Contract Remedies Flashcards
What are the two parts of contract remedies?
1) Damages ($)
2) Equity (Action/Inaction)
What are the four types of damages?
1) Expectation
2) Reliance
3) Restitution
4) Liquidated Damages
What are the four Doctrines of damages?
1) Foreseeable
2) Mitigation
3) Reasonable Certainty (no speculation)
4) No punitive damages allowed
What are the 4 types of Equity?
1) Specific Performance
2) Injunction
3) Rescission
4) Reformation
Rest. 344: Purposes of Remedies
Judicial remedies under the rules serve to protect one or more of the following interests of a promissee:
(a) his “expectation interest,” which is his interest in having the benefit of his bargain by being put in as good a position as he would have been in had the contract been performance,
(b) his “reliance interest,” which is his interest in being reimbursed for loss caused by reliance on the contract by being put in as good a position as he would have been had the contract not been made, or
(c) his “restitution interests,” which is his interest in having restored to him any benefit that he has conferred on the other party.
Restatement 345: Judicial Remedies
The judicial remedies available for the protection of the interests include a judgement or order
(a) awarding a sum of money due under the contract as damages,
(b) requiring specific performance of a contract or enjoining its non-performance,
(c) requiring restoration of a specific thing to prevent unjust enrichement
(d) awarding a sum of money to prevent unjust enrichment
(e) declaring the rights of the parties, and
(f) enforcing an arbitration award.
Rest 347: How to determine damages
The injured party has a right to damages based on his expectation interest as measured by
(a) the loss in the value to him of the other parties performance caused by its failure or deficiency, plus
(b) any other loss, including incidental or consequential loss, caused by the breach, less
(c) any cost or other loss that he has avoided by not having to perform.
Rest. 349: Damages based on Reliance Interest
As an alternative to the measure of damages in 347, the injured party has a right to damages based on his reliance interest, including expenditures made in preparation for performance or in performance, less any loss that the party in breach can prove with reasonable certainty the injured party would have suffered had the contract been performed.
Rest 370: Requirement that Benefit Be Conferred
A party is entitled to restitution only to the extent that he has conferred a benefit on the other party by way of part performance or reliance.
Rest 371: Measure of Restitution Interest
If a sum of money is awarded to protect a parties restitution interest, it may as justice requires be measured by either:
(a) the reasonable value to the other party of what he received in terms of what it would have cost him to obtain it from a person in the claimants position,
(b) the extent to which the other parties property has been increased in value or his other interests advanced.
What happens when damages are extremely difficult to quantify and the court has to decide who to give the benefit of the doubt to?
When the damages are extremely difficult to quantify “it is not error to lay the normal uncertainty in such hypotheses at the door of the wrongdoer who altered the proper course of events, instead of at the door of the injured party.”
What is the starting point for damages?
The starting point is always expectation interests.
Can damages be speculative?
No, they cannot be speculative. Damages must be reasonably certain.
What is the efficient breach?
“A promisor will exercise an option to breach and pay expectation damages instead of performing when it is in her economic interest to do so. That is, she will breach when her gain from breaching exceeds the amount of damages she will have to pay to leave the promisee just as well off as he would have been had the promisor performed. In principle, then, breaches of this sort make promisors better off without making promisees worse off.”
Can punitive damages be given in contract cases?
No, they cannot. Under Rest. 355 punitive damages are not recoverable for a breach of contract unless the conduct constituting the breach is also a tort which punitive damages can be given.
