Contract law Flashcards
Expectation Damages
The normal measure of damages for breach of contract is expectation damages, which aim to give the non-breaching party the benefit of his bargain. Expectation damages must be foreseeable and proved with reasonable certainty.
Put the nonbreaching party in the position they would have been in if the contract had been properly performed. Measured by the benefit of the bargain
Punitive Damages in Contract Law
Punitive damages are not generally recoverable as an element of damages in a breach of contract action “unless the conduct constituting the breach is also a tort for which punitive damages [can be recovered.
Written Adequate Assurances
Contract parties are entitled to expect due performance of contractual obligations and are permitted to take steps to protect that expectation. UCC § 2-609 states that “[w]hen reasonable grounds for insecurity arise with respect to the performance of either party, the other may in writing demand adequate assurance of due performance. If the other party doesn’t provide those assurances within a reasonable amount of time (not to exceed 30 days) than the other party has repudiated the contract.
Retraction of Repudiation
A party that repudiates a contract is free to retract that repudiation so long as the other party has not canceled the contract or materially changed his position or indicated by communication or action that the non-repudiating party considered the repudiation to be final.
Consideration
Bargain for exchange for a return promise or performance.
Unanticipated Changed Circumstances
An exception to the preexisting duty rule for common law governed contracts that a promise modifying a duty under a contract not fully performed
on either side is binding even if not supported by consideration, if the modification is fair and
equitable in view of circumstances not anticipated by the parties when the contract was made.
Defense of Duress in Contracts
A contract is voidable on the ground of economic duress by threat when it is established
that a party’s manifestation of assent is induced by an improper threat that leaves the party no
reasonable alternative. See RESTATEMENT (SECOND) OF CONTRACTS § 175. See also, e.g., Austin
Instrument Inc. v. Loral Corp., 272 N.E.2d 533 (N.Y. 1971) (a threat to withhold essential goods
can constitute duress). In order to void its agreement to pay the additional sum because of
economic duress, the conservatory must demonstrate that (1) the business made a threat to the
conservatory, (2) the threat was “improper” or “wrongful,” (3) the threat induced the
conservatory’s manifestation of assent to the modification, and (4) the threat was sufficiently
grave to justify the conservatory’s assent
Mere threat to breach a contract is not in of itself sufficient to support a finding of economic duress or business compulsion
Requirements Contract
Contract for all the goods that one party produces, or for all the goods that one party requires.
Termination of an Offer
terminate by lapse of reasonable time, express words
or conduct of the offeror, express words or conduct of the offeree, or if the offeree learns that the offer is no longer capable of being accepted. Offers are freely revocable by the offeror unless they are options, which are offers that an offeror keeps open in exchange for
consideration from the offeree, usually the payment of money. If an option is not supported by consideration, it is a freely revocable offer
Merchant’s Firm Offer
if a merchant makes an offer and signs a writing promising to keep the offer open, he must keep that offer open for acceptance notwithstanding the lack of any consideration. The offer is not revocable for the period indicated in the writing, or if no
period is indicated, for three months. A merchant is any person routinely engaged in buying or selling goods commercially.
Consequential Damages/Lost Profit
Lost profits damages can constitute a kind of consequential damages– damages resulting from a party’s particular circumstances–and in such a case can be only awarded if either (i) the damages were reasonably foreseeable; or (ii) the breaching party
knew that such damages would result.
Duty to Mitigate
Generally, nonbreaching parties are under a duty to mitigate damages under the common law–they must not increase damages, and they also must obtain reasonable substitute performance if possible. However, where the substitute performance is not of the same kind or quality as the original performance, the nonbreaching party may not be under a duty to mitigate
