recover?

Answer 11

B can recover the $25,000 consequential loss in addition to any other loss suffered. See Uniform Commercial Code § 2-715(2)(b). Restatement 2d of Contracts § 347(c)

Question 12

A contracts to build a hotel for B for $500,000 and to have it ready for occupancy by May 1. B’s occupancy of the hotel is delayed for a month because of a breach by A. What––if anything––can B recover?

Answer 12

The cost avoided by B as a result of not having to operate the hotel during May is subtracted from the May rent lost in determining B’s damages. Restatement 2d of Contracts § 347(d)

Question 13

A contracts to build a house for B for $100,000. When it is partly built, B repudiates the contract and A stops work. A would have to spend $60,000 more to finish the house. If A takes action against B, what––if anything––can A recover?

Answer 13

The $60,000 cost avoided by A as a result of not having to finish the house is subtracted from the $100,000 price lost in determining A’s damages. A has a right to $40,000 in damages from B, less any progress payments that he has already received. See Illustration 2 to § 344. Restatement 2d of Contracts § 347(d)

Question 14

A contracts to build a house for B for $100,000. When it is partly built, B repudiates the contract and A stops work. A would have to spend $60,000 more to finish the house. However, A has bought materials that are left over and that he can use for other purposes, saving him $5,000. If A takes action against B, what––if anything––can A recover?

Answer 14

The $5,000 cost avoided is subtracted in determining A’s damages, resulting in damages of only $35,000 rather than $40,000. Restatement 2d of Contracts § 347(d)

Question 15

A contracts to convey land to B in return for B’s working for a year. B repudiates the contract before A has conveyed the land. If A takes action against B, what––if anything––can A recover?

Answer 15

The value to A of the land is subtracted from the value to A of B’s services in determining A’s damages. Restatement 2d of Contracts § 347(d)

Question 16

A contracts to employ B for $10,000 to supervise the production of A’s crop, but breaks his contract by firing B at the beginning of the season. B instead takes another job as a supervisor at $9,500. If A takes action against B, what––if anything––can A recover?

Answer 16

The $9,500 is subtracted from the $10,000 loss of earnings in determining B’s damages. See Illustration 8 to § 350. Restatement 2d of Contracts § 347(d)

Question 17

A contracts to build a machine for B and deliver it to be installed in his factory by June 30. A breaks the contract and does not deliver the machine. B’s factory is destroyed by fire on December 31 and the machine, if it had been installed there, would also have been destroyed. If B takes action against A, what––if anything––can B recover?

Answer 17

The fact that the factory was burned is not considered in determining B’s damages. Restatement 2d of Contracts § 347(d)

Question 18

A contracts to send his daughter to B’s school for $5,000 tuition. After the academic year has begun, A withdraws her and refuses to pay anything. A’s breach does not reduce B’s instructional or other costs and B is unable to find another student to take the place of A’s daughter. If B takes action against A, what––if anything––can B recover?

Answer 18

B has a right to damages equal to the full $5,000. Restatement 2d of Contracts § 347(d)

Question 19

A contracts to build a house for B for $100,000, but repudiates the contract after doing part of the work and having been paid $40,000. Other builders would charge B $80,000 to finish the house, but B finds a builder in need of work who does it for $70,000. If B takes action against A, what––if anything––can B recover?

Answer 19

B’s damages are limited to the $70,000 that he actually had to pay to finish the work less the $60,000 cost avoided or $10,000, together with damages for any loss caused by the delay. See Illustration 2 to § 348. Restatement 2d of Contracts § 347(e)

Question 20

A contracts to employ B for $10,000 to supervise the production of A’s crop. A breaks the contract by firing B at the beginning of the season, and B, unable to find another job, instead takes a job as a farm laborer for the entire season at $6,000. If B takes action against A, what––if anything––can B recover?

Answer 20

The $6,000 that he made as a farm laborer is subtracted from the $10,000 loss of earnings in determining B’s damages. See Illustration 8 to § 350. Restatement 2d of Contracts § 347(e)

Question 21

A contracts to employ B for $10,000 to supervise the production of A’s crop, but breaks his contract by firing B at the beginning of the season. B is unable to find another similar job but receives $3,000 in state unemployment benefits. If B takes action against A, what will determine how much can B recover?

Answer 21

Whether the $3,000 will be subtracted from the $10,000 loss of earnings depends on the state legislation under which it was paid and the policy behind it. Restatement 2d of Contracts § 347(e)

Question 22

On April 1, A and B make a personal service contract under which A is to employ B for six months beginning July 1 and B is to work for A during that period. On May 1, B repudiates the contract. On August 1, B falls ill and is unable to perform the contract for the remainder of the period. If A takes action against B, what––if anything––can A recover?

Answer 22

A can only recover damages based on his loss during the month of July since his loss during subsequent months was not caused by B’s breach. Compare Illustration 2 to § 254. Restatement 2d of Contracts § 347(e)

Question 23

A contracts to pave B’s parking lot for $10,000. B repudiates the contract and A subsequently makes a contract to pave a similar parking lot for $10,000. A’s business could have been expanded to do both jobs. If A takes action against B, what––if anything––can A recover?

Answer 23

Unless it is proved that he would not have undertaken both, A’s damages are based on the net profit he would have made on the contract with B, without regard to the subsequent transaction. Restatement 2d of Contracts § 347(f)

Question 24

A contracts with B to construct an outdoor drive-in theatre, to be completed by June 1. A does not complete the work until September 1. If B takes action against A, what––if anything––can AB recover?

Answer 24

If B cannot prove his lost profits with reasonable certainty, he can recover damages based on the rental value of the theatre property or based on the interest on the value of the theatre property itself if he can prove either of these values with reasonable certainty. See Illustration 2 to § 352. Restatement 2d of Contracts § 348(b)

Question 25

A contracts to build a house for B for $100,000 but repudiates the contract after doing part of the work and having been paid $40,000. Other builders will charge B $80,000 to finish the house. If B takes action against A, what––if anything––can AB recover?

Answer 25

B’s damages include the $80,000 cost to complete the work less the $60,000 cost avoided or $20,000, together with damages for any loss caused by delay. See Illustration 12 to § 347. Restatement 2d of Contracts § 348(c)

Question 26

A contracts to build a house for B for $100,000. When it is completed, the foundations crack, leaving part of the building in a dangerous condition. To make it safe would require tearing down some of the walls and strengthening the foundation at a cost of $30,000 and would increase the market value of the house by $20,000. If B takes action against A, what––if anything––can B recover?

Answer 26

B’s damages include the $30,000 cost to remedy the defects. Restatement 2d of Contracts § 348(c)

Question 27

A contracts to build a house for B for $100,000 according to specifications that include the use of Reading pipe. After completion, B discovers that A has used Cohoes pipe, an equally good brand. To replace the Cohoes pipe with Reading pipe would require tearing down part of the walls at a cost of over $20,000 and would not affect the market price of the house. In an action by B against A, A gives no proof of any special value that Reading pipe would have to him. B’s damages do not include the $20,000 cost to remedy the defects because that cost is clearly disproportionate to the loss in value to B. What––if anything––can B recover?

Answer 27

B can recover only nominal damages. Restatement 2d of Contracts § 348(c)

Question 28

A gives B a “dealer franchise” to sell A’s products in a stated area for one year. In preparation for performance, B spends money on advertising, hiring sales personnel, and acquiring premises that cannot be used for other purposes. A then repudiates before performance begins. If B takes action against A, what––if anything––can B recover?

Answer 28

If neither party proves with reasonable certainty what profit or loss B would have made if the contract had been performed, B can recover as damages his expenditures in preparation for performance. See Illustration 8 to § 90. Restatement 2d of Contracts § 349(a)

Question 29

A contracts with B to stage a series of performances in B’s theater, each to have 50 per cent of the gross receipts. After A has spent $20,000 in getting ready for the performances, B rents the theater to others and repudiates the contract, and A stages the performance at another theater. A’s expenditures in preparation for performance of the contract with B are worth $8,000 to him in connection with staging the performances at the other theater.If A takes action against B, what––if anything––can A recover?

Answer 29

If neither party proves with reasonable certainty what profit or loss A would have made if the contract had been performed, A can recover as damages the $12,000 balance of his expenditures in preparation for performance. Restatement 2d of Contracts § 349(a)

Question 30

A contracts to build for B a factory of experimental design for $1,000,000. After A has spent $250,000 and been paid $150,000 in progress payments, B repudiates the contract and A stops work. A’s expenditures include materials worth $10,000 that he can use on other jobs. If A takes action against B, what––if anything––can A recover?

Answer 30

If neither party proves with reasonable certainty what profit or loss A would have made if the contract had been performed, A can recover as damages the $90,000 balance of his expenditures in preparation for performance. Restatement 2d of Contracts § 349(a)

Question 31

A contracts to sell his retail store to B. After B has spent $100,000 for inventory, A repudiates the contract and B sells the inventory for $60,000. If B takes action against A, what––if anything––can B recover?

Answer 31

If neither party proves with reasonable certainty what profit or loss B would have made if the contract had been performed, B can recover as damages the $40,000 loss that he sustained on the sale of the inventory. Restatement 2d of Contracts § 349(a)

Question 32

A contracts to build a bridge for B for $100,000. B repudiates the contract shortly after A has begun work on the bridge, telling A that he no longer has need for it. Nevertheless, A spends an additional $10,000 in continuing to perform. If A takes action against B, what––if anything––can A recover?

Answer 32

A’s damages for breach of contract do not include the $10,000. Restatement 2d of Contracts § 350(b)

Question 33

A contracts to lease a machine to B and to deliver it at B’s factory. B repudiates the contract, but A nevertheless ships the machine to B, who refuses to receive it. If A takes action against B, what––if anything––can A recover?

Answer 33

A’s damages for breach of contract do not include the cost of shipment of the machine. Restatement 2d of Contracts § 350(b)

Question 34

A sells oil to B in barrels. B discovers that some of the barrels are leaky, in breach of warranty, but does not transfer the oil to good barrels that he has available. If B takes action against A, what––if anything––can B recover?

Answer 34

B’s damages for breach of contract do not include the loss of the oil that could have been saved by transferring the oil to the available barrels. Restatement 2d of Contracts § 350(b)

Question 35

A contracts to sell flour to B. The flour is defective, in breach of warranty, as B discovers after delivery. Nevertheless, B uses it to bake bread to supply his customers. If B takes action against A, what––if anything––can B recover?

Answer 35

B’s damages for breach of contract do not include his loss of business caused by delivering inferior bread made from the flour. Restatement 2d of Contracts § 350(b)

Question 36

A contracts to sell to B a used machine to be delivered at B’s factory by June 1 for $10,000. A breaks the contract by repudiating it on May 1. By appropriate efforts B could buy a similar machine from another seller for $11,000 in time to be delivered at his factory by June 1, but he does not do so and loses a profit of $25,000 that he would have made from use of the machine. If B takes action against A, what––if anything––can B recover?

Answer 36

B’s damages do not include the loss of the $25,000 profit, but he can recover $1,000 from A. See Uniform Commercial Code §§ 2-713(1), 2-715(2)(a). Restatement 2d of Contracts § 350(c)

Question 37

A contracts to supervise the production of B’s crop for $10,000, but breaks his contract and leaves at the beginning of the season. By appropriate efforts, B could obtain an equally good supervisor for $11,000, but he does not do so and the crop is lost. If B takes action against A, what––if anything––can B recover?

Answer 37

B’s damages for A’s breach of contract do not include the loss of his crop, but he can recover $1,000 from A. Restatement 2d of Contracts § 350(c)

Question 38

A contracts to buy from B a used machine from B’s factory for $10,000. A breaks the contract by refusing to receive or pay for the machine. By appropriate efforts, B could sell the machine to another buyer for $9,000, but he does not do so. If B takes action against A, what––if anything––can B recover?

Answer 38

B’s damages for A’s breach of contract do not include the loss of the $10,000 price, but he can recover $1,000 from A. See Uniform Commercial Code § 2-708(1). Restatement 2d of Contracts § 350(c)

Question 39

A contracts to employ B for $10,000 to supervise the production of A’s crop, but breaks his contract by firing B at the beginning of the season. By appropriate efforts, B could obtain an equally good job as a supervisor at $100 less than A had contracted to pay him, but he does not do so and remains unemployed. If B takes action against A, what––if anything––can B recover?

Answer 39

B’s damages for A’s breach of contract do not include his $10,000 loss of earnings, but he can recover $100 from A. See Illustration 9 to § 347. Restatement 2d of Contracts § 350(c)

Question 40

A contracts to buy grain from B for $100,000, which would give B a net profit of $10,000. A breaks the contract by refusing to receive or pay for the grain. If B takes action against A, what––if anything––can B recover?

Answer 40

Even if B would have made the sale to A in addition to other sales, B’s efforts to make other sales do not affect his damages. B’s damages for A’s breach of contract include his $10,000 loss of profit. Restatement 2d of Contracts § 350(d)

Question 41

A contracts to pay B $20,000 for paving A’s parking lot, which would give B a net profit of $3,000. A breaks the contract by repudiating it before B begins work. If B takes action against A, what––if anything––can B recover?

Answer 41

Even if B would have made the contract with A in addition to other contracts, B’s efforts to obtain other contracts do not affect his damages. B’s damages for A’s breach of contract include his $3,000 loss of profit. Restatement 2d of Contracts § 350(d)

Question 42

A contracts to employ B for $10,000 to supervise the production of A’s crop, but breaks his contract by firing B at the beginning of the season. By appropriate efforts, B could only obtain a job as a farm laborer at $6,000, but he does not do so and remains unemployed. If B takes action against A, what––if anything––can B recover?

Answer 42

B’s damages for breach of contract include his $10,000 loss of earnings. Restatement 2d of Contracts § 350(e)

Question 43

A contracts to sell to B a used machine to be delivered at B’s factory by June 1 for $10,000. A breaks the contract by repudiating it on May 1. By appropriate efforts B could buy a similar machine from another seller for $11,000. However, the other seller will not deliver the similar machine to B’s factory, and insists that B take possession of it two weeks earlier than he can install it in his factory, but B can arrange to have it stored for two weeks and shipped to his factory for $1,500. If B takes action against A, what––if anything––can B recover?

