class 18 Flashcards
Specific performance
equitable remedy
injunction by which a court orders a party to comply with the terms of a valid K.
SP Checklist 1-7
- Breach of a valid contract (offer, acceptance, consideration, contract defenses)
- inadequate legal remedy (unique item, difficult to calculate, liquidate damages clause, real property presumption, personal property presumption
- definite and certain terms (parties, property, price and timing)
- P complied with conditions precedent (both parties have some type of obligation under the K, P needs to have already done their part)
- mutuality of performance (Court has the ability to make both sides perform)
- enforcement is feasible (if its a one time thing- the court is more likely to grant over an ongoing thing- not usually personal services- no one wants to be forced to do something- athlete doesn’t want to play anymore- the court won’t make athlete play well)
- enforcement is equitable/ no available affirmative defenses (focus on fairness and/or laches, unclean hands, undue hardships/sharp practices- one party is really pushing the boundaries as to what is ethical practices between the parties)
Contracts defenses
error in formation, lack of capacity, mistake, junconsciounability, misrepresentation, fraud, statute of frauds
S/F
must be writing signed by the party to be charged if-
real property, not performable within a year, goods over 500, marriage, collateral contract
exceptions: part performance, promissory estoppel
J contracts with D to use 500 sqft. of his car dealership as a store to sell her bumperstickers. The bumper sticker is her sole source of income. she has no other location to sell them and the building she was using has been torn down. D breaches the contract and rents the space to another vendor that has already moved in. j will soon go out of business. J asks for specific performance
no definite and certain terms
argument that this is real property and is unique- she is renting it and that usually doesn’t apply but there are no alternative available.
no condition precedent present- maybe would be paying the rent or just signing the contract
mutuality of performance- sure
feasible enforcement- maybe- needs to let her move in but its ongoing. easy to supervise J has to pay and D has to give her access during this time.
fairness- kicks out other vendor (3rd party harm) court does not need to guarantee a healthy or good working environment
a chicken farmer contacts with an egg distributor to sell the eggs. the K requires the distributor to use best efforts to market and sell all eggs produced by the farmer. The term of the K is for 5 years. after 1 year, having received a more lucrative offer from another egg producer, the distributor breaches the K. farmer wants SP
valid K
difficult to calculate- can’t estimate how many eggs will be produced and how many eggs will be sold- could have an estimate but doesn’t account for all outcomes
dont know the price- do we know enough for the court to say this is definite and certain? needs to be enough for the court to know what to do
P supplied eggs to be sold
court can tell the P to do something and the D to do something
Is enforcement feasible- what does “best efforts” mean- all contracts have an unspoken presumption that the parties will try their best. this is not based on achievement goals which makes it easier to enforce especially since they have 1 year of performance on this k.
fairness- can the farmer get another deal
P & S bar question
issues in 1, 3 and 7
1. fraud and misrepresentation problems, statues of fraud’s problem- is there full performance, estoppel
can you use the writing on the check to support terms of the contract?
3. is the check enough to create the terms of the contact
7. unclean hands?
UCC
governs the sale of good only
purpose of UCC expectation damages
parties expect to get the benefit of the bargain. expectation damages put them in the post contract position (benefit of the bargain). goal is to encourage future contracts
cover
only refers (in this contact) to BUYER damages; means the buyer buts a substitute product. this must be done in good faith, with no unreasonable delay, and as a reasonable purchase. buyer should do this if they have the reasonable ability to do so.
perfect tender rule
the buyers damages are subject to mitigation if they can reasonably mitigate their losses.
however, a buyer does not have to accept a product that they have to repair/refabricate
sellers have to sell/tender what the buyers contracted for.
it is not the buyers problem to make the product correct.
incidental contract damages
damages that are related to the product that is the subject of the contract.
ex: finding cover, storing cover, advertising, research
consequential contract damages
damages that are because of the breach that do not relate to the subject of the contract and within the contemplation of the parties at the time of the contract.
caused- certain- contemplated- subject to mitigation.
UCC buyers damages
- goods
- buyer
- delivered or not delivered
2-711
non-delivered or rejected goods
gets price paid (lawsuit can stop here)
PLUS
2 options:
1. cover (2-712)
incidental/consequential (2-715)
MINUS
any expenses saved because of the breach.
OR
2. No Cover
Market price for breach MINUS contract price = benefit of the bargain
PLUS
incidental
Consequential IF non reasonable mitigation by cover
MINUS any expenses saved because of the breach
2-714
delivered/ accepted goods
as promised contract price minus as delivered or cost of repair
incidental/ consequential
Buyer entered into a K with seller to purchase A quality stainless steel rods for 100k. buyer put down a 10k deposit at the time of the signing. seller delivered B quality rods. Buyer could have had the rods altered to make them identical to A quality for 5k. buyer rejected the delivery and bought a substitute product for 120k. it incurred 1k in charges attempting to find the new rods. what remedy for buyer?
perfect tender rule- no requirement that the buyer accept the goods.
gets deposit back- 10k
plus difference between contract and cover- 20k
plus incidental
31k total.
same facts but the buyer did not purchase substitute. although they were available, and lost 50k in profits on the construction project project for which it intended to use the rods. what remedy
market price- contract - cover
50k is consequential damages and they do not get it if they do not cover.
buyer purchased genuine cherry wood cabinets from seller for 20k which included the product and installation in buyers jewelry store. seller warranted the quality of the cabinets and installation for 3 years. after 6 months the varnish began to bubble and peel. what remedy
cost of repair
Perry deals in rare books. client tells P he will pay 2.5k for a book- well over the books market value of 1k. P finds a wholesaler to get the book. P agrees to pay the wholesaler 8oo. wholesaler breaches after P pays. no other copies of the book are available. P sues the wholesaler
ucc applies because a book is a good.
no cover because not possible
P gets his 800 back because its price paid
market price is 1k
contract price is 800
market price - contract price is 200 (he gets this because its the benefit of his bargain)
consequential is the 1.7k (2.5k - 800)
in a no cover situation usually there is no consequential but he could not mitigate- it was not a choice. on the table- still has to meet the consequential damages test
UCC seller damages
- goods
- seller
- goods accepted or not accepted
no consequential damages!!
seller damages- goods accepted
contract price 709
incidentals
seller damages- good not accepted and reasonable resale
2 options:
1. reasonable resale
contract price minus resale price and incidentals
or
2. lost volume seller, lost profit (contract price - overhead) and incidentals
seller damages- goods not accepted and no reasonable resale
2 options:
1. market exists for resale
contract price - market price and incidentals
OR
- no market- resale is not reasonable
contract price - proceeds of salvage, if any, and incidentals
lost volume seller
seller who could have made another sale to a buyer even if the first buy had not breached the contract.
sellers supply must be large enough that they could have had the benefit of both the lost sale and a second sale if there had been no breach.
the lost volume seller would have had the profit from 2 sales if the first buyer had performed, instead of the profit from only one sale as a result of the first buyers breach.
a lost volume seller can recover the lost profit on the sale to the breaching buyer.
lost volumer seller cont.
ordinarily, a seller whose buyer breaches a contract and refuses to purchase the goods can recover from the breaching buyer the difference between the contract price and the price for which the seller ultimately sells the goods to another buyer.
in the case of a lost volume seller, the seller goes on to sell the goods to someone else but they lose out on the sale to that person.
to identify a lost volume seller
will say they are a high volume seller- dont think about this logically
