Contracts _ Remedies

Question 1

Legal Remedy:

LEGAL REMEDIES

Answer 1

Money damages

Question 2

Expectation Damages

LEGAL REMEDIES

Answer 2

• Put plaintiff in position if K had been performed
• “Foreseeable with reasonable certainty”

Question 3

Formula - Expectation Damages

LEGAL REMEDIES

Answer 3

• (K price) – (Money received/saved) + (Costs)

Question 4

Reliance Damages

LEGAL REMEDIES

Answer 4

• Put plaintiff in position he would have been prior to K
• Unreimbursed costs
  * NO Expectation Damages

Example:
o Jon was going to teach out in California, and now he has unreimbursed costs because he relied on you telling him to come out to California on June 1 to teach a class

Question 5

Restitution

LEGAL REMEDIES

Answer 5

• Getting back any value you already gave
• Contract PARTIALLY performed
• Measured by market value of the services

Question 6

Consequential Damages

LEGAL REMEDIES

Answer 6

• Foreseeable costs because of breach

Example:
o You don’t buy Jon’s house, now he has to pay to put it back on the market

Question 7

Liquidated Damages:

LEGAL REMEDIES

Answer 7

• Determined at time of contract
• Enforced if reasonable
• Not a penalty

Question 8

Quantum Meruit

LEGAL REMEDIES

Answer 8

The Breaching Party can recover:
* (Reasonable value of services) – (Damages incurred)

Question 9

UCC Seller Damages: (3+1)

LEGAL REMEDIES

Answer 9

If Buyer breaches, Seller can recover:
* Goods Delivered & Accepted = (K price)
* Some/None goods Delivered = (K price) – (Market price)
* Goods Resold = (K price) – (Resale price)
* Additionally, Incidental Damages

Question 10

Lost Volume Seller:

LEGAL REMEDIES

Answer 10

• Seller can sell as many widgets as possible

Question 11

Lost Profits

LEGAL REMEDIES

Answer 11

• (Expected profit) + (Costs) – (Payment for resale)

Question 12

UCC Buyer Damages: (3)

LEGAL REMEDIES

Answer 12

If the Seller breaches, Buyer can recover:
* Purchased replacement goods = (K price) – (Cost of new goods)
* NO replacement goods = (K price) – (Market price at time of breach)
* (Incidental/Consequential Damages) – (Expenses saved)

Question 13

Equitable Remedies

EQUITABLE REMEDIES

Answer 13

Recoverable when remedy at law is inadequate

Question 14

Specific Performance

EQUITABLE REMEDIES

Answer 14

• Court will make a party perform
• For UNIQUE items (ex: LAND)

Question 15

Injunction

EQUITABLE REMEDIES

Answer 15

• To “prevent irreparable harm”
• Employment contracts
• Trade secrets
• Proprietary information

o You work at McDonald’s, and you are going to
move to Burger King and talk about the secret sauce

Question 16

Rescission

EQUITABLE REMEDIES

Answer 16

• No meeting of the minds
• Mistake
• Misrepresentation
• Duress
• Lack of capacity

Question 17

Restitution

Legal Restitutionary Remedies

Answer 17

Restitution is designed ot prevent the defendant’s unjust enrichment. Generally, the measure of damages si the value of the benefit received by the breaching party.
Restitutionary damages are favored when the actual value of the services provided are higher than the contract price.

Question 18

Replevin

Legal Restitutionary Remedies

Answer 18

A plaintiff may use replevin ot regain personal property when there is a specific piece of property that the defendant wrongfuly took from the plaintiff and the plaintiff has the right of possession. However, the item recoverable in a contract action is the item in the contract.

Question 19

Reformation

Equitable Remedy

Answer 19

Reformation is an equitable remedy where a court modifies a written instrument to conform to the parties’ previous understanding or agreement. There must be:
(1) a valid prior agreement between the parties;
(2) that fails to conform to the valid prior agreement;
(3) as a result of mistake or fraud; and
(4) both parties believed at the time they executed the contract that the contract reflected their underlying agreement.