Answer 43

B’s damages do not include the loss of the $25,000 profit, but he can recover the $1,500 as well as the $1,000 from A. Restatement 2d of Contracts § 350(e)

Question 44

A contracts to bale hay on B’s farm so that B can use it later to feed his livestock. A does the work so defectively that the hay is worthless. B can buy similar hay in bales in Central City, 100 miles from his farm, for $10,000. The cost to ship the bales between Central City and his farm is $1,000. If B takes action against A, what––if anything––can B recover?

Answer 44

B’s damages include the $10,000 market price and the $1,000 cost of shipment. If B had intended to ship his bales of hay to Central City for sale there, rather than to feed it to his livestock, the $1,000 cost of shipment would be subtracted from the $10,000 market price as cost avoided under § 347(c). Restatement 2d of Contracts § 350(e)

Question 45

A contracts to sell to B a used machine from A’s factory for $10,000. A breaks the contract by refusing to deliver the machine at that price, but offers to sell it to B for $11,000 without prejudice to B’s right to damages. B refuses to buy it at that price and, since he cannot find a similar machine elsewhere, loses a profit of $25,000 that he would have made from use of the machine. If B takes action against A, what––if anything––can B recover?

Answer 45

B’s damages do not include the loss of the $25,000 profit, but he can recover $1,000 from A. Restatement 2d of Contracts § 350(e)

Question 46

A contracts to sell to B a used machine from A’s factory for $10,000. A breaks the contract by refusing to deliver the machine at that price, but offers to sell it to B for $11,000, conditioned on B’s surrendering any claim that he may have against A for breach of contract. If B takes action against A, what––if anything––can B recover?

Answer 46

B’s damages may include the loss of the $25,000 profit. Restatement 2d of Contracts § 350(e)

Question 47

On May 1, A contracts to sell to B a stated quantity of grain for $100,000, delivery and payment to be made on July 1. On July 1, A breaks the contract by refusing to deliver the grain, but B does not buy substitute grain on the market on that date although he could do so for $110,000. On July 10, B buys substitute grain on the market for $120,000. If B takes action against A, what––if anything––can B recover?

Answer 47

B’s damages for A’s breach of contract do not include the $20,000 above the contract price that he paid on July 10, but he can recover $10,000 from A. Restatement 2d of Contracts § 350(f)

Question 48

On May 1, A contracts to sell to B a stated quantity of grain for $100,000, delivery and payment to be made on July 1. A breaks the contract by repudiating it on June 1 and on the same day B tells A that he considers the repudiation final. B does not buy substitute grain on the market on that date although he could do so for $105,000 for delivery and payment on July 1. On July 10, B buys substitute grain on the market for $120,000. If B takes action against A, what––if anything––can B recover?

Answer 48

B’s damages for A’s breach of contract do not include the $20,000 above the contract price that he paid on July 10, but he can recover $5,000 from A. Restatement 2d of Contracts § 350(f)

Question 49

A contracts to build a building for B for $100,000. B repudiates the contract shortly before A has finished work. Because A has duties to subcontractors and will have difficulty in calculating his damages, A spends an additional $10,000 and completes the building. If A takes action against B, what––if anything––can A recover?

Answer 49

If stopping work would not have been reasonable in the circumstances, A can recover the full $100,000, including the $10,000 that he spent after B’s repudiation. Compare Illustration 1 to § 350. Restatement 2d of Contracts § 350(g)

Question 50

A contracts to supervise the production of B’s crop for $10,000, but commits a material breach of the contract by failing to begin on time. By appropriate efforts, B could obtain an equally good supervisor for $1,000 more than he had contracted to pay A, but he does not do so because A assures him that the delay is only temporary. By the time that B discovers that A will be unavailable for the entire season, it is too late to hire another supervisor and the crop is lost. What damages–if any–can B recover?

Answer 50

If B’s delay in hiring another supervisor was reasonable in the circumstances, B’s damages for A’s breach of contract may include the loss of his crop. Restatement 2d of Contracts § 350(g)

Question 51

A, a motion picture company, contracts to have B star in a musical comedy for $100,000. A breaks the contract and engages C, a rival of B, to star in the musical comedy, but offers B an equally good role under an identical contract as a star in another musical comedy for $100,000. Because B would be humiliated to work for A after A hired a rival in B’s place, B refuses to accept the offer. If B takes action against A, what––if anything––can B recover?

Answer 51

If rejection of the offer was reasonable in the circumstances, B can recover the full $100,000. Compare Illustration 8 to § 351. Restatement 2d of Contracts § 350(g)

Question 52

A contracts to sell to B a used machine to be delivered at A’s factory by June 1 for $10,000. A breaks the contract by repudiating it on May 1. B makes a reasonable purchase of a similar machine for $12,000 in time to be delivered at his factory by June 1. It later appears that, unknown to B, a similar machine could have been found for only $11,000. If B takes action against A, what––if anything––can B recover?

Answer 52

Nevertheless, B can recover $2,000 from A. Compare Illustration 5 to § 350. See Uniform Commercial Code § 2-712. Restatement 2d of Contracts § 350(h)

Question 53

A contracts to supervise the production of B’s crop for $10,000, but breaks his contract and leaves at the beginning of the season. B makes a reasonable substitute contract with another supervisor for $12,000 in time to save his crop. It later appears that, unknown to B, a suitable supervisor could have been found for only $11,000. If B takes action against A, what––if anything––can B recover?

Answer 53

Nevertheless, B can recover $2,000 from A. Compare Illustration 6 to § 350. Restatement 2d of Contracts § 350(h)

Question 54

A pays a premium to B, an insurance company, for a policy of fire insurance on his house for a period of five years. B later repudiates the policy and A reasonably gets a similar policy from another insurer for the balance of the period. If A takes action against B, what––if anything––can A recover?

Answer 54

A has a right to damages against B based on the cost of the new policy. Restatement 2d of Contracts § 350(h)

Question 55

A, a carrier, contracts with B, a miller, to carry B’s broken crankshaft to its manufacturer for repair. B tells A when they make the contract that the crankshaft is part of B’s milling machine and that it must be sent at once, but not that the mill is stopped because B has no replacement. Because A delays in carrying the crankshaft, B loses profit during an additional period while the mill is stopped because of the delay. A is not liable for B’s loss of profit. If B takes action against A, what––if anything––can B recover?

Answer 55

That loss was not foreseeable by A as a probable result of the breach at the time the contract was made because A did not know that the broken crankshaft was necessary for the operation of the mill. Restatement 2d of Contracts § 351(a)

Question 56

A contracts to sell land to B and to give B possession on a stated date. Because A delays a short time in giving B possession, B incurs unusual expenses in providing for cattle that he had already purchased to stock the land as a ranch. If B takes action against A, what––if anything––can B recover?

Answer 56

A had no reason to know when they made the contract that B had planned to purchase cattle for this purpose. A is not liable for B’s expenses in providing for the cattle because that loss was not foreseeable by A as a probable result of the breach at the time the contract was made. Restatement 2d of Contracts § 351(a)

Question 57

A and B make a written contract under which A is to recondition by a stated date a used machine owned by B so that it will be suitable for sale by B to C. A knows when they make the contract that B has contracted to sell the machine to C but knows nothing of the terms of B’s contract with C. Because A delays in returning the machine to B, B is unable to sell it to C and loses the profit that he would have made on that sale. If B takes action against A, what––if anything––can B recover?

Answer 57

B’s loss of reasonable profit was foreseeable by A as a probable result of the breach at the time the contract was made. Restatement 2d of Contracts § 351(b)

Question 58

A, a manufacturer of machines, contracts to make B his exclusive selling agent in a specified area for the period of a year. Because A fails to deliver any machines, B loses the profit on contracts that he would have made for their resale. If B takes action against A, what––if anything––can B recover?

Answer 58

B’s loss of reasonable profit was foreseeable by A as a probable result of the breach at the time the contract was made. Restatement 2d of Contracts § 351(b)

Question 59

A and B make a contract under which A is to recondition by a stated date a used machine owned by B so that it will be suitable for use in B’s canning factory. A knows that the machine must be reconditioned by that date if B’s factory is to operate at full capacity during the canning season, but nothing is said of this in the written contract. Because A delays in returning the machine to B, B loses its use for the entire canning season and loses the profit that he would have made had his factory operated at full capacity. If B takes action against A, what––if anything––can B recover?

Answer 59

B’s loss of reasonable profit was foreseeable by A as a probable result of the breach at the time the contract was made. Restatement 2d of Contracts § 351(b)

Question 60

A and B make a written contract under which A is to recondition by a stated date a used machine owned by B so that it will be suitable for sale by B to C. A knows when they make the contract that B has contracted to sell the machine to C but knows nothing of the terms of B’s contract with C. Because A delays in returning the machine to B, B is unable to sell it to C and loses the profit that he would have made on that sale. Furthermore, the profit that B would have made under his contract with A was extraordinarily large because C promised to pay an exceptionally high price as a result of a special need for the machine of which A was unaware. If B takes action against A, what––if anything––can B recover?

Answer 60

A is not liable for B’s loss of profit to the extent that it exceeds what would ordinarily result from such a contract. To that extent the loss was not foreseeable by A as a probable result of the breach at the time the contract was made. Restatement 2d of Contracts § 351(b)

Question 61

A and B make a written contract under which A is to recondition by a stated date a used machine owned by B so that it will be suitable for use by B. Because A delays in returning the machine to B, B is unable to use the machine and loses the profit that he would have made through its use. Furthermore, the profit that B would have made from the use of the machine was unusually large because of an abnormal use to which he planned to put it of which A was unaware. If B takes action against A, what––if anything––can B recover?

Answer 61

A is not liable for B’s loss of profit to the extent that it exceeds what would ordinarily result from the use of such a machine. To that extent the loss was not foreseeable by A at the time the contract was made as a probable result of the breach. Restatement 2d of Contracts § 351(b)

Question 62

A and B make a written contract under which A is to recondition by a stated date a used machine owned by B so that it will be suitable for sale by B to C. A knows when they make the contract that B has contracted to sell the machine to C but knows nothing of the terms of B’s contract with C. Because A delays in returning the machine to B, B not only loses the profit that he would have made on sale of the machine to C, but is held liable for damages in an action brought by C for breach of contract. If B takes action against A, what––if anything––can B recover?

Answer 62

The damages paid to C and B’s reasonable expenses in defending the action were also foreseeable by A as a probable result of the breach at the time he made the contract with B. The result is the same even though they were based on a liquidated damage clause in the contract between B and C if A knew of the clause or if the use of such a clause in the contract between B and C was foreseeable by A at the time he made the contract with B. Restatement 2d of Contracts § 351(c)

Question 63

A and B make a written contract under which A is to recondition by a stated date a used machine owned by B so that it will be suitable for sale by B to C. A knows when they make the contract that B has contracted to sell the machine to C but knows nothing of the terms of B’s contract with C. Because A delays in returning the machine to B, B not only loses the profit that he would have made on sale of the machine to C, but settles with C by paying C a reasonable sum of money to avoid litigation. If B takes action against A, what––if anything––can B recover?

Answer 63

The amount of the settlement paid to C and B’s reasonable expenses in settling were also foreseeable by A at the time he made the contract with B as a probable result of the breach. Restatement 2d of Contracts § 351(c)

Question 64

A contracts to supply B with machinery for unloading cargo. A, in breach of contract, furnishes defective machinery, and C, an employee of B, is injured. C sues B and gets a judgment, which B pays. If B takes action against A, what––if anything––can B recover?

Answer 64

The amount of the judgment and B’s reasonable expenditures in defending the action were foreseeable by A at the time the contract was made as a probable result of the breach. Restatement 2d of Contracts § 351(c)

Question 65

A contracts to procure a right of way for B, for a railroad. Because A, in breach of contract, fails to do this, B has to acquire the right of way by condemnation proceedings. If B takes action against A, what––if anything––can B recover?

Answer 65

B’s reasonable expenditures in those proceedings were foreseeable by A at the time the contract was made as a probable result of the breach. Restatement 2d of Contracts § 351(c)

Question 66

A leases land to B with a covenant for quiet enjoyment. C brings an action of ejectment against B and gets judgment. If B takes action against A, what––if anything––can B recover?

Answer 66

B’s reasonable expenditures in defending the action were foreseeable by A as the probable result of the breach at the time the contract was made. Restatement 2d of Contracts § 351(c)

Question 67

A contracts with B, a farmer, to lease B a machine to be used harvesting B’s crop, delivery to be made on July 30. A knows when he makes the contract that B’s crop will be ready on that date and that B cannot obtain another machine elsewhere. Because A delays delivery until August 10, B’s crop is damaged and he loses profit. If B takes action against A, what––if anything––can B recover?

Answer 67

B’s loss of profit was foreseeable by A at the time the contract was made as a probable result of the breach. Restatement 2d of Contracts § 351(d)

Question 68

A contracts to lend B $100,000 for one year at eight percent interest for the stated purpose of buying a specific lot of goods for resale. B can resell the goods at a $20,000 profit. A delays in making the loan, and although B can borrow money on the market at ten percent interest, he is unable to do so in time and loses the opportunity to buy the goods. If B takes action against A, what––if anything––can B recover?

Answer 68

Unless A had reason to foresee at the time that he made the contract that such a delay in making the loan would probably cause B to lose the opportunity, B can only recover damages based on two percent of the amount of the loan. Restatement 2d of Contracts § 351(e)

Question 69

A contracts to lend $1,000,000 to B for the stated purpose of enabling B to build a building and takes property of B as security. After construction is begun, A refuses to make the loan or release the security. Because B lacks further security, he is unable to complete the building, which becomes a total loss. If B takes action against A, what––if anything––can B recover?

Answer 69

B’s loss incurred in partial construction of the building was foreseeable by A at the time of the contract as a probable result of the breach. Restatement 2d of Contracts § 351(e)

Question 70

A, who holds B’s land as security for a loan, contracts to lend B a sum of money sufficient to pay off other liens on the land at the current rate of interest. A repudiates and informs B in time to obtain money elsewhere on the market, but B is unable to do so. The liens are foreclosed and the land sold at a loss. If B takes action against A, what––if anything––can B recover?

