Compensatory Damages

Question 1

AKA?

Answer 1

general damages

Question 2

What do general damages do?

Answer 2

Compensate the plaintif or hamr suffered

Question 3

Expectancy

Answer 3

value of plaintiff’s entitlement under contract

Question 4

Reliance

Answer 4

out of pocket cost

Question 5

Restitution

Answer 5

expenditures that benefit the defendant

Question 6

General rule (torts)

Answer 6

restore to position would be but-for the harm.

Question 7

Nonconforming goods

Answer 7

entitled to difference of market – goods received – expenses + incidentals + consequential?

Question 8

• General rule (torts)

Answer 8

restore to position would be but-for the harm.

Question 9

• Chatlos

Answer 9

(Good example of extreme result/contract case)
o The goods are delivered and accepted, but are not as warranted. Plaintiff can recover the difference between the value of the goods as delivered and the value of the goods if they had been as warranted, §2-714(2), plus any incidental or consequential damages under S2-715.

Question 10

• Smith (tort case)

Answer 10

o Out-of-Pocket rule (federal courts follow): damages are calculated as the difference between the actual—fraud-tainted—transaction price and the true value of the security measured on the date of the transaction.

Question 11

Starting rule?

Answer 11

non-breaching party restored to rightful position.

Question 12

What are consequential damages?

Answer 12

lost profits. Losses resulting from naturally & proximately (Buck v. Morrow) from breach and, contemplated by parties (Hadley v. Baxendale).

Question 13

Basic contract…get what?

Answer 13

– general & consequential, unless exception (but if you have intentional tort you can get consquentials - Texaco)

Question 14

Consequential damages

Answer 14

losses resulting naturally and proximately from the breach (Buck v. Morrow) & contemplated by the parties (Hadley v. Baxendale)

Question 15

exception to consequentials from Meinrath

Answer 15

($ due not paid) Interest (period of time b/w breach & judgment)
For payment withheld although due (repayment) interest

Question 16

Exception to Exception

Answer 16

allows damages where sufficiently foreseeable (foreseeable evidence?)
- loan commitments
- cases awarding actual interest paid
- bank refusal to pay deposited funds
- Bad faith claims (all the time)

Question 17

• CRE v. Comcast

Answer 17

Restatement Second Majority Test: Damages for breach by either party may be liquidated in the agreement but only at an amount that is reasonable in the light of the anticipated or actual loss caused by the breach and the difficulties of proof of loss. A term fixing unreasonably large liquidated damages is unenforceable on grounds of public policy as a penalty.
o UCC (adds a factor – inability to find adequate remedy) The USS is only for the sale of goods.
 Damages for breach by either party may be liquidated in the agreement but only at an amount which is reasonable in the light of the anticipated or actual harm caused by the breach, the difficulties of proof of loss and the inconvenience or nonfeasibility of otherwise obtaining an adequate remedy. A term fixing unreasonably large liquidated damages is void as a penalty.

Question 18

• SJ Groves & Sons Co. v. Warner –

Answer 18

o Avoidable consequences doctrine (general principal) – if buyer acting in good faith and in reasonable manner plaintiff has a duty to mitigate damages
 Immaterial is that the choice was not the cheapest, instead the question is whether the plaintiff acted in good faith and in a reasonable manner.
 Breaching party bears the risk of uncertainty.

failure to make deliveries of concrete

Question 19

• Oden

Answer 19

o Collateral source rule – under traditional common law principles, a personal injury award may not be reduced or offset by the amount of any compensation that the injured person may receive from a source other than the tortfeasor.
 Now, depends on the details of each state’s statute .
* Modified by statute in most jurisdictions and they vary.
o Some states say subrogation is something considered.
o Some jurisdictions have the “make whole” rule – if plaintiff is not made whole, neither will subrogation right 3rd party (usually insurance).
Scope of Liability & Requirement of Reasonable Certainty (81-96) (101-109)

