Contracts-Remedies

Question 1

Legal vs Equitable Remedy

Answer 1

Legal = $ damages (default = expectation damages, see later cards)
Equitable = when remedy at law is inadequate; e.g.,
(1) specific performance (when item in K is unique)
(2) injunction (prevent irreparable harm)
(3) rescission (no meeting of the minds b/c mistake, misrepresentation, duress, or lack of capacity)

Question 2

Expectation Damages

Answer 2

Put P in position if K had been performed (usually K price - benefit already received + cost)
If foreseeable w/ a reasonable certainty

Question 3

Reliance Damages

Answer 3

Put P in a position prior to K (i.e., make them whole); incl. unreimbursed costs
When can’t get expectation damages b/c too speculative/uncertain

Question 4

Restitution Damages

Answer 4

When K is partially performed & P getting back the value/benefits already provided to D (so that D is not unjustly enriched)
Measured by FMV of the benefits/services
At the option of non-breaching party (instead of expectation damages)

Question 5

Consequential Damages

Answer 5

As a result of the breach, foreseeable losses have occurred (e.g., additional costs incurred by breach)
Incidental Damages: out-of-pocket expenses incurred

Question 6

Liquidated Damages

Answer 6

Damages pre-determined/specified at time of K (b/c too speculative/uncertain)
Liquidated damages clause usually enforceable if: (1) reasonable AND (2) not a penalty*
*Generally 10% or less of value of K = OK/not a penalty

Question 7

Quantum Meruit

Answer 7

Allows a breaching party who partially performed to recover: (reasonable value of services minus damages caused by their breach)

Question 8

Money Damages under the UCC; Seller and Buyer Remedies

Answer 8

Seller’s Damages:
(1) If goods have been delivered & accepted = seller gets K price
(2) If some or none delivered & are not resold = K price - market price
(3) If some or none delivered but are resold = K price - resale price
Additionally, seller may recover incidental damages related to reselling the goods
Lost profits: seller = lost volume seller (can sell as many as possible); expected profit + costs - payment for resale
Buyer’s Damages:
Has buyer bought replacement goods?
(1) Purchased replacement goods = K price - cost of new goods
(2) Not purchased replacement goods = K price - market price at time of breach
Additionally, buyer may recover incidental/consequential damages - expenses saved