Answer 70

Unless A knew when he made the contract that B would probably be unable to borrow the money elsewhere, B’s loss on the foreclosure sale was not foreseeable as a probable result of A’s breach. Restatement 2d of Contracts § 351(e)

Question 71

A, a private trucker, contracts with B to deliver to B’s factory a machine that has just been repaired and without which B’s factory, as A knows, cannot reopen. Delivery is delayed because A’s truck breaks down. If B takes action against A, what––if anything––can B recover?

Answer 71

In an action by B against A for breach of contract the court may, after taking into consideration such factors as the absence of an elaborate written contract and the extreme disproportion between B’s loss of profits during the delay and the price of the trucker’s services, exclude recovery for loss of profits. Restatement 2d of Contracts § 351(f)

Question 72

A, a retail hardware dealer, contracts to sell B an inexpensive lighting attachment, which, as A knows, B needs in order to use his tractor at night on his farm. A is delayed in obtaining the attachment and, since no substitute is available, B is unable to use the tractor at night during the delay. If B takes action against A, what––if anything––can B recover?

Answer 72

In an action by B against A for breach of contract, the court may, after taking into consideration such factors as the absence of an elaborate written contract and the extreme disproportion between B’s loss of profits during the delay and the price of the attachment, exclude recovery for loss of profits. Restatement 2d of Contracts § 351(f)

Question 73

A, a plastic surgeon, makes a contract with B, a professional entertainer, to perform plastic surgery on her face in order to improve her appearance. The result of the surgery is, however, to disfigure her face and to require a second operation. If B takes action against A, what––if anything––can B recover?

Answer 73

In an action by B against A for breach of contract, the court may limit damages by allowing recovery only for loss incurred by B in reliance on the contract, including the fees paid by B and expenses for hospitalization, nursing care and medicine for both operations, together with any damages for the worsening of B’s appearance if these can be proved with reasonable certainty, but not including any loss resulting from the failure to improve her appearance. Nevertheless, the element of emotional disturbance resulting from the additional operation will be included as loss for which damages may be awarded (see Illustration 4 and Comment a to § 353). Restatement 2d of Contracts § 351(f)

Question 74

A contracts to publish a novel that B has written. A repudiates the contract and B is unable to get his novel published elsewhere. If B takes action against A, what––if anything––can B recover?

Answer 74

If the evidence does not permit B’s loss of royalties and of reputation to be estimated with reasonable certainty, he cannot recover damages for that loss, although he can recover nominal damages. See Illustration 1 to § 347. Restatement 2d of Contracts § 352(a)

Question 75

A contracts to sell B a tract of land on which B plans to build an outdoor drive-in theatre. A breaks the contract by selling the land to C, and B is unable to build the theatre. If B takes action against A, what––if anything––can B recover?

Answer 75

If, because of the speculative nature of the new enterprise the evidence does not permit B’s loss of profits to be estimated with reasonable certainty, his recovery will be limited to expenses incurred in reliance or, if none can be proved with reasonable certainty, to nominal damages. Restatement 2d of Contracts § 352(a)

Question 76

A and B make a contract under which A is to construct a building of radical new design for B for $5,000,000. After A has spent $3,000,000 in reliance, B repudiates the contract and orders A off the site. If A takes action against B, what––if anything––can A recover?

Answer 76

If the evidence does not permit A’s lost profits to be estimated with reasonable certainty, he can recover the $3,000,000 that he has spent in reliance. He must, however, then prove that amount with reasonable certainty. Restatement 2d of Contracts § 352(a)

Question 77

A, a manufacturer, makes a contract with B, a wholesaler, to sell B a quantity of plastic. B resells the plastic to dealers. The plastic is discovered to be defective and B has many complaints from dealers, some of which refuse to place further orders with him. If B takes action against A, what––if anything––can B recover?

Answer 77

B can recover the loss of good will if his loss can be estimated with reasonable certainty by such evidence as his business records before and after the transaction and the testimony of his salespersons and that of dealers. Restatement 2d of Contracts § 352(a)

Question 78

A contracts with B to remodel B’s existing outdoor drive-in theatre, work to be completed on June 1. A does not complete the work until September 1. If B takes action against A, what––if anything––can B use to prove his lost profits?

Answer 78

B can use records of the theatre’s prior and subsequent operation, along with other evidence, to prove his lost profits with reasonable certainty. Restatement 2d of Contracts § 352(b)

Question 79

A contracts with B to construct a new outdoor drive-in theatre, to be completed on June 1. A does not complete the theatre until September 1. If B takes action against A, what––if anything––can B use to prove his lost profits?

Answer 79

Even though the business is a new rather than an established one, B may be able to prove his lost profits with reasonable certainty. B can use records of the theatre’s subsequent operation and of the operation of similar theatres in the same locality, along with other evidence including market surveys and expert testimony, in attempting to do this. Restatement 2d of Contracts § 352(b)

Question 80

A contracts with B to make B his exclusive agent for the sale of machine tools in a specified territory and to supply him with machine tools at stated prices. After B has begun to act as A’s agent, A repudiates the agreement and replaces him with C. If B takes action against A, what––if anything––can B use to prove his lost profits?

Answer 80

B can use evidence as to sales and profits made by him before the repudiation and made by C after the repudiation in attempting to prove his lost profits with reasonable certainty. It would be more difficult, although not necessarily impossible, for B to succeed in this attempt if his agency were not exclusive. Restatement 2d of Contracts § 352(b)

Question 81

A, a steel manufacturer, and B, a dealer in scrap steel, contract for the sale by A to B of all of A’s output of scrap steel for five years at a price fixed in terms of the market price. B’s profit will depend largely on the amount of A’s output and the cost of transporting the scrap to B’s purchasers. A repudiates the contract at the end of one year. If B takes action against A, what––if anything––can B recover?

Answer 81

Whether B can recover damages based on lost profits over the remaining four years will depend on whether he can prove A’s output and the transportation costs with reasonable certainty. If he can do so for part of the remaining four years, he can recover damages based on lost profits for that period. The availability of the remedy of specific performance is a factor that will influence a court in requiring greater certainty. Restatement 2d of Contracts § 352(c)

Question 82

A contracts to construct a house for B. A knows when the contract is made that B is in delicate health and that proper completion of the work is of great importance to him. Because of delays and departures from specifications, B suffers nervousness and emotional distress. If B takes action against A, can B include emotional disturbance in the estimation of damages?

Answer 82

In an action by B against A for breach of contract, the element of emotional disturbance will not be included as loss for which damages may be awarded. Restatement 2d of Contracts § 353(a)

Question 83

A, a hotel keeper, wrongfully ejects B, a guest, in breach of contract. In doing so, A uses foul language and accuses B of immorality, but commits no assault. If B takes action against A, can B include emotional disturbance in the estimation of damages?

Answer 83

In an action by B against A for breach of contract, the element of B’s emotional disturbance will be included as loss for which damages may be awarded. Restatement 2d of Contracts § 353(a)

Question 84

A makes a contract with B to conduct the funeral for B’s husband and to provide a suitable casket and vault for his burial. Shortly thereafter, B discovers that, because A knowingly failed to provide a vault with a suitable lock, water has entered it and reinterment is necessary. B suffers shock, anguish and illness as a result. If B takes action against A, can B include emotional disturbance in the estimation of damages?

Answer 84

In an action by B against A for breach of contract, the element of emotional disturbance will be included as loss for which damages may be awarded. Restatement 2d of Contracts § 353(a)

Question 85

A lends B $10,000 to be repaid in 30 days without interest. B fails to pay the debt. If A takes action against B, what––if anything––can A recover?

Answer 85

A can recover $10,000, and is also entitled to simple interest on the $10,000 at the legal rate from the date of maturity. Restatement 2d of Contracts § 354(c)

Question 86

A contracts to sell B goods for $10,000 on 30 days credit, nothing being said as to interest. A delivers the goods but B fails to pay for them at the end of 30 days. If A takes action against B, what––if anything––can A recover?

Answer 86

A can recover $10,000, and is also entitled to simple interest on the $10,000 at the legal rate from the expiration of the credit period. Restatement 2d of Contracts § 354(c)

Question 87

A contracts to sell B all the berries to be grown on A’s farm during one year for $5 a quart. A delivers 2,000 quarts. No part of the price is paid. B wrongly claims that only 1,000 quarts were delivered and that they were all paid for when received. If A takes action against B, what––if anything––can A recover?

Answer 87

A can recover $10,000, and is also entitled to simple interest on the $10,000 at the legal rate from the date when payment was due. Restatement 2d of Contracts § 354(c)

Question 88

A contracts to sell machinery to B for $10,000, the price to be paid by B in wheat at the market price on July 1. A delivers the machinery but B fails to deliver the wheat. If A takes action against B, what––if anything––can A recover?

Answer 88

A can recover $10,000, and is also entitled to simple interest on the $10,000 at the legal rate from July 1. The result would be the same if the price were not expressed in dollars but in terms of 1,000 bushels of wheat to be delivered on July 1 and the market price on that day was $10 a bushel. Restatement 2d of Contracts § 354(c)

Question 89

On February 1 A makes a contract to sell a ship to B for $10,000,000, payment and delivery to be October 1. On September 1, B repudiates the contract and A promptly makes a reasonable contract to resell the ship for $8,000,000, payment and delivery to take place on October 1. If A takes action against B, what––if anything––can A recover?

Answer 89

A can recover $2,000,000, and is also entitled to simple interest on the $2,000,000 at the legal rate from October 1. Restatement 2d of Contracts § 354(c)

Question 90

A contracts to cut and deliver to B 1 million feet of lumber from trees on B’s land. Delivery is to be by June 1 and the price is $100 per thousand feet payable on delivery. After A has spent $30,000 in cutting the timber, but before he has delivered any of it, B repudiates the contract. As a result of his expenditure, A has $1,000 worth of materials left over that he can use on other contracts. It would have cost A an additional $60,000 to cut and deliver all of the timber. If A takes action against B, what––if anything––can A recover?

Answer 90

A can recover $39,000 (See § 347), and is entitled to simple interest on the $39,000 at the legal rate from June 1. Restatement 2d of Contracts § 354(c)

Question 91

A contracts to work for B at a weekly salary of $2,000. B wrongfully discharges A ten weeks before the contract ends and refuses to pay A anything for the four weeks preceding the discharge. By reasonable efforts, A can find similar work paying $1,500 a week for the last ten weeks. If A takes action against B, what––if anything––can A recover?

Answer 91

A can recover $2,000 for each of the first four weeks and $500 for each of the last ten, or $13,000. A is entitled to simple interest on each installment at the legal rate from the date that it was payable. Restatement 2d of Contracts § 354(c)

Question 92

A sells seed to B, warranting that it is Bristol cabbage seed. It is an inferior type of cabbage seed instead, and B suffers a loss of profit. If B takes action against A, what––if anything––can A recover?

Answer 92

B can recover $10,000, the difference between the value to B of a crop of Bristol cabbage and the crop actually grown. That amount was not, however, sufficiently definite to give B a right to interest on it. The allowance of interest is in the discretion of the court. Restatement 2d of Contracts § 354(d)

Question 93

A contracts to build a bungalow for B for $30,000. After completion but before B has paid the final $6,000, B occupies the bungalow but refuses to pay the balance because the workmanship and materials are unsatisfactory. If A takes action against B, what––if anything––can A recover?

Answer 93

A can recover only $4,000 on the ground that B’s claim entitles him to compensation in the amount of $2,000. The sum of $4,000 was not sufficiently definite to give A a right to interest on it. The allowance of interest is within the discretion of the court. The fact that A was himself in breach will be considered. Restatement 2d of Contracts § 354(d)

Question 94

A is employed as a school teacher by B. In breach of contract and without notice B discharges A by excluding him from the school building and by stating in the presence of the pupils that he is discharged. If A takes action against B, what––if anything––can A recover?

Answer 94

Regardless of B’s motive in discharging A, A cannot recover punitive damages from B. A can recover compensatory damages under the rule stated in § 347, including any damages for emotional disturbance that are allowable under the rule stated in § 353. Restatement 2d of Contracts § 355(a)

Question 95

A and B, who are neighbors, make a contract under which A promises to supply water to B from A’s well for ten years in return for B’s promise to make monthly payments and share the cost of repairs. After several years, the relationship between A and B deteriorates and A, in breach of contract and to spite B, shuts off the water periodically. If B takes action against A, what––if anything––can B recover?

Answer 95

B cannot recover punitive damages from A. B can recover compensation damages under the rule stated in § 347 if he can prove them with reasonable certainty (§ 352), and the court may take into account the willfulness of A’s breach in applying that requirement. See Comment a to § 352. Restatement 2d of Contracts § 355(a)

Question 96

A, a telephone company, contracts with B to render uninterrupted service. A, tortiously as well as in breach of contract, fails to maintain service at night and B is unable to telephone a doctor for his sick child. If B takes action against A, what would govern how much can B recover?

Answer 96

B’s right to recover punitive damages is governed by Restatement, Second, Torts § 908. Restatement 2d of Contracts § 355(b)

Question 97

A borrows money from B, pledging jewelry as security for the loan. B, tortiously as well as in breach of contract, sells the jewelry to a good faith purchaser for value. What will govern A’s rights for cover punitive damages?

Answer 97

A’s right to recover punitive damages is governed by Restatement, Second, Torts § 908. Restatement 2d of Contracts § 355(b)

Question 98

A and B sign a written contract under which A is to act in a play produced by B for a ten week season for $4,000. A term provides that “if either party shall fail to perform as agreed in any respect he will pay $10,000 as liquidated damages and not as a penalty.” A leaves the play before the last week to take another job. The play is sold out for that week and A is replaced by a suitable understudy. Are the quoted terms of the contract enforceable?

Answer 98

The amount fixed is unreasonable in the light of both the anticipated and the actual loss and, in spite of the use of the words “liquidated damages,” the term provides for a penalty and is unenforceable on grounds of public policy. The rest of the agreement is enforceable (§ 184(1)), and B’s remedies for A’s breach are governed by the rules stated in §§ 344–385. Restatement 2d of Contracts § 356(b)

Question 99

A, B and C form a partnership to practice veterinary medicine in a town for ten years. In the partnership agreement, each promises that if, on the termination of the partnership, the practice is continued by the other two members, he will not practice veterinary medicine in the same town during its continuance up to a maximum of three years. A term provides that for breach of this duty “he shall forfeit $50,000 to be collected by the others as damages. ” A leaves the partnership, and the practice is continued by B and C. A immediately begins to practice veterinary medicine in the same town. Are the quoted terms of the contract enforceable?

