Contracts Flashcards
Rst. § 344
Remedies serve to protect one of the following interests: expectation interest, reliance interest, restitution interest
Rst. § 347
Expectation interest = Loss in Value (A) + Incidental/Consequential Loss (B) - Costs/Loss Avoided (C)
Comment (C) cover for service contract
Rst. § 355
Punitive damages are not recoverable.
UCC § 2-706
Seller’s Resale = (K-Resale) + incidental damages - cost/loss avoided
UCC § 2-708 (1)
Seller’s Damages for Non-acceptance or Repudiation = (Market Price - K) + Incidental/Consequential Loss (B) - Costs/Loss Avoided (C)
UCC § 2-708 (2)
Seller’s Damages for Non-acceptance or Repudiation = If the MP-K is insufficient due to the status as a loss volume seller, the measure of damages is the profit the seller would have made by full performance + reasonable overhead (K-COGS)
UCC § 2-712
Buyer’s Cover = A buyer may cover by making a good faith effort without reasonable delay. Cover must be reasonable and substantially similar goods. Costs incurred affecting cover will also be recoverable. Failure to cover, does not bar a buyer from another remedy. The equation is (Cover-K) + B - C
§347 Comment (C)
UCC § 2-713
Buyer’s Damages for Non-delivery or Repudiation = (MP at time of breach - K) + B - C
UCC § 2-718
Liquidated Damages = Must be reasonable in light of anticipated or actual harm, difficulties of proof of loss, and inconvenience or non feasibility of obtaining an adequate remedy. A term fixing unreasonably large liquidated damages as void as a penalty.
UCC § 1-305
Remedies must be liberally administered to the end that the aggrieved party is in as good a position as if the other party had fully performed.
Rst. § 348
Breaches relating to use of property offer two options for remedy:
- Diminution in Value = Value of property if there was no breach - value of property as it is currently.
- Reasonable Expense of Completion = Cost of work left to complete K
Expectation Interest
Having the benefit of his bargain by being put in as good a position as he would have been in had the contract been performed,
Reliance Interest
Being reimbursed for loss caused by reliance on the contract by being put in as good a position as he would have been in had the contract not been made. Status quo ante.
Restitution Interest
Having restored to him any benefit that he has conferred on the other party. Used to prevent unjust enrichment.
Rst. § 350
Damages are not recoverable for loss that the injured party could have avoided without undue risk, burden or humiliation. A party may recover costs incurred while attempting to mitigate, whether or not they are successful.
CISG 74
Appropriate damages are a sum equal to the loss, including loss of profit. Damages may not exceed the loss which the party in breach foresaw or ought to have foreseen as a possible consequence of the breach of contract.
CISG 75
Buyer/Seller Cover (Cover Price - K)
CISG 76
Damages for no-resale or cover (Market Price - K)
CISG 77
An injured party must take reasonable measures to mitigate.
Rst. § 351
Damages are not recoverable for loss that the breaching party did not have reason to foresee as a PROBABLE result of the breach when the contract was made. Loss is foreseeable if it follows in the ordinary course of events or if the special circumstances have been communicated to the breaching party.
Rst. § 352
Damages are not recoverable for loss beyond an amount that the evidence permits to be established with reasonable certainty. (A reasonable certainty does not require absolute certainty, it just needs to be reasonable). Certainty pertains to the amount and could be based off an open ended contract or unclear pricing or too many factors to consider for certainty to be possible. Uncertainty should be be decided in favor of the injured party.
Rst. § 356
Liquidated damages must be reasonable in light of anticipated or actual loss and the difficulty of proving loss. Unreasonably large damages are unenforceable. Liquidated damages cannot function as penalties.
UCC § 2-704 (2)
seller may in the exercise of reasonable commercial judgment to avoid loss by completing the goods, halting and selling for scrap, or proceed in any other reasonable manner.
UCC § 2-716
Buyer may be awarded specific performance if the goods are unique or in other proper circumstances or if they buyer has already paid.
§ 357-369
Specific Performance is available where monetary damages are inadequate or in other proper circumstances. Considerations: difficulty of proving damages w/ reasonable certainty, difficulty of finding a suitable substitute, likelihood that a monetary damage wouldn’t be collected. If you need a time machine, then you won’t get specific performance.
UCC § 2-709
Seller may be granted specific performance (payment) where the goods have already been delivered or the value of the goods is zero (can’t resell it, no one wants it)
Value in a Contract
A contract has value only if the increase in value outweighs the cost. A winning contract will have a value higher than what the market value. You’re getting more than you’re giving (buyer will pay less and get more, seller will get more for something worth less)