Question 20

• Pruitt

Answer 20

Kepone case.(Common law in tort) Economic loss rule doctrine – if no physical damage to person or property cannot recover. This case modified the common law rule.
o Some sort of injury to person or property.
 Exceptions: Wildlife, especially seafood, may be of enormous economic importance, yet nobody owns it until it is harvested.
* Constructive property interest (ex. Fisherman have interest in fish)
* Statutory remedies (oil spill act) (ex. Cut off liability at water’s edge)

Question 21

• Sunnyland Farms (significant impact on limiting damages

Answer 21

o Takeaway – possibility of seeking recovery in tort (building) and in contract (loss of crop).
o In contract consequential damages must be objectively foreseeable.
 Objective test: a defendant is liable for losses that were foreseeable at the time of contracting, regardless of whether the defendant actually contemplated or foresaw the loss. (Restatement Second).
* The loss must have been foreseeable as the probable result of a breach, not merely as a possibility.
 Must be special circumstances that they would have specifically foreseen this harm.

Question 22

• Bigelow

Answer 22

plaintiff must prove damages with as must certainty as reasonably possible. Wrongdoers bear the risk of uncertainty.
o The going concern method: (value before wrong and then after).
o The lost profits method: (comparison before and after).
o Experts must offer more than speculation – limited by reasonable certainty.

Question 23

How to limit economic damages

Answer 23

-Defendant owed no duty limitation
-eggshell skulls
-directness test

Question 24

Liquidated Damages Majority rule (Restatement Second)

Answer 24

liquidated damages clause is enforceable if the amount is reasonable either in light of the damages actually suffered or in light of the damages anticipated at the time of contracting.

Question 25

Liquidated damages UCC

Answer 25

one more factor, inability to find adequate remedy. (Only or sale of goods).

Question 26

avoidable consequences doctrine

Answer 26

gen, duty to mitigate

Question 27

Collateral Source Rule

Answer 27

Depends on the details of each state’s statute.
Policy - prevents plaintiff from being awarded 2x.

Question 28

Common Law collateral source rule

Answer 28

personal injury award may not be reduced or offset by the amount of any compensation that the injured person may receive from a source other than the tortfeasor. (Oden). (offsetting benefits. Limiting damages).

Question 28

Economic Loss rule

Answer 28

If no physical damage to person or property, cannot recover. Pruitt.

Question 29

Exceptions to the economic loss rule?

Answer 29

Constructive property interest (fisherman Kepone case having interest in fish), statutory remedies (oil spill act)

Question 30

In contract, consequential damages must be?

Answer 30

Objectively forseeable

Question 31

Objective foreseeability test

Answer 31

A defendant is liable for losses that were forseeable at the time of contracting, regardless of whether the defendnat actually contemplated or foresaw the loss.
- more stringent than proximate cause
must have been foreseeable as the probable result of breach, not merely as a possibility.
The restatement asked for special circumstances, beyod the ordinary course of events.

Question 32

In contract?

Answer 32

The defendant is liable only for those consequential damages that were objectively forseeable as a probable result of his or her breach when the contract was made. Sunnyland.

Question 33

What is the leading federal case on uncertain damages?

Answer 33

Bigelow v. RKO

Question 34

Bigelo v Rko

Answer 34

Plaintiff must prove damages with as much certainty as reasonably possible. Worngdoers bear the risk of uncertainty.

Question 35

Going concern method/lost profits method

Answer 35

(Bigelow) Comparison before and after/look at lost proits

Question 36

Going concern method

Answer 36

value before wrong and then after ‘

Question 37

What must experts ocer?

Answer 37

More than speculation. Limited by reasonable certainty.

Question 38

Category of damages unable to assess

Answer 38

noneconomic/loss of enjoyment, pain & suffering

Question 39

Debus

Answer 39

Per diam argument, guardrails are in place.

Question 40

Pre-judgment interest

Answer 40

from time of injury - usually to the point of which judgment made.

Question 41

Post-Judgment Interest