Answer 99

The loss actually caused to B and C is difficult of proof and $50,000 is not an unreasonable estimate of it. Even though $50,000 may be unreasonable in relation to the loss that might have resulted in other circumstances, it is not unreasonable in relation to the actual loss. Therefore, the term does not provide for a penalty and its enforcement is not precluded on grounds of public policy. See Illustration 14 to § 188. Restatement 2d of Contracts § 356(b)

Question 100

A contracts to build a grandstand for B’s race track for $1,000,000 by a specified date and to pay $1,000 a day for every day’s delay in completing it. A delays completion for ten days. Are the terms of the contract enforceable?

Answer 100

If $1,000 is not unreasonable in the light of the anticipated loss and the actual loss to B is difficult to prove, A’s promise is not a term providing for a penalty and its enforcement is not precluded on grounds of public policy. Restatement 2d of Contracts § 356(b)

Question 101

A contracts to build a grandstand for B’s race track for $1,000,000 by a specified date and to pay $1,000 a day for every day’s delay in completing it. A delays completion for ten days. However, B is delayed for a month in obtaining permission to operate his race track so that it is certain that A’s delay of ten days caused him no loss at all. Are the terms of the contract enforceable?

Answer 101

Since the actual loss to B is not difficult to prove, A’s promise is a term providing for a penalty and is unenforceable on grounds of public policy. Restatement 2d of Contracts § 356(b)

Question 102

A contracts to build a house for B for $50,000 by a specified date or in the alternative to pay B $1,000 a week during any period of delay. A delays completion for ten days. Are the terms of the contract enforceable?

Answer 102

If $1,000 a week is unreasonable in the light of both the anticipated and actual loss, A’s promise to pay $1,000 a week is, in spite of its form, a term providing for a penalty and is unenforceable on grounds of public policy. Restatement 2d of Contracts § 356(c)

Question 103

A executes a bond obligating himself to pay B $10,000, on condition that the bond shall be void, however, if C, who is B’s cashier, shall properly account for all money entrusted to him. C defaults to the extent of $500. Is A’s promise enforceable?

Answer 103

A’s promise is unenforceable on grounds of public policy to the extent that it exceeds the actual loss, $500. Restatement 2d of Contracts § 356(e)

Question 104

A contracts with B to give B the “first refusal” of A’s house on stated terms. A later offers to sell the house to others without first offering it to B and B sues A to enjoin him from doing this. May an injunction be properly granted?

Answer 104

An injunction may properly be granted. Restatement 2d of Contracts § 357(b)

Question 105

A, B and C form a partnership to practice veterinary medicine in a town for ten years. In the partnership agreement each makes an enforceable promise that if, on the termination of the partnership, the practice is continued by the other two members, he will not practice veterinary medicine in the same town during its continuance up to a maximum of three years. See Illustration 11 to § 188. A leaves the partnership and the practice is continued by B and C. A immediately threatens to begin the practice of veterinary medicine in the same town, and B and C sue to enjoin A from doing so. May an injunction be properly granted?

Answer 105

An injunction may properly be granted. Restatement 2d of Contracts § 357(b)

Question 106

A, the owner of a large factory, contracts to take all of his requirements of electricity from B, who promises to build a new electric plant at a place where it would not otherwise be profitable. A repudiates the contract and B sues A to enjoin him from using electricity that is not supplied by B. May an injunction be properly granted?

Answer 106

An injunction may properly be granted. Restatement 2d of Contracts § 357(b)

Question 107

A makes a contract with B under which A promises to sell exclusively B’s dress patterns in A’s stores for a period of five years. The contract provides details as to manner of exhibition and division of profits. On anticipatory repudiation of the contract by A, B sues A for specific performance of his duty to sell B’s patterns and to enjoin him from selling competing dress patterns. May an injunction be properly granted?

Answer 107

Even if the court refuses specific performance on the ground that enforcement and supervision would be too difficult (§ 366), it may properly grant an injunction. Restatement 2d of Contracts § 357(b)

Question 108

A, a fruit growers’ cooperative, contracts to sell to B, a fruit processor, 1,000 tons of loganberries a year for five years. In reliance on the contract, B substantially expands his plant and engages in an extensive advertising campaign. A then repudiates the contract. The loss to B is difficult to estimate but will probably exceed $500,000. A’s entire assets do not exceed $100,000. B sues A for specific performance and to enjoin A from selling loganberries to anyone other than B. May an injunction be properly granted?

Answer 108

Even if the court refuses specific performance on the ground that enforcement and supervision would be too difficult (§ 366), it may properly grant an injunction. Restatement 2d of Contracts § 357(b)

Question 109

A, a water company, contracts with B, a city, to construct a water supply system and to supply sufficient water for public and private use, including any increase in demand. In return B gives A the exclusive right to supply water at rates fixed according to a schedule. A constructs the system substantially as agreed with the exception of a few defects, which can be corrected. B repudiates and A sues B for specific performance. May specific performance be properly granted?

Answer 109

Specific performance may properly be granted, conditional on correction of the defects. See § 369. If changing circumstances require it, the order may also be conditional on A’s consent to modification of the terms of the contract, if this should become necessary to avoid unreasonable hardship to B. Restatement 2d of Contracts § 358(a)

Question 110

A contracts to sell land to B, who promises to pay the price in eight installments on stated dates. Conveyance is to be made on payment of the third installment, and the balance is to be secured by a mortgage and paid with interest in five annual installments. After B has paid the third installment, A delays and finally refuses to convey, and B sues for specific performance. May specific performance be properly granted?

Answer 110

Specific performance may properly be granted. The order will be conditional on execution of the mortgage for the balance and may provide for equitable adjustment of rents and profits, interest on the unpaid part of the price, and extension of the times fixed for the last five payments to allow for time lost by A’s delay. Restatement 2d of Contracts § 358(a)

Question 111

A contracts to sell B a tract of land warranted to contain 200 acres for $100,000. The tract contains only 160 acres, substantially uniform in value. A refuses to perform and B sues for specific performance. Will specific performance be granted?

Answer 111

Specific performance will be granted with an abatement of $20,000, conditional on B paying $80,000. See Illustration 1 to § 369. If the price had already been paid in full, the decree would order the restitution of $20,000. Restatement 2d of Contracts § 358(c)

Question 112

A contracts to transfer land to B and to make specified repairs and complete an unfinished building on the land. A repudiates and B sues for specific performance. May specific performance be properly granted?

Answer 112

Specific performance of A’s duty to transfer the land may be granted with an abatement in the price or other compensation sufficient to enable him to make the repairs and complete the building himself. Restatement 2d of Contracts § 358(c)

Question 113

A contracts to sell his business, including land, buildings and stock in trade, to B. A repudiates the contract and B sues for specific performance. May specific performance be properly granted?

Answer 113

Specific performance of the entire contract may be granted, even though the stock in trade is of a kind that could be purchased elsewhere. However, in that case it is also within the court’s discretion to require A to convey the land and buildings and to pay damages for failure to deliver the stock in trade. Restatement 2d of Contracts § 359(b)

Question 114

A contracts to sell to B a painting by Rembrandt for $1,000,000. A repudiates the contract and B sues for specific performance. Will specific performance be properly granted?

Answer 114

Specific performance will be granted. Restatement 2d of Contracts § 360(b)

Question 115

A contracts to sell to B the racing sloop “Columbia,” this sloop being one of a class of similar boats manufactured by a particular builder. Although other boats of this class are easily obtainable, their racing characteristics differ considerably and B has selected the “Columbia” because she is regarded as a witch in light airs and, therefore, superior to most of the others. A repudiates the contract and B sues for specific performance. May specific performance be properly granted?

Answer 115

Specific performance may properly be granted. Restatement 2d of Contracts § 360(b)

Question 116

A contracts to sell to B his interest as holder of a franchise to operate a hamburger stand. Because A has not yet opened his stand for business, it would be difficult to prove his expected profits with reasonable certainty. A repudiates the contract and B sues for specific performance. May specific performance be properly granted?

Answer 116

Specific performance may properly be granted. Restatement 2d of Contracts § 360(b)

Question 117

A, a manufacturer of steel, contracts to sell B all of its output of steel scrap for a period of five years. After one year, A repudiates the contract and B sues A for specific performance. The uncertainty in A’s output over the remaining four years would make it very difficult for B to prove damages. May specific performance be properly granted?

Answer 117

Specific performance may properly be granted. Restatement 2d of Contracts § 360(b)

Question 118

A contracts to supply B with water for irrigation. In reliance on his contract, B sows his land with rice. A repudiates the contract although he has water that he can supply and B sues for specific performance. The loss that B will suffer as a result of A’s failure to supply water is difficult of estimation. May specific performance be properly granted?

Answer 118

Specific performance may properly be granted. Restatement 2d of Contracts § 360(b)

Question 119

A contracts to sell B 10,000 bales of cotton. A repudiates the contract on the day for delivery. B can buy cotton on the market at a somewhat higher price. Could specific performance be granted to B?

Answer 119

B will not be granted specific performance. Restatement 2d of Contracts § 360(c)

Question 120

A contracts to sell to B 1,000 shares of stock in the X Corporation for $10,000. A repudiates the contract and B sues for specific performance. Other shares of X Corporation are not readily obtainable and B will suffer an uncertain loss as a result of diminished voting power. May specific performance be properly granted?

Answer 120

Specific performance may properly be granted. If other shares were readily obtainable, even though at a considerably higher price, specific performance would be refused. Restatement 2d of Contracts § 360(c)

Question 121

A contracts to obtain a patent for his invention and to assign a half interest in it to B, who promises to pay A’s expenses and $100,000. A repudiates the contract and threatens to assign the patent when it is issued to others. B sues A for specific performance. May specific performance be properly granted?

Answer 121

Specific performance may properly be granted. The decree may enjoin A from assigning the patent to others and order him to proceed with the application and, on its issuance to execute an assignment to B, all conditional on appropriate payment by B. Restatement 2d of Contracts § 360(c)

Question 122

A contracts to sell his stock of goods together with good will to B for $100,000, a fair price, payable on delivery. Before the time for performance, A becomes insolvent and repudiates the contract. B sues A for specific performance. May specific performance be properly granted?

Answer 122

A’s insolvency is a factor tending to show that damages are inadequate. But see Illustration 4 to § 365. Restatement 2d of Contracts § 360(d)

Question 123

A owns an interest in a shop, the title to which is held by B in trust for A and others. B is insolvent. A assigns his interest to C and B contracts with C to effectuate the transfer of that interest to C and to terminate his own power. B then refuses to do so and C sues B for specific performance. May specific performance be properly granted?

Answer 123

B’s insolvency is a factor tending to show that damages are inadequate. Restatement 2d of Contracts § 360(d)

Question 124

On February 1, A contracts to sell his farm to B for $500,000, of which $100,000 is paid when the contract is signed and $400,000 is to be paid on A’s delivery of a deed on August 1. On March 1, A repudiates the contract. B sues A for specific performance. Will specific performance be granted?

Answer 124

Specific performance will be granted immediately, A’s performance not to take place until August 1 and to be conditional on the simultaneous payment by B of the $400,000 balance when the deed is tendered at that time. A may also be enjoined from making a conveyance to anyone else. Restatement 2d of Contracts § 360(e)

Question 125

On February 1, A contracts to sell his farm to B for $500,000, of which $100,000 is paid when the contract is signed and $400,000 is to be paid on A’s delivery of a deed on August 1. On March 1, B repudiates the contract. A sues B for specific performance. Will specific performance be granted?

Answer 125

Specific performance will be granted immediately, B’s performance not to take place until August 1 and to be conditional on the simultaneous tender by A of the deed when the $400,000 balance is tendered at that time. Restatement 2d of Contracts § 360(e)

Question 126

A contracts to sell land to B, a dealer in land, who contracts to sell it to C. C plans to build a home on the land and would be granted specific performance against B if B refused to convey the land to him. A repudiates the contract and refuses to convey the land to B and B sues A for specific performance. Will specific performance be granted?

Answer 126

Specific performance will be granted. Restatement 2d of Contracts § 360(e)

Question 127

A, B and C form a partnership to practice veterinary medicine in a town for ten years. In the partnership agreement each makes an enforceable promise that if, on the termination of the partnership, the practice is continued by the other two members, he will not practice veterinary medicine in the same town during its continuance up to a maximum of three years. See Illustration 11 to § 188 and Illustration 2 to § 357. Each also makes an enforceable promise that for breach of this duty he will pay $50,000 as liquidated damages. See Illustration 2 to § 356. A leaves the partnership, and the practice is continued by B and C. A immediately begins to practice veterinary medicine in the same town. B and C sue A for an injunction and damages. Will an injunction be granted? What damages, if anything, are B and C entitled to?

Answer 127

In spite of the liquidated damage clause, A will be enjoined from practicing veterinary medicine in violation of his promise not to compete. B and C may not then recover damages under the liquidated damage clause but may recover damages for any actual loss caused by A’s breach, but not more than $50,000. Restatement 2d of Contracts § 361(a)

Question 128

A sells his grocery business to B for $200,000, of which $100,000 is payable immediately and $100,000 at the end of a year. Under the agreement A makes an enforceable promise not to engage in a business of the same kind within a hundred miles for three years unless he reduces the balance from $100,000 to $50,000. See Illustration 1 to § 188. Before the end of the year, A writes B that the balance is reduced to $50,000 and immediately opens a competing business. Will an injunction be granted?

Answer 128

A will not be enjoined from operating the competing business. Restatement 2d of Contracts § 361(b)

Question 129

A and B make a contract under which A promises to convey part of a tract of land to B and B promises to pay $100,000 and to build “a first class theatre” on it. Building the theatre will enhance the value of A’s remaining land. A conveys the land to B, who pays the price but refuses to build the theatre. A sues B for specific performance. May specific performance be properly granted?

