Contract Remedies Part 3 - Nonmonetary Damages

Question 1

Specific Performance

Answer 1

Sometimes money won’t make the plaintiff whole. No amount of money will fix the problem. In those cases, court might order breacher to do what the K says. Courts give it reluctantly.

P must show:
1) Legal remedy inadequate (no money would make me whole)
2) Not unduly burdensome to courts (courts won’t find it too difficult to order the specific performance decree)
3) Terms must be certain and definite

3 Scenarios commonly featuring specific performance:
1) LAND sales. The theory is that all land is unique. Money will not allow buyer to buy “this” piece of land. Only “this” piece of land is that land. Enforcement of such a K is one and done. Transfer land to buyer and no babysitting by court. Specific performance is available.
2) Sale of UNIQUE GOODS. Generally, specific performance is not available for breach of a K for ORDINARY goods. Widgets are interchangeable. But UNIQUE goods are not fungible. So it’s worthy of an equitable remedy. Some antique painting deserves specific performance. Money not adequate to compensate you. Goods that are rare or unique are the only kind where specific performance awarded.
3) SENTIMENTAL VALUE. This can earn specific performance.

Services CANNOT get specific performance. Violates 13th A prohibition against involuntary servitude. But, courts may still enjoin a breaching employee from working for a competitor, usually if services are rare or unique. Typically breach of services involves monetary damages only.

Question 2

Reformation

Answer 2

This is a remedy when a written K doesn’t adequately reflect the K the parties agreed to. So the court changes the K to match what they actually agreed to.

Requirements for Reformation:
1) Oral agreement
2) Written memo of agreement
3) Mistake in the writing

Example: buyer and seller agree to sale of house and agree to assume the seller’s mortgage. Parties can get reformation. That’s what they thought the K would say but inadvertently omitted. Reformation is available.

Fraudulent misrepresentation as to what is in the K commonly seen with reformation: maybe buyer tells seller the writing provides that buyer will take on the mortgage, even though buyer knows the mortgage assumption provision isn’t there. Seller may sign without knowing there is no provision.

Reformation is thus available for mistake and fraudulent misrepresentation.

Question 3

Restitution

Answer 3

Separate area from K law.

Often applied to Ks when K remedy is not available.

Goal: prevent D’s unjust enrichment. No longer looking at what P lost, but what D’s windfall would be. Prevent wrongful gain by D.

Restitution can also work when there is no K between parties. The term “quasi-contract” applies.

Question 4

Quasi-Contract

Answer 4

1. P conferred benefit on D
2. P had reasonable expectation of being compensated.
3. D had reason to know of the expectation; and
4. D would be unjustly enriched if he were allowed to keep the benefit without paying for it.

Example: unconscious patient treated by doctor. Patient must still pay, #3 is assumed