Contract remedies (chap 8) Flashcards
Court-Ordered Remedies: Specific Performance
It refers to an order to comply with the terms of a contract so that transactions for mutual gains can be completed.
why specific performance remedies are believed to be an equitable remedy and efficient? (list)
- it captures the intentions/markets valuations of the parties who made the agreement
- It offers the potential of fewer lawsuits
- it eliminates the cost of estimating damages
- it preserves the rational parties’ own valuations
- it offers the opportunity for parties to engage in Coasean bargaining to increase social welfare even in cases of opportunistic breach
If specific performance leads to efficiency,
why not employ it universality in breach of contract cases?
Because of transaction cost, it can redduce the net benefit.
some believes that should be used more continuous with exception of cases where transaction cost are high
Court-Ordered Remedies: Monetary Damages
- it is the most common to solve breach of contract.
- The remedy aim to to put the injured party in the same position they would enjoy if the term of disputed contract was completed
what is efficient breach ?
It is a voluntary breach of contract and payment of damages by a party who concludes that they would incur greater economic loss by performing under the contract.
definitions of the type of damages for contract breach:
Expectation damages
- It is the most obvious form of damages when a contract is breached
- are damages recoverable from a breach of contract by the non-breaching party
What are nominal damages?
they are damages awarded when the promisee has been wronged but the damages are negligible.
or when the damages suffered were not established
because of zise the plaintiff may be recluctant to file becauses of the transaction cost. (court cost).
what is reliance damages?
it refer to the cost a plaintiff incurs as a result of relying on a broken promise.
why not reliance damages is included with expectation damages?
because of it is not efficient, since the expected earnings from peformce would have had cost of the plaintiff’s own performance attached.
definitions of the type of damages for contract breach:
restitution
concerns actions in which one person claims an entitlement in respect of a gain acquired by another, rather than compensation for a loss.
a remedy for unjust enrichment
definitions of the type of damages for contract breach:
Liquidated damages
they are an amount agreed upon by the parties in contractual relations to be paid in the event of a breach.
The court may deem liquidation damages that are unusual high, unfair deal or unconscionable.
The existence of liquidation damages may confer benefits for which there were no cost and they may potentially cause one party to breach
types of damages for contract breach: Remedies
Liquidated damages
restitution
reliance damages
Expectation damages