Answer 129

Specific performance will be refused because of the uncertainty of the terms of the contract, although A can receive damages from B based on the failure to enhance the value of his land if he can prove them with reasonable certainty (§ 352). See also § 366 on the effect of difficulty in supervision. Restatement 2d of Contracts § 362(b)

Question 130

A leases land to B for three years, with an option to buy for $100,000 on terms of payment to be agreed upon. B occupies the land, making substantial repairs and improvements, and then accepts the option, tendering $100,000 in cash. A repudiates and B sues A for specific performance. May specific performance be properly granted?

Answer 130

Specific performance will not be refused on the ground of uncertainty. Although the terms of payment are uncertain and the parties may have contemplated a period of credit, refusal of specific performance would result in a forfeiture because B has made improvements and the payment tendered is on terms sufficiently favorable to A. See Illustration 2 to § 33. Restatement 2d of Contracts § 362(b)

Question 131

A contracts to lease an apartment, with heat and light, to B as soon as the apartment building is completed. After the building is completed, A refuses to install sufficient equipment for heat and light. B sues A for specific performance. May specific performance be properly granted?

Answer 131

Specific performance will not be refused on the ground of uncertainty. Restatement 2d of Contracts § 362(b)

Question 132

A contracts to sell land to B, part of the purchase price to be paid in installments after the time fixed for the conveyance of the land. A refuses to convey the land and B sues for specific performance. May specific performance be properly granted?

Answer 132

Specific performance may properly be granted, conditional on B executing a mortgage or giving other satisfactory security that the payments will be made. This is so even though the contract provides for no security. Restatement 2d of Contracts § 363(b)

Question 133

A contracts to transfer land to B immediately in return for B’s promise to render personal services to A for ten years. A dispute between them causes unfriendly relations, A refuses to convey the land, and B sues for specific performance. May specific performance be properly granted?

Answer 133

Specific performance will be refused because of the increased risk that B’s services will not be rendered and because sufficient security that they will be rendered is lacking. Restatement 2d of Contracts § 363(b)

Question 134

A contracts to transfer land to B on performance by B of his promise to render personal services to A for ten years. After B has performed for six years, A repudiates the contract and B, who is able and willing to finish performance, sues for specific performance. May specific performance be properly granted?

Answer 134

A may properly be enjoined from conveying the land to anyone else and ordered to convey it to B upon full performance by B. But see § 367(2). Restatement 2d of Contracts § 363(b)

Question 135

A contracts to transfer land to B for $100,000. B promises to pay $20,000 in cash on conveyance, to pay the balance in four annual installments secured by a mortgage and, immediately on conveyance, to improve the land by building a suitable brick residence. The contract provides that if B does not build the residence, title to the land will revert to A. A refuses to convey and B sues for specific performance. May specific performance be properly granted?

Answer 135

Specific performance may properly be granted. Even though B’s promise to build the residence may not be specifically enforceable, the provision for reversion of title affords A sufficient security. The order may be made defeasible if B does not build the residence. Restatement 2d of Contracts § 363(b)

Question 136

A, a fruit growers cooperative association, organized to improve economic conditions in the industry, contracts with its members to market their fruit, each member promising to deal exclusively with the association. B, one of the members, threatens to deal with others, imperiling the association’s success. There is no indication that A will fail to market B’s fruit as agreed. A sues to enjoin B from dealing with others. May an injunction be properly granted?

Answer 136

The injunction may properly be granted without requiring additional security. Restatement 2d of Contracts § 363(b)

Question 137

A contracts to sell a tract of land to B for $100,000. The contract when made is unenforceable against B because the only memorandum of the contract is signed by A but not B. A repudiates the contract and B sues for specific performance. May specific performance be properly granted?

Answer 137

Specific performance may properly be granted because the commencement of the action by B makes the contract enforceable against him. Restatement 2d of Contracts § 363(c)

Question 138

A contracts to sell a tract of land to B for $100,000. A is unable to convey the agreed title because C owns a part interest in the tract. A repudiates the contract and B sues for specific performance. May specific performance be properly granted?

Answer 138

Specific performance as to A’s interest may properly be granted even though A could not have obtained such a decree against B because of his own breach. See § 369. Restatement 2d of Contracts § 363(c)

Question 139

A is an aged, illiterate farmer, inexperienced in business. B is an experienced speculator in real estate who knows that a developer wants to acquire a tract of land owned by A and will probably pay a price considerably above the previous market price. B takes advantage of A’s ignorance of this fact and of his general inexperience and persuades A not to seek advice. He induces A to contract to sell the land at the previous market price, which is considerably less than the developer later agrees to pay B. A refuses to perform, and B sues A for specific performance. May specific performance be properly granted?

Answer 139

Specific performance may properly be refused on the ground of unfairness. Restatement 2d of Contracts § 364(a)

Question 140

A and B make a contract under which A is to sell B a tract of land for $100,000. B does not tell A that he intends to combine the tract with others as part of a large development in order to prevent A from asking a higher price. $100,000 is a fair price for the tract at existing market prices. A refuses to perform and B sues A for specific performance. May specific performance be properly granted?

Answer 140

Specific performance will not be refused on the ground of unfairness. Cf. Illustration 2 to § 171. Restatement 2d of Contracts § 364(a)

Question 141

A writes B offering to sell for $100,000 a tract of land that A owns known as “201 Lincoln Street.” B, who mistakenly believes that this description contains an additional tract of land worth $30,000, accepts A’s offer. On discovery of his mistake, B refuses to perform and A sues for specific performance. May specific performance be properly granted?

Answer 141

Even if the court determines that enforcement of the contract would not be unconscionable under the rule stated in § 153, specific performance may properly be refused on the ground of unfairness. Cf. Illustration 5 to § 153. Restatement 2d of Contracts § 364(a)

Question 142

A, a milkman, and B, a dairy farmer make a contract under which B is to sell and A to buy all of A’s requirements of milk, but not less than 200 quarts a day, for one year. B may deliver milk from any source but expects to deliver milk from his own herd. B’s herd is destroyed because of hoof and mouth disease and he fails to deliver any milk. A sues B for specific performance. May specific performance be properly granted?

Answer 142

Even though B’s duty to deliver milk is not discharged and B is liable to A for breach of contract, specific performance may properly be refused on the ground of unfairness. Cf. Illustration 12 to § 261. Restatement 2d of Contracts § 364(a)

Question 143

A, an individual, contracts in June to sell at a fixed price per ton to B, a large soup manufacturer, carrots to be grown on A’s farm. The contract, written on B’s standard printed form, is obviously drawn to protect B’s interests and not A’s. It contains numerous provisions to protect B against various contingencies and none giving analogous protection to A. Each of the clauses can be read restrictively so that it is not unconscionable, but several can be read literally to give unrestricted discretion to B. In January, when the market price has risen above the contract price, A repudiates the contract, and B seeks specific performance. May specific performance be properly granted?

Answer 143

In the absence of justification by evidence of commercial setting, purpose or effect, the court may determine that the contract as a whole was unconscionable when made and may properly deny specific performance on the ground of unfairness regardless of whether it would award B damages for breach. Restatement 2d of Contracts § 364(b)

Question 144

A, a childless widow in her seventies suffering from Parkinson’s disease, contracts with B, her niece, to leave B her farm in her will in return for B’s promise to care for A for the rest of her life. B immediately resigns her job and begins to care for A, but deterioration of A’s condition requires her to go to the hospital within a week and she dies without changing her will. B sues A’s estate for specific performance. May specific performance be properly granted?

Answer 144

If the court concludes that the contract was fair when made, in view of the burden of caring for A in her condition and the risk that she might live for a considerable time, it will order specific performance. Restatement 2d of Contracts § 364(b)

Question 145

A contracts to sell land to B for $100,000, payable in five annual $20,000 installments with conveyance to be at the time of the last payment. The contract contains a term providing that “time is of the essence with respect to each installment, and B shall lose all his rights under the contract if he fails to pay any installment when due.” See Comment d to § 242. B pays the first installment and takes possession, making improvements and paying the next two installments on time. When he tenders the fourth payment one month late, A refuses it and brings an action of ejectment. B sues for specific performance. May specific performance be properly granted?

Answer 145

The court may refuse to enforce the quoted term on the ground of unfairness. Specific performance may then properly be granted conditional on payment into court of the fourth installment with interest from maturity and on payment of the last installment on conveyance. Restatement 2d of Contracts § 364(c)

Question 146

A is induced to make a contract to sell land to B, to be paid for out of funds of C that B holds as trustee, by B’s false representation that such use of C’s money is within B’s authority as trustee. A sues B for specific performance. May specific performance be properly granted?

Answer 146

Specific performance will be refused on grounds of public policy, since the act that would be ordered would involve a breach of trust, even though B will be held liable in damage for breach of contract. Restatement 2d of Contracts § 365(a)

Question 147

A contracts to give B, a railroad company, a right of way in return for B’s promise to locate a station and stop its express trains at a designated place. It later turns out that that place is an inconvenient one for the public and that the disadvantage to B as well as the public of B’s promise is performed will be disproportionate to any advantage to A. B refuses to locate the station as promised, and A sues B for specific performance. May specific performance be properly granted?

Answer 147

Specific performance will be refused on grounds of public policy, even though B will be held liable in damages for breach of contract. Restatement 2d of Contracts § 365(b)

Question 148

A borrows money from B and contracts to transfer to him as security 100 shares of stock in X Corporation but does not create a security interest in specific shares. A dies insolvent without having kept his promise. B sues A’s administrator for specific performance. May specific performance be properly granted?

Answer 148

Specific performance will be refused on grounds of public policy because it would compel the administrator to commit a breach of his duty as trustee of the asset in his charge, even though A’s estate will be held liable in damages for breach of contract. Restatement 2d of Contracts § 365(b)

Question 149

A contracts to manufacture and deliver to B, for a price paid in advance, 100 articles as to which A has a monopoly under a patent. A manufactures 1,000 such articles but refuses to deliver any of them to B. B sues A for specific performance. A becomes insolvent and his other creditors file a petition in bankruptcy. A’s trustee intervenes in the suit to protect A’s assets. May specific performance be properly granted?

Answer 149

Specific performance will be refused because it would result in a preference, even though A will be held liable for breach of contract. But see Uniform Commercial Code § 2-502. Restatement 2d of Contracts § 365(b)

Question 150

A contracts to modernize and expand B’s steel fabricating plant at a cost of $50,000,000. A falls behind the schedule fixed in the agreement, and B seeks specific performance to compel A to requisition 300 more workmen for the night shift and take other steps to speed up the work. May specific performance be properly granted?

Answer 150

A court may properly refuse specific performance on the ground that the difficulty of supervision by the court would be disproportionate to the benefits to be gained from enforcement. Restatement 2d of Contracts § 366(a)

Question 151

A contracts to modernize and expand B’s steel fabricating plant at a cost of $50,000,000. A falls behind the schedule fixed in the agreement, and B seeks specific performance to compel A to requisition 300 more workmen for the night shift and take other steps to speed up the work. Under a clause in the contract or a subsequent submission, the dispute between A and B is referred to arbitration pursuant to rules stating that the arbitrator may grant any appropriate remedy including specific performance. The arbitrators award B specific performance. May a court properly confirm the award?

Answer 151

A court may properly confirm the award even though it would not have granted specific performance itself. Restatement 2d of Contracts § 366(a)

Question 152

A, a real estate developer, sells a lot to B, contracting with him to build a sewer system to serve it. B pays the price and builds a house on the lot. A builds a sewer system that is inadequate and endangers the health and comfort of B’s family. May specific performance be properly granted?

Answer 152

Specific performance will not be refused on the grounds that supervision by the court would be disproportionately difficult. Restatement 2d of Contracts § 366(a)

Question 153

A, a manufacturer of steel, contracts to sell B all of its output of steel scrap for a period of five years. After one year, A repudiates the contract and B sues A for specific performance. May specific performance be properly granted?

Answer 153

Specific performance will not be refused on the ground that supervision by the court over the balance of the five-year period would be disproportionately difficult. Restatement 2d of Contracts § 366(a)

Question 154

A, a noted opera singer, contracts with B to sing exclusively at B’s opera house during the coming season. A repudiates the contract before the time for performance in order to sing at C’s competing opera house, which will cause B great loss––though B cannot prove that with reasonable certainty. B sues A for specific performance. May specific performance be properly granted?

Answer 154

Even though A’s singing at C’s opera house will cause B great loss that he cannot prove with reasonable certainty, and even though A can find suitable jobs singing at opera houses not in competition with B’s, specific performance will be refused. Restatement 2d of Contracts § 367(b)

Question 155

A, a noted opera singer, contracts with B to sing exclusively at B’s opera house during the coming season. B discharges A from singing at B’s opera house, which would have greatly enhanced A’s reputation and earning power––though A cannot prove that with reasonable certainty. A sues for specific performance. May specific performance be properly granted?

Answer 155

Even though singing at B’s opera house would have greatly enhanced A’s reputation and earning power in an amount that A cannot prove with reasonable certainty, specific performance will be refused. Restatement 2d of Contracts § 367(b)

Question 156

A contracts to serve exclusively as sales manager in B’s clothing store for a year. A repudiates the contract shortly after beginning performance and goes to work for C, a competitor of B. B sues A for an injunction ordering A not to work for C. May an injunction be properly granted?

Answer 156

Unless A’s services are unique or extraordinary, the injunction will be refused. If, however, A has special knowledge of B’s customers that will cause a substantial number of them to leave B and patronize C, the injunction may properly be granted. Restatement 2d of Contracts § 367(c)

Question 157

A, a noted opera singer, contracts with B to sing exclusively at B’s opera house during the coming season. A repudiates the contract before the time for performance in order to sing at C’s competing opera house, which will cause B great loss––though B cannot prove that with reasonable certainty. B sues A for an injunction ordering A not to sing in C’s opera house. May an injunction be properly granted?

Answer 157

The injunction may properly be granted if C is a competitor of B. Otherwise, the injunction will not be granted because its principal effect would be indirectly to compel A to continue in B’s service. Restatement 2d of Contracts § 367©

Question 158

A, a noted opera singer, contracts with B to sing exclusively at B’s opera house for two seasons, reserving the power to terminate the contract at any time after the end of the first season by giving 24 hours’ written notice. A repudiates the contract when the second season is half over in order to sing at C’s competing opera house, and B sues to enjoin A from doing so. May an injunction be properly granted?

