Chapter 18: Contract Remedies Flashcards
Compensatory damages
contract damages placing the injured party in a position as good as the one he would have held had the other party
performed; equals loss of value minus loss avoided by injured party plus incidental damages plus consequential
damages
Loss of value
Value of promised performance minus value of actual performance
Cost avoided
Loss or costs the injured party avoids by not having to perform
Incidental damages
Damages arising directly out of breach of contract
Consequential damages
Damages not arising directly out of a breach but as a foreseeable result of the breach.
Reliance damages
Contract damages placing the injured party in as good a position as he would have been in had the contract not been made.
Nominal damages
A small sum awarded when a contract has been breached but the loss is negligible or unproved
Punitive damages
Are generally not recoverable for breach of contract
Liquidated damages
Reasonable damages agreed to in advance by the parties to a contract
Foreseeable damages
Loss that the party in breach had reason to anticipate when the contract was made.
Certainty of damages
Damages are not recoverable beyond an amount that can be established with reasonable certainty
Mitigation of damages
The injured party may not recover damages for loss he could have avoided by reasonable effort.
Reformation
Equitable remedy correcting a written contract to conform with the original intent of the contracting parties.
Specific performance
Court decree ordering a breaching party to render promised performance
Injunction
Court order prohibiting a party from doing a specific act.
Restitution
Restoration of the injured party to the position he was in before the contract was made.
Party injured by breach
May recover in restitution if the other party totally breaches the contract by non-performance or repudiation.
Party in default
May recover in restitution any benefit conferred in excess of the loss caused by that party’s breach.
Statute of frauds
When a contract is unenforceable because of the statute of frauds, a party may recover in restitution the benefits conferred on the other party and performance of the contract.
Voidable contracts
A party who has rightfully avoided a contract is entitled to restitution for any benefit conferred on the other party but generally must return any benefit that he has received under the contract.
Election of remedies
If remedies are not inconsistent, a party injured by a breach of contract may seek more than one remedy.
Loss of power of avoidance
a party with the power to avoid a contract may lose that power by (1) affirming
the contract, (2) delaying unreasonably in exercising the power of avoidance, or
(3) being subordinated to the intervening rights of third parties
Out-of-pocket damages
Difference between the value received and the value given.
Benefit of the bargain damages
Difference between the value received and the value of the fraudulent party’s performance as represented.
