Damages Flashcards
What are the 5 types of damages?
AERRS
Agreed remedies Expectation Reliance Restitution Specific Performance
What is the general measure of expectation damages?
(Loss in value + other losses) MINUS (costs avoided) MINUS (Loss avoided)
What is the loss in value when calculating damages?
What the party would have received under the contract
Basically,
The unpaid contract price
Define impractibility and the 4 requirements
Where a supervening event makes performance impossible or impracticable, the party seeking relief must show:
- event made performance as agreed upon, impracticable
- nonoccurrence of the event was a basic assumption on which the K was made
- Party seeking to be excused is not at fault
- Party did not assume greater obligation than that imposed by law.
Define modification
Consideration is required for the modification of a contract. Under the pre-existing duty rule, a promise to do what one is already legally obligated to do is not consideration.
A party is in ___ __ if they have not substantially performed and is not entitled to performance
material breach
What are the factors of material breach?
E/E/H/B/L
- Extent to which injured party will obtain the benefit of the bargain or may be adequately compensated in damages
- Extent of the breaching party’s performance
- Hardship on the breaching party
- Breaching party’s willful or negligent conduct
- Likelihood the breaching party will complete performance
Define total breach
If a material breach is not cured within a reasonable time, it becomes a total breach. In that case, the injured party’s performance is discharged.
define Anticipitory repudiation
Anticipatory repudiation is present where a party, by words or conduct, repudiates before the contract before the performance is due.
Can repurdiation can be retracted?
Repudiation can be retraced unless injured party has changed position in reliance on the repudiation or she notified the repudiating party that she is treating the repudiation as final.
What is the GR for demand for adeuqate assurances?
A party with reasonable grounds for insecurity/doubt, can make a demand for adequate assurances in writing
What is the GR for the timing of the demand for adequate assurances?
Once a demand has been made, a failure to provide adequate assurances within a reasonable time not to exceed 30 days, is considered repudiation
Steps for essay analysis
SOF > interpertation > enforcement of the K > avoiding enforcement? > damages > rights & oligations
When asking “is the K enforceable?” what analysis would you do?
SOF
Under the SOF, what are the 4 types of K that fall w/n the SOF?
- Suretyship
- 1-yr
- Sale or transfer of interest in land
- Sale of goods $500+`
What is the writing req/ for SOF?
Signed by party to be charged w/ essential terms, memo sufficient to indicate K
What are the exceptions to each of the 4 types of K that fall w/n the SOF?
- suretyship (main purpose rule)
- 1yr (promissory estoppel)
- k for interest in land (part performance, taken possession + made improvements or payment)
- K for sale of goods 500+ (merchants exception, specially manufactured goods, admission, part perf)
When asking “what are the terms of the K?” what analysis will you do?
Interpretation
What question is asked when analyzing the modified objective approach of interpertation?
Did either party know or have reason to know what the other meant?
If no, there is no K. If yes, K based on innocent party’s terms
What does the doctrine of reasonable expectations usually apply to?
Insurance Ks
What are the factors when analyzing the doctrine of reasonable expectations?
(UorO/DP/FT)
- is the term unusual or oppressive?
- Does the term eliminate the dominant purpose of K?
- Would the insured party reasonably expect to find the term?
What will the court do when invoking the plain meaning rule?
Courts will look to the 4 corners of the doc to determine if the term is ambigious
If a term in the K is ambigious, the court will admit ____ for the parties to explain what the term means
extrinsic evidence
What does the PER exclude?
Prior/contemporaneuous agreements/negotiations
Under the PER, partially integrated wrting can be ___ but not ____
supplemented
contradicted
Under the PER, totally integrated writing cannot be ___ or ___
supplemented
contradicted
When determing if the integration is complete or partial, what are the 2 views the court may use?
Williston/Traditional
Corbin/Modern
Under the Williston/Traditional, the writing will be ___ if there is a merger clause
totally integrated
If there is no merger clause, the court will use the 4 corners rule to see if the writing is ___ and _____ on its face
final
complete
Under the Williston/Traditional, a K is totally integrated unless the term that the other party is trying to admit ____
is naturally not included in the K
Describe the subject matter test
If the subject matter is dealt with in the writing, it