Answer 158

The injunction will not be granted. If, however, A repudiates when the first season is half over, the injunction may be granted. Restatement 2d of Contracts § 368(a)

Question 159

A sells his business to B and makes a valid promise not to carry on a competing business, reserving the power to terminate his duty not to compete by paying B $50,000. A repudiates his duty not to compete and threatens to operate a competing business, and B sues A to enjoin him from doing so. May an injunction be properly granted?

Answer 159

The injunction may be granted, conditional on A not having paid the $50,000. Restatement 2d of Contracts § 368(a)

Question 160

A, a minor, makes a contract to transfer a farm to B for $100,000. B repudiates the contract and A sues B for specific performance. May specific performance be properly granted?

Answer 160

Specific performance, even on condition of payment of the $100,000, will be refused if A has not reached the age of majority, unless the jurisdiction is one in which the court’s decree is conclusive on A so as to terminate his power of avoidance. After A reaches the age of majority and has ratified the contract, specific performance will be granted. Restatement 2d of Contracts § 368(b)

Question 161

A makes a contract with B under which B obtains rights to all the oil and gas that he can produce from A’s land for 10 years and promises to sink specific wells and pay A a fixed royalty on all oil and gas produced. The contract provides that B may at any time surrender his rights and terminate his duties on payment of $1. After B has sunk one well, A repudiates the contract and threatens to make a similar contract with C. B sues to enjoin A from interfering with his right to oil and gas as long as he continues to render substantial performance. May an injunction be properly granted?

Answer 161

The injunction may be granted. The result would be different if A repudiated before any performance by B and there was no way reasonably to secure B’s performance. Restatement 2d of Contracts § 368(b)

Question 162

A, a noted opera singer, contracts with B to sing exclusively at B’s opera house during the coming season, B reserving the right to terminate the contract on 10 days’ written notice. A repudiates the contract when the season is half over, after having been paid for that part of the season, in order to sing at C’s competing opera house, and B sues to enjoin A from singing at C’s opera house. May an injunction be properly granted?

Answer 162

The injunction may be granted, conditional on B’s continued readiness and willingness to perform his part of the contract. Restatement 2d of Contracts § 368(b)

Question 163

A contracts to sell B his farm, said to contain 150 acres and to have a house on it in good repair. The farm contains 149 acres and the house is in slight disrepair. A tenders a deed but B refuses to accept it or pay although the defects are not such as would discharge his remaining duties of performance (see § 241), and A sues B for specific performance. May specific performance be properly granted?

Answer 163

Specific performance may properly be granted with an abatement of the price in an amount equal to damages for the defects. See Illustration 3 to § 358. Restatement 2d of Contracts § 369(a)

Question 164

A contracts to sell to B his farm, conveyance and payment to be made on May 1. A tenders a deed on May 1 but B is not then able to pay. B tenders payment on May 10 but A refuses to convey although the delay is not such as would discharge his remaining duties of performance (see § 242), and B sues A for specific performance. May specific performance be properly granted?

Answer 164

Specific performance may properly be granted, conditional on B paying A any damages caused by the delay. Restatement 2d of Contracts § 369(a)

Question 165

A contracts to sell to B his farm, conveyance and payment to be made on May 1. A tenders a deed on May 1 but B is not then able to pay. B does not tender payment until September 1, A refuses to convey and the a delay sufficient to discharge A’s remaining duties of performance (see § 242). B sues A for specific performance. May specific performance be properly granted?

Answer 165

Specific performance will be refused on the ground of B’s breach. Restatement 2d of Contracts § 369(a)

Question 166

A, who holds a mortgage on B’s house, makes a contract with B under which A promises not to foreclose the mortgage for a year. In reliance on this promise, B invests money that he would have used to pay the mortgage in improving other land that he owns. A repudiates the contract and forecloses. What restitution, if anything, is B entitled to?

Answer 166

B cannot get restitution based on the improvements since making them conferred no benefit on A. But see Illustration 4 to § 373 and Illustration 11 to § 90. Restatement 2d of Contracts § 370(a)

Question 167

A contracts to sell B a machine for $100,000. After A has spent $40,000 on the manufacture of the machine but before its completion, B repudiates the contract. What restitution, if anything, is A entitled to?

Answer 167

A cannot get restitution of the $40,000 because no benefit was conferred on B. Restatement 2d of Contracts § 370(a)

Question 168

A promises to deposit $100,000 to B’s credit in the X Bank in return for B’s promise to render services. A deposits the $100,000, the X Bank fails, and B refuses to perform. What restitution, if anything, is A entitled to?

Answer 168

A can get restitution of the $100,000 because a benefit was to that extent conferred on B even though it was lost by B when the X Bank failed. See § 373. Restatement 2d of Contracts § 370(a)

Question 169

A contracts to work full time for B as a bookkeeper. In breach of this contract, A uses portions of the time that he should spend working for B in keeping books for C, who pays him an additional salary. B sues A for breach of contract. If B takes action against A, what––if anything––can B recover?

Answer 169

B cannot recover from A the amount of the salary paid by C because it was not a benefit conferred by B. Restatement 2d of Contracts § 370(a)

Question 170

A, a social worker, promises B to render personal services to C in return for B’s promise to educate A’s children. B repudiates the contract after A has rendered part of the services. What restitution, if anything, is A entitled to?

Answer 170

A can get restitution from B for the services, even though they were not rendered to B, because they conferred a benefit on B. See Illustration 3 to § 371. Restatement 2d of Contracts § 370(a)

Question 171

A, a carpenter, contracts to repair B’s roof for $3,000. A does part of the work at a cost of $2,000, increasing the market price of B’s house by $1,200. The market price to have a similar carpenter do the work done by A is $1,800. What restitution, if anything, is A entitled to?

Answer 171

A’s restitution interest is equal to the benefit conferred on B. That benefit may be measured either by the addition to B’s wealth from A’s services in terms of the $1,200 increase in the market price of B’s house or the reasonable value to B of A’s services in terms of the $1,800 that it would have cost B to engage a similar carpenter to do the same work. If the work was not completed because of a breach by A and restitution is based on the rule stated in § 374, $1,200 is appropriate. If the work was not completed because of a breach by B and restitution is based on the rule stated in § 373, $1,800 is appropriate. Restatement 2d of Contracts § 371(b)

Question 172

A, a surgeon, contracts to perform a series of emergency operations on B for $3,000. A does the first operation, saving B’s life, which can be valued in view of B’s life expectancy at $1,000,000. The market price to have an equally competent surgeon do the first operation is $1,800. What restitution, if anything, is A entitled to?

Answer 172

A’s restitution interest is equal to the benefit conferred on B. That benefit is measured by the reasonable value to B of A’s services in terms of the $1,800 that it would have cost B to engage a similar surgeon to do the operation regardless of the rule on which restitution is based. Restatement 2d of Contracts § 371(b)

Question 173

A, a social worker, promises B to render personal services to C in return for B’s promise to educate A’s children. A renders only part of the services and B then refuses to educate A’s children. The market price to have a similar social worker do the services rendered by A is $1,800. What restitution, if anything, is A entitled to?

Answer 173

If A recovers in restitution under the rule stated in § 373, an appropriate measure of the benefit conferred on B is the reasonable value to B of A’s services in terms of the $1,800 that it would have cost B to engage a similar social worker to do the same work. Restatement 2d of Contracts § 371(b)

Question 174

A is induced by B’s misrepresentation to sell a tract of land to B for $100,000. On discovery of the misrepresentation, A tenders back the $100,000 and sues B for specific restitution of the land. May specific restitution be properly granted?

Answer 174

Specific restitution will be granted. Restatement 2d of Contracts § 372(a)

Question 175

A contracts to transfer a tract of land to B in return for B’s promise to transfer a tract of land to A at the same time. After A has transferred his tract to B and received a deed from B, A learns that B does not have title to the other tract. A sues B for specific restitution. May specific restitution be properly granted?

Answer 175

Specific restitution will be granted, together with compensation to A for the value to B of the use of the land, because the right to specific restitution will not unduly interfere with the certainty of title to land. If B’s promise is to transfer his tract to A ten years after A’s transfer of his tract, specific restitution will be denied because a right to specific restitution would unduly interfere with the certainty of title to land during the ten years. Restatement 2d of Contracts § 372(b)

Question 176

A contracts to transfer a tract of land to B in return for B’s promise to support A for life. B repudiates the contract after he has supported A for a time and A has transferred the land to him, and A sues B for specific restitution. May specific restitution be properly granted?

Answer 176

Specific restitution will be granted, conditional on compensation by A for any support that he has received less the value to B of the use of the land, because the right to specific restitution will not unduly interfere with the certainty of title to land given the inadequacy of A’s right to damages because of the difficulty of proving damages with sufficient certainty (§ 352). Restatement 2d of Contracts § 372(b)

Question 177

A contracts to transfer a tract of land to B in return for B’s promise to transfer a tract of land to A at a later date. After A has transferred his tract of land to B, B sells both tracts to C, a good faith purchaser for value, taking a mortgage to secure the balance of the price on the tract transferred by A. A sues B and C for specific restitution. May specific restitution be properly granted?

Answer 177

Specific restitution will be denied but A can get a decree subrogating him to B’s right to the balance of the price and to his rights under the purchase money mortgage that secures it. Restatement 2d of Contracts § 372(b)

Question 178

A contracts to transfer to B half of his 20,000 shares of stock in the X Corporation in return for B’s promise to pay $100,000, to organize a holding company to control X Corporation and to protect A’s remaining interest as a shareholder. After A has transferred the stock and B has paid the $100,000, B refuses to organize the holding company. A sues B for specific restitution. May specific restitution be properly granted?

Answer 178

Specific restitution may properly be granted conditional on repayment by A of the $100,000. Restatement 2d of Contracts § 372(b)

Question 179

A makes an oral contract with B under which A transfers 1,000 shares of stock to B in return for B’s promise to convey a tract of land to A. B repudiates the contract before he has conveyed the land and tenders back the stock and the dividends received from it and keeps his tender good. A rejects the tender and sues B for restitution of the value to B of the stock. What restitution, if anything, can A recover?

Answer 179

A cannot recover the value of the stock. Restatement 2d of Contracts § 372(c)

Question 180

A contracts to sell a tract of land to B for $100,000. After B has made a part payment of $20,000, A wrongfully refuses to transfer title. What restitution, if anything, can B recover?

Answer 180

B can recover the $20,000 in restitution. The result is the same even if the market price of the land is only $70,000, so that performance would have been disadvantageous to B. Restatement 2d of Contracts § 373(a)

Question 181

A contracts to build a house for B for $100,000, progress payments to be made monthly. After having been paid $40,000 for two months, A commits a breach that is not material by inadvertently using the wrong brand of sewer pipe. Can B recover the $40,000?

Answer 181

B has a claim for damages for partial breach but cannot recover the $40,000 that he has paid A. Restatement 2d of Contracts § 373(a)

Question 182

On February 1, A and B make a contract under which, as consideration for B’s immediate payment of $50,000, A promises to convey to B a parcel of land on May 1. On March 1, A repudiates by selling the parcel to C. On April 1, B commences an action against A. What restitution, if anything, can B recover?

Answer 182

Although under the rule stated in § 253(1), B has no claim against A for damages for breach of contract until performance is due on May 1, B can recover $50,000 from A in restitution. See Illustration 4 to § 253. Restatement 2d of Contracts § 373(a)

Question 183

A, who holds a mortgage on B’s land, promises B that he will not foreclose the mortgage for another year, even if B makes no payments. In reliance on A’s promise, B makes valuable improvements. A forecloses in breach of his promise and buys the land at a judicial sale for the amount of the mortgage debt. What restitution, if anything, can B recover?

Answer 183

B can recover in restitution for the value of the improvements. Compare Illustration 1 to § 370. See also Illustration 12 to § 90. Restatement 2d of Contracts § 373(a)

Question 184

A contracts to work for B for one month for $10,000. After A has fully performed, B repudiates the contract and refuses to pay the $10,000. What, if anything, can A recover regarding damages and/or restitution?

Answer 184

A can get damages against B for $10,000, together with interest, but cannot recover more than that sum even if he can show that the benefit to B from the services was greater than $10,000. Restatement 2d of Contracts § 373(b)

Question 185

A contracts to sell a tract of land to B for $100,000. After B has paid the full $100,000, A repudiates and refuses to transfer title. What restitution, if anything, can B recover?

Answer 185

B has a right to $100,000 in restitution. Restatement 2d of Contracts § 373(b)

Question 186

A contracts to build a building for B in return for B’s promise to transfer a tract of land to A and to pay $10,000. After A has built the building, B refuses to transfer title or to pay the $10,000. What restitution, if anything, can A recover?

Answer 186

A has a right to the reasonable value of his work and materials. Restatement 2d of Contracts § 373(b)

Question 187

A contracts to work as a consultant for B for a fee of $50,000, payable at the end of the year, together with a payment of $200 a month for A’s use of his own car and reimbursement of A’s expenses. B wrongfully discharges A at the end of six months. What restitution, if anything, can A recover?

Answer 187

A cannot recover in restitution for the use of his car or for his expenses, but can recover for these items as provided in the contract. As to his recovery for his services, see Illustration 12 to § 373. Restatement 2d of Contracts § 373(c)

Question 188

A contracts to build a house for B for $50,000, progress payments to be made monthly in an amount equal to 85% of the price of the work performed during the preceding month, the balance to be paid on the architect’s certificate of satisfactory completion of the house. B makes the first three payments and then repudiates the contract and has another builder finish the house. What restitution, if anything, can A recover?

Answer 188

A can recover in restitution for the reasonable value of his work, labor and materials, less the amount of the three payments. The performance during each month and the corresponding progress payments are not agreed equivalents under the rule stated in § 240. See Illustration 7 to § 240. Restatement 2d of Contracts § 373(c)

Question 189

A, a plumbing subcontractor, contracts with B, a general contractor, to install the plumbing in a factory being built by B for C. B promises to pay A $100,000. After A has spent $40,000, B repudiates the contract and has the plumbing finished by another subcontractor at a cost of $80,000. The market price to have a similar plumbing subcontractor do the work done by A is $40,000. What restitution, if anything, can A recover?

