Contracts: Remedies Flashcards
Remedies
Breached the contract – what is the result?
Damages
Equitable Remedies
Quantum Meruit
Damages
monetary award to compensate an injured party for the loss caused by the other party’s breach of contract
Purpose of damages
place the injured party in the position they would have been in had the contract been performed
Concept of mitigation
- action by an aggrieved party to reduce the extent of its loss caused by the breach of the other party
- Requirement is reasonable mitigation – (buy similar products for the same price or cheaper means no damages)
Causation
damages must be casually connected to the breach of contract (but for test)
Special Circumstances
breaching party may not be held liable for additional damages arising from special circumstances, where the breaching party was not made aware of them
Test for Special Circumstances
from past experience and knowledge between the parties, and taking into account trade usages, should the parties have reasonably expected the loss at the time of the contract formation
Measurement of Damages
In most cases, you are entitles to expectation damages, consequential losses, and general damages
Expectation Damages
- expected profits under the contract at the time of the contract formation (positon you in the same place if the contract occurred)
- Opportunity cost: lost your chance of making a similar contract with a different promiser, so should be entitled to your profits
Consequential Loss
other reasonably foreseeable damages that flow from the breach (ex – shutting down business operations)
General Damages
damages that are not quantifiable (lost reputation, loss of goodwill)
Reliance Damages
damages for wasted effort
Liquidated Damages
an amount agreed to be paid in damages by a party to a contract if it should commit a breach.
Nominal Damages
where loss sustained is negligible
Problems in measuring damages
mental anguish
wrongful dismissal
loss enjoyment
Equitable Remedies
- courts of equity
- court orders other than money settelments
- Where damages are not sufficent
- Can order a party to perform the contract (specifc performance)
Discretionary
- Must come with “clean hands” – convince the courts you have not done anything wrong within the case (you have not breached the contract)
- Action must be brought within reasonable time
- No innocent 3rd party can be affected
- Consideration must be commensurate with promise
Specific Performance
- an order requiring a defendant to do a specific act; usually to complete a transaction
- Almost never granted in employment or personal service contracts
- Greek property case
Injunctions
- A court order restraining a party from acting in a particular manner
- Need for a negative covenant in the K
- Injunctions are rare in employment contracts
Quantum Merit
- the amount a person merits to be paid for goods or services provided to the person requesting them
- Is an exemption to the general rule that expectation damages are to apply
- Exemption occurs when there is a wrongful termination of the contract
Enforcing a judgement
what Is a judgement
a court order requiring one party to pay the damages, or perform as per an equitbale remedy
The parties
Judgment Creditor – owed money back
Judgment Debitor – person who owes money
Steps to seize assets of the JD
- Judgment must be registered with the court
- Writ must be filed with Sheriff’s office
- Execution order must be made to the Sheriff; and then
- The sheriff can levy execution – seizes and sells assets for the benefit of all execution creditors
- Some assets are exempt from seizures (pensions/ annuites)
Sheriff’s Office
- Must pay out all secured creditors first
- Takes a percentage of sheriff’s fees
- Difference remaining is paid pro rata amongst all of the execution creditors
Other processes:
Garnishment order (bank account/ wages/ AR)
Filed with Sheriff’s office, payments made to Sheriff, and sheriff distributes to execution creditors