Answer 189

A can recover the $40,000 from B in restitution. Restatement 2d of Contracts § 373(d)

Question 190

A contracts to build a house for B for $100,000. After A has spent $40,000, B discovers that he does not have good title to the land on which the house is to be built. B repudiates the contract and abandons the project. A’s work results in no actual benefit to B. What restitution, if anything, can A recover?

Answer 190

A cannot recover in restitution from B, but under the rule stated in § 349 he can recover as damages the $40,000 that he has spent unless B proves with reasonable certainty that A would have sustained a net loss if the contract had been performed. See Illustration 4 to § 349. Restatement 2d of Contracts § 373(d)

Question 191

A contracts to work as a consultant for B for a fee of $50,000, payable at the end of the year. B wrongfully discharges A at the end of eleven months. What restitution, if anything, can A recover?

Answer 191

A can recover in restitution based on the reasonable value of his services. The terms of the contract are evidence of this value but are not conclusive. Restatement 2d of Contracts § 373(d)

Question 192

A contracts to build a bridge for B for $100,000. B repudiates the contract shortly after A has begun work on the bridge, telling A that he no longer has need for it. A nevertheless spends an additional $10,000 in continuing to perform. What restitution, if anything, can A recover?

Answer 192

A’s restitution interest under the rule stated in § 370 does not include the benefit conferred on B by the $10,000. See Illustration 1 to § 350. Restatement 2d of Contracts § 373(e)

Question 193

A contracts to sell land to B for $100,000, which B promises to pay in $10,000 installments before transfer of title. After B has paid $30,000 he fails to pay the remaining installments and A sells the land to another buyer for $95,000. What restitution, if anything, can B recover?

Answer 193

B can recover $30,000 from A in restitution less $5,000 damages for B’s breach of contract, or $25,000. If A does not sell the land to another buyer and obtains a decree of specific performance against B, B has no right to restitution. Restatement 2d of Contracts § 374(b)

Question 194

A contracts to make repairs to B’s building in return for B’s promise to pay $10,000 on completion of the work. After spending $8,000 on the job, A fails to complete it because of insolvency. B has the work completed by another builder for $4,000, increasing the value of the building to him by a total of $9,000, but he loses $500 in rent because of the delay. What restitution, if anything, can A recover?

Answer 194

A can recover $5,000 from B in restitution less $500 in damages for the loss caused by the breach, or $4,500. Restatement 2d of Contracts § 374(b)

Question 195

A contracts to make repairs to B’s building in return for B’s promise to pay $10,000 on completion of the work. A makes repairs costing him $8,000 but inadvertently fails to follow the specifications in such material respects that there is no substantial performance. See Comment d to § 237. The defects cannot be corrected without the destruction of large parts of the building, but the work confers a benefit on B by increasing the value of the building to him by $4,000. What restitution, if anything, can A recover?

Answer 195

A can recover $4,000 from B in restitution. Restatement 2d of Contracts § 374(b)

Question 196

A contracts to make repairs to B’s building in return for B’s promise to pay $10,000 on completion of the work. A makes repairs costing him $8,000 but inadvertently fails to follow the specifications in such material respects that there is no substantial performance. See Comment d to § 237. The defects do not require destruction of large parts of the building and can be corrected for $4,000, which will confer a benefit on B by increasing the value of the building to him by a total of $9,000. What restitution, if anything, can A recover?

Answer 196

A can recover $5,000 from B in restitution. Restatement 2d of Contracts § 374(b)

Question 197

A contracts to tutor B’s son for six months in preparation for an examination, in return for which B promises to pay A $2,000 at the end of that time. After A has worked for three months, he leaves to take another job and B is unable to find a suitable replacement. What restitution, if anything, can B recover?

Answer 197

In the absence of any reliable basis for measuring the benefit to B from A’s part performance, restitution will be denied. Restatement 2d of Contracts § 374(b)

Question 198

A contracts to sell land to B for $100,000, which B promises to pay in $10,000 installments before transfer of title. After B has paid $30,000 he fails to pay the remaining installments and A sells the land to another buyer for $95,000. The contract provides that on default by B, A has the right to retain the first $10,000 installment paid by B. What restitution, if anything, can B recover?

Answer 198

If $10,000 is a reasonable amount, B can recover only $20,000 from A in restitution. Restatement 2d of Contracts § 374(c)

Question 199

A contracts to sell land to B for $100,000, which B promises to pay in $10,000 installments before transfer of title. After B has paid $30,000 he fails to pay the remaining installments and A sells the land to another buyer for $95,000. The contract provides that on default by B, A has the right to retain any installments paid by B. Is the provision valid? What restitution, if anything, can B recover?

Answer 199

The provision is not valid, and B can still recover $30,000 from A in restitution less $5,000 damages for B’s breach of contract, or $25,000. Restatement 2d of Contracts § 374(c)

Question 200

A makes an oral contract to furnish services to B that are not to be performed within a year (§ 130). After A has worked for two months B discharges him without paying him anything. What restitution, if anything, can A recover?

Answer 200

A can recover from B as restitution the reasonable value of the services rendered during the two months. Restatement 2d of Contracts § 375(a)

Question 201

A makes an oral contract to sell a tract of land to B for $100,000 (§ 125). B pays $50,000, takes possession and makes improvements. A then refuses to convey the land to B, and B sues A for restitution of $50,000 plus $20,000, the reasonable value of the improvements, less $5,000, the value to B of the use of the land. What restitution, if anything, can B recover?

Answer 201

B can recover $65,000 from A. Restatement 2d of Contracts § 375(a)

Question 202

A, a home owner, makes an oral contract with B, a real estate broker, to pay B the usual 5% commission if B succeeds in selling A’s house. The state Statute of Frauds contains a provision providing that a real estate broker shall have no right to such a commission unless there is a written memorandum of the contract. B sells A’s house for $100,000 and sues A in restitution for $5,000, the reasonable value of B’s services. What restitution, if anything, can B recover?

Answer 202

B cannot recover in restitution because the purpose of the Statute would be frustrated if B were allowed to recover as restitution the same amount that had been promised under the contract. Restatement 2d of Contracts § 375(a)

Question 203

A makes an oral contract to buy a tract of land from B for $100,000 (§ 125). Payment is to be made in $10,000 installments, conveyance to be made on the payment of the third installment. A pays $10,000 and then refuses to pay any more and sues B to recover in restitution the $10,000 that he has paid. What restitution, if anything, can A recover?

Answer 203

If B signs a sufficient memorandum, A’s refusal to pay is a defense to his action under the rule stated in § 141(1) and A cannot get restitution. See Illustration 6 to § 374. If B refuses to sign a sufficient memorandum, A’s refusal to pay is not a defense under the rule stated in § 141(2) and A can get restitution. See Illustration 1 to § 373. Restatement 2d of Contracts § 375(b)

Question 204

A contracts to sell an automobile to B, an infant, for $2,000. After A has delivered the automobile and B has paid the $2,000, B disaffirms the contract on the ground of infancy (§ 14), tenders the automobile back to A, and sues A for $2,000. What restitution, if anything, can B recover?

Answer 204

B can recover the $2,000 from A in restitution. Restatement 2d of Contracts § 376(a)

Question 205

A contracts to sell and B to buy for $100,000 a tract of land, the value of which has depended mainly on the timber on it. Both A and B believe that the timber is still there, but in fact it has been destroyed by fire. After A has conveyed the land to B and B has paid the $100,000, B discovers the mistake. B disaffirms the contract for mistake (§ 152), tenders a deed to the land to A, and sues A for $100,000. What restitution, if anything, can B recover?

Answer 205

B can recover $100,000 from A in restitution. See Illustration 1 to § 152. Restatement 2d of Contracts § 376(a)

Question 206

A submits a $150,000 offer in response to B’s invitation for bids on the construction of a building. A believes that this is the total of a column of figures, but he has made an error by inadvertently omitting $50,000, and in fact the total is $200,000. Because B had estimated the expected cost as $180,000 and the 10 other bids were all in the range between $180,000 and $200,000, B had reason to know of A’s mistake. A discovers the mistake after he has done part of the work, disaffirms the contract on the ground of mistake (§ 153), and sues B in restitution for the benefit conferred on B as measured by the reasonable value of A’s performance. What restitution, if anything, can A recover?

Answer 206

A can recover the reasonable value of his performance in restitution and if the cost of the work done can be determined under the next lowest bid, that cost is evidence of its reasonable value. See Illustration 9 to § 153. Restatement 2d of Contracts § 376(a)

Question 207

A fraudulently induces B to make a contract to buy a tract of land for $100,000. After A has conveyed the land and B has paid the price, B makes improvements on the land with a reasonable value of $20,000. B then discovers the fraud, disaffirms the contract for misrepresentation (§ 164), tenders a deed to the land to A, and sues A for $100,000 plus $20,000, the reasonable value of the improvements, less $5,000, the value to B of the use of the land. What restitution, if anything, can B recover?

Answer 207

B can recover $115,000 in restitution from A. See Illustration 1 to § 164. Restatement 2d of Contracts § 376(a)

Question 208

A fraudulently induces B to make a contract to sell a tract of land for $100,000. After B has conveyed the land and A has paid the price, A farms the land at a net profit of $10,000. B then discovers the fraud, disaffirms the contract for misrepresentation, tenders back the $100,000, and sues A for specific restitution plus the $10,000 profit that A made by farming the land. What restitution, if anything, can B recover?

Answer 208

B can recover the land and $10,000 in restitution from A. Restatement 2d of Contracts § 376(a)

Question 209

A contracts to employ B as a confidential secretary for a month for $2,000, to be paid at the end of that time. B falls ill after working for two weeks and the duties of performance of both A and B are discharged as a result of impracticability of performance (§ 262). What restitution, if anything, can B recover?

Answer 209

B is entitled to restitution from A for the services that he has performed. See Illustration 1 to § 262. The result is the same if B’s duty is discharged as a result of A’s illness rather than B’s. See Illustration 2 to § 262. Restatement 2d of Contracts § 377(a)

Question 210

A contracts to employ B as a confidential secretary for a month for $2,000, to be paid in advance. B falls ill after A has paid the $2,000 but before B has begun work and the duties of performance of both A and B are discharged as a result of impracticability of performance (§ 262). What restitution, if anything, can A recover?

Answer 210

A is entitled to restitution of $2,000 from B. If B had fallen ill after working for two weeks, B would also be entitled to restitution from A for the services that he has performed. Restatement 2d of Contracts § 377(a)

Question 211

A contracts to sell and B to buy a house for $50,000, conditional on approval by X Bank of B’s pending mortgage application. B pays A $5,000 when the contract is signed. In spite of reasonable efforts by B, the X Bank does not approve his application and his duty of performance is discharged (§ 225). What restitution, if anything, can B recover?

Answer 211

B is entitled to restitution of $5,000 from A. See Illustration 8 to § 225. Restatement 2d of Contracts § 377(a)

Question 212

A contracts with B to shingle the roof of B’s house for $5,000, payable as the work progresses. After A has spent $2,000 doing part of the work and has been paid $1,800, much of the house including the roof is destroyed by fire without his fault, and the duties of performance of both A and B are discharged as a result of impracticability of performance (§ 263). The work done before the fire increased the market price and the insurable value of the house by $1,500. What restitution, if anything, can A recover?

Answer 212

A is entitled to restitution of $1,500 from B and B is entitled to restitution of $1,800 from A. See Illustration 3 to § 263. Restatement 2d of Contracts § 377(b)

Question 213

A contracts with B to shingle the roof of B’s house for $5,000, payable as the work progresses. After A has spent $2,000 doing part of the work and has been paid $1,800, much of the house is destroyed by fire without his fault––including the roof, and also shingles that had cost A $500 and that were piled near the house for the rest of the work––and the duties of performance of both A and B are discharged as a result of impracticability of performance (§ 263). The work done before the fire increased the market price and the insurable value of the house by $1,500. What restitution, if anything, can A recover?

Answer 213

A is not entitled to restitution of this loss from B. Nor can A subtract the $500 from the $1,800 he has been paid in determining the benefit that he has received. The court may, however, take this loss into consideration in deciding whether to allow A restitution of $1,500 or $2,000. See also § 272. Restatement 2d of Contracts § 377(b)

Question 214

A contracts to paint some bizarre frescoes in B’s house for $10,000. The frescoes will not increase the market value of the house. A dies after the frescoes have been partly completed. Other artists can adequately complete the work and will do so for $6,000. What restitution, if anything, can A’s executors recover?

Answer 214

A’s executors are entitled to restitution of $4,000 from B. If they can prove that A’s price was unusually low because of A’s lack of employment and an economic depression and that the work was roughly half finished, the court may properly allow restitution of $5,000. Restatement 2d of Contracts § 377(b)

Question 215

A contracts to tutor B’s son for six months in preparation for an examination, in return for which B promises to pay A $2,000 at the end of that time. After A has worked for three months, B’s son becomes ill and the duties of performance of both A and B are discharged as a result of impracticability of performance. Other tutors 3. A contracts to transfer his farm to B in return for B’s promise to support A for life. After A has transferred the farm, B repudiates the contract and A sues for damages. Before any change in B’s position, A discovers that it will be difficult to prove his damages with reasonable certainty and that a judicial sale of B’s property including the farm would be unlikely to realize enough to satisfy a judgment and amends his complaint to ask specific restitution. May specific restitution be precluded?

Answer 215

Specific restitution is not precluded. Restatement 2d of Contracts § 377(b)

Question 216

A contracts to sell a tract of land to B. A repudiates and B brings an action for damages. While this action is pending, A makes valuable improvements on the land reasonably believing that B does not intend to pursue his remedy of specific performance. B then amends his complaint to ask specific performance. May specific performance be precluded?

Answer 216

If A’s change of position is material, B’s claim for specific performance is precluded. Restatement 2d of Contracts § 378(a)

Question 217

A contracts to transfer his farm to B in return for B’s promise to support A for life. After A has transferred the farm, B repudiates the contract and A sues for specific restitution. Before any change in B’s position, A learns that a part of the farm has been sold by B and amends his complaint to ask for damages for the breach. May A’s claim for damages be precluded?

Answer 217

A’s claim for damages is not precluded. Restatement 2d of Contracts § 378(a)

Question 218

A contracts to transfer his farm to B in return for B’s promise to support A for life. After A has transferred the farm, B repudiates the contract and A sues for damages. Before any change in B’s position, A discovers that it will be difficult to prove his damages with reasonable certainty and that a judicial sale of B’s property including the farm would be unlikely to realize enough to satisfy a judgment and amends his complaint to ask specific restitution. May specific restitution be precluded?

Answer 218

Specific restitution is not precluded. Restatement 2d of Contracts § 378(a)

Question 219

A makes an oral contract to transfer his farm to B in return for B’s promise to support A for life. After A has transferred the farm, B repudiates the contract and A sues for damages. B pleads the Statute of Frauds and A’s action is about to be dismissed. A then amends his complaint to ask specific restitution. May specific restitution be precluded?

Answer 219

Regardless of whether B has changed his position, specific restitution is not precluded. Restatement 2d of Contracts § 378(c)

Question 220

A makes a written contract to sell a tract of land to B. A repudiates the contract and B, claiming that both parties were mistaken as to the contents of the writing, sues A for reformation of the writing and for specific performance of the contract as reformed. The court refuses to reform the writing on the ground that mistake was not proved and B amends his complaint to ask damages for breach of the contract as written. May this claim for damages be precluded?

Answer 220

B’s claim for damages is not precluded. Restatement 2d of Contracts § 378(c)

Question 221

A contracts to sell a tract of land to B. A fails to convey the tract and B sues A for specific performance. B later amends his complaint to add a claim for damages resulting from the delay caused by A’s failure. May B’s further claim for damages be precluded?

Answer 221

Regardless of whether A has changed his position, such a further claim is not precluded. Restatement 2d of Contracts § 378(d)

Question 222

A, an insurance company, issues to B a policy of fire insurance on B’s house for a year in the amount of $100,000. In consideration, B gives A his promissory note for the premium, payable in three months. B fails to pay the note at maturity. Four months later, before A has given notice of cancellation, B’s house burns. Was A’s duty discharged?

Answer 222

A cannot treat B’s failure to pay as discharging it from its duty to pay for the loss under the policy. A is liable for the loss less the amount of the note. Restatement 2d of Contracts § 379(a)

Question 223

A makes a contract with B under which A guarantees that C will pay a $100,000 debt owed B by C and due on July 1. In consideration, B promises to pay A $1,000 on May 1. B fails to pay on that date. Before A manifests to B his intention to treat B’s failure as discharging him from his duty to honor his guarantee of C’s debt, C becomes insolvent. Was A’s duty discharged?

Answer 223

A cannot treat B’s failure as discharging him from that duty and is liable on his $100,000 guarantee less the $1,000. Restatement 2d of Contracts § 379(a)

Question 224

A and B make a contract under which A guarantees a $50,000 debt owed to B by C and due on July 1 in consideration of a guarantee by B of a $100,000 debt owed to A by D and due on August 1. C fails to pay on July 1 and A fails to honor his guarantee. Before B manifests his intention to treat A’s failure as discharging B from his duty to honor his guarantee of D’s debt, D becomes insolvent. Was B’s duty discharged?

Answer 224

B cannot treat A’s failure as discharging him from that duty and is liable on his $100,000 guarantee less the $50,000 that A owes on his guarantee. Restatement 2d of Contracts § 379(a)

Question 225

A is induced by B’s misrepresentation to make a contract to repair B’s house, payment to be made when the services have been rendered. When A discovers the facts, he accuses B of fraud and threatens to avoid the transaction unless B pays in advance or furnishes security. Before A receives any response from B, A notifies B that he avoids the contract. Did A’s conduct amount to affirmance?

Answer 225

A’s conduct did not amount to affirmance and the contract is avoided. The result would be different, however, if A demanded that B perform the contract or accepted security from B. Restatement 2d of Contracts § 380(a)

Question 226

A is induced by B’s misrepresentation to make a contract to employ B for a year. When A discovers the facts, he continues to employ B for two weeks and then discharges him in violation of the contract, notifying B that he avoids the contract. Did A’s conduct amount to affirmance?

Answer 226

A’s conduct amounted to affirmance and he is liable to B for breach of contract. The result would not be affected if A did not learn until the end of the two weeks that the law gave him the power to avoid the contract. The result would be different, however, if B had persuaded A to continue the employment for another two weeks as a trial period and A discharged B at the end of that time because A was still dissatisfied. Restatement 2d of Contracts § 380(a)

Question 227

A is induced by B’s fraudulent and material misrepresentation to buy land from B. When A discovers the fraud he brings an action in deceit against B. A later discontinues the action and notifies B that he avoids the contract. Did A’s conduct amount to affirmance?

Answer 227

Since A’s bringing of the action was a manifestation of his intention to affirm the contract only if damages are paid, it did not without more amount to affirmance. A’s subsequent attempt to avoid the contract was effective. Restatement 2d of Contracts § 380(a)

Question 228

A contracts to sell and B to buy a tract of land, the value of which has depended mainly on the timber on it. Both A and B believe that the timber is still there, but in fact it has been destroyed by fire so that the contract is voidable by B on the ground of mistake. See Illustration 1 to § 152. On discovery of the mistake, B tenders a deed back to A, who refuses to accept it. B continues to occupy and to use the land. Did B’s conduct amount to affirmance?

Answer 228

B’s conduct amounts to affirmance and he is precluded from avoiding the contract. Restatement 2d of Contracts § 380(a)

Question 229

A is induced by B’s misrepresentation to contract in January to sell B 1,000 shares of stock in the X Corporation for $100,000, delivery and payment to be on May 1. A discovers the fraud in February but does not manifest his intention to avoid the transaction until April. Is A’s avoidance effective?

Answer 229

In view of the extent to which A’s delay of two months enabled him to speculate at B’s expense, A has lost his power of avoidance, and his manifestation is not effective to avoid the transaction. Compare Illustration 2 to § 379. The result does not depend on whether the market price of the stock has risen or fallen. Restatement 2d of Contracts § 381(b)

Question 230

A, a noted opera singer, is induced by B’s nonfraudulent misrepresentation to contract in April to sing the leading role in a new production designed for A at B’s opera house in October. A soon discovers the misrepresentation but does not manifest an intention to avoid the transaction until June. By that time B has made substantial commitments for the production in reliance on A’s singing the leading role. Is A’s avoidance effective?

Answer 230

In view of the likelihood and the extent of such reliance, A has lost the power of avoidance, and A’s manifestation is not effective to avoid the contract. Restatement 2d of Contracts § 381(b)

Question 231

A, a noted opera singer, is induced by B’s nonfraudulent misrepresentation to contract in April to sing the leading role in a new production designed for A at B’s opera house in October. A does not discover the misrepresentation until June, immediately before A’s manifestation of intention to avoid the contract. By that time B has made substantial commitments for the production in reliance on A’s singing the leading role. Is A’s avoidance effective?

Answer 231

In spite of B’s reliance, A has not lost the power of avoidance and A’s manifestation is effective. Restatement 2d of Contracts § 381(b)

Question 232

A contracts to buy from B a farm that B misrepresents as containing 100 acres of cleared land, 100 acres of brush, and a well with an adequate supply of water. A week later A discovers that only 80 acres have been cleared, but he does not discover that the well is dry, although a careful inspection would have revealed this. When he moves onto the farm six months later, he discovers that the well is dry and promptly notifies B that he avoids the contract. Is A’s avoidance effective?

Answer 232

A has not lost his power to avoidance on the ground of the misrepresentation as to the well, even though he may have lost his power of avoidance on the ground of the misrepresentation as to the cleared land. Restatement 2d of Contracts § 381(b)

Question 233

A contracts to sell and B to buy a tract of land, the value of which has depended mainly on the timber on it, delivery of the deed and payment of the price to be made in a week. Both A and B believe that the timber is still there, but in fact it has been destroyed by fire, so that the contract is voidable by B. See Illustration 1 to § 152. B discovers the mistake and when the next day, A tenders a deed to the tract, B refuses to perform without giving any reason. Is B’s avoidance sufficiently manifested?

Answer 233

B’s refusal of performance is a sufficient manifestation of his intention to avoid the contract even though no reason was given. Restatement 2d of Contracts § 381(b)

Question 234

A contracts to sell and B to buy a tract of land, the value of which has depended mainly on the timber on it, delivery of the deed and payment of the price to be made in a week. Both A and B believe that the timber is still there, but in fact it has been destroyed by fire, so that the contract is voidable by B. See Illustration 1 to § 152. B discovers the mistake. Then, on the day fixed for performance, A makes no offer to deliver a deed to the tract. B refuses to perform without giving any reason. Is B’s avoidance sufficiently manifested?

Answer 234

B’s refusal of performance is not a sufficient manifestation of his power of avoidance because it was justified by A’s failure to offer to deliver a deed. Restatement 2d of Contracts § 381(b)

Question 235

A, seeking to induce B to make a contract to buy his house for $50,000, tells B that the roof is in “good condition.” A is mistaken and unknown to him the roof has a hidden defect that can be fully remedied for $1,000. B is induced by the statement to make the proposed contract, and, two years after taking possession, he discovers the defect. Is B’s avoidance effective?

Answer 235

Even if the court considers the statement a material misrepresentation, it may conclude that the contract is no longer voidable and limit B’s relief to the recovery of recover the price because his regaining possession of the automobile was an exercise of his power of avoidance. Restatement 2d of Contracts § 381(c)

Question 236

A makes a contract to work for B for a year and is induced by B’s fraud to assent to a covenant under which he agrees to refrain from entering into a similar business in the same town for three years after the termination of the employment. A discovers the fraud after he has worked for a month. Can A’s avoid only the covenant and not the entire contract?

Answer 236

A cannot avoid the covenant not to compete without avoiding the rest of the contract. Restatement 2d of Contracts § 383(a)

Question 237

A is induced by B’s fraud to contract to sell B 1,200 tons of coal to be delivered in monthly installments of 100 tons, payment for each installment to be made on delivery. A discovers the fraud after the second delivery. Can A’s avoid only the contract and not the unperformed part?

Answer 237

If A avoids the contract, he must avoid the entire unperformed part, but he does not have to avoid the part that has been performed unless he chooses to do so. Restatement 2d of Contracts § 383(b)

Question 238

A contracts to sell to B a factory and a patent and B makes a part payment of $100,000. A assigns the patent but fails to transfer the factory to B. B sues A asking restitution of $100,000 without offering to reassign the patent. What judgment, if any, is B entitled to?

Answer 238

B is entitled to a judgment for that amount conditional on his tender of a reassignment of the patent. Restatement 2d of Contracts § 384(b)

Question 239

A is induced by B’s fraudulent misrepresentations to contract to sell to B for $10,000 an antique worth $100,000. A delivers the antique and B pays the $10,000. On discovery of the fraud, A demands the return of the antique without offering to repay the $10,000. On B’s refusal, A sues B in conversion for the value of the antique. What judgment, if any, is A entitled to?

Answer 239

A is entitled to a judgment for $90,000, the value of the antique less $10,000. Restatement 2d of Contracts § 384(b)

Question 240

A is induced by B’s fraudulent misrepresentations to contract to sell to B for $10,000 an antique worth $100,000. A delivers the antique and B pays the $10,000. On discovery of the fraud, A demands the return of the antique without offering to repay the $10,000. On B’s refusal, A sues B in replevin and posts a bond. May replevin be properly granted?

Answer 240

If the procedure in replevin does not permit an adequate opportunity for the determination of A’s claim of fraud before return of the antique to him, replevin will be denied on the ground that he has not offered to return the $10,000. Restatement 2d of Contracts § 384(b)

Question 241

A contracts to work on B’s ranch in return for a number of cattle warranted by B to be sound. After A has done the work and B has delivered the cattle, they are discovered to have hoof and mouth disease and are destroyed by government order. What restitution, if anything, is A entitled to?

Answer 241

A is entitled to restitution of the reasonable value of his services. Restatement 2d of Contracts § 384(c)

Question 242

A puts his son in B’s private school, paying a year’s tuition in advance. During the first month of school, the son is wrongfully expelled by B. What restitution, if anything, is A entitled to?

Answer 242

A is entitled to restitution of the amount of tuition paid less the benefit to A of B’s services during the first month. Restatement 2d of Contracts § 384(c)

Question 243

A contracts to buy from B his seat on the stock exchange, his good will and the furniture in his office and pays $10,000 as part of the price. B delivers the furniture and A sells it to others. Later B refuses to perform the rest of the contract. What restitution, if anything, is A entitled to?

Answer 243

A is entitled to restitution of $10,000 less compensation to B for the furniture. Restatement 2d of Contracts § 384(c)

Question 244

A contracts to lease a plow and a tractor to B, to be used together. The price is stated to be $200 for the plow and $500 for the tractor, and B pays the full $700 in advance. A delivers the plow but fails to deliver the tractor. What restitution, if anything, is B entitled to?

Answer 244

B can offer to return the plow and get restitution of $700. Because the prices are apportioned, B can also keep the plow and get restitution of $500. Restatement 2d of Contracts § 384(c)

Question 245

A is induced by B’s fraud to make a contract to buy goods from B. While A is still ignorant of the fraud and before he has received the goods from B, A writes a letter telling him that he refuses to perform. B sues A for damages for total breach by repudiation. Is A liable?

Answer 245

A is not liable to B because, since A has no duty of performance, his letter was not a repudiation. Restatement 2d of Contracts § 385(a)

Question 246

A is induced by B’s fraud to make a contract to buy goods from B. A delays for an unreasonable time after discovery of the fraud and then, before he has received the goods, writes B a letter telling him that he refuses to perform on the ground of fraud. B sues A for damages for total breach by repudiation. Is A liable?

Answer 246

A is liable to B because, A’s power of avoidance having been lost by delay, he had a duty of performance and his letter was a repudiation. Restatement 2d of Contracts § 385(a)

Question 247

A is induced by B’s fraud to make a contract to buy goods from B. While A is still ignorant of the fraud but after he has received the goods from B, A commits a material breach by failure to pay B. A then discovers the fraud and tenders the goods back to B. B sues A for damages for total breach of contract. Is A liable?

Answer 247

Even if an offer to return the goods was a condition of avoidance by A, A is not liable to B because A’s breach was nullified by the tender of what he had received. Restatement 2d of Contracts § 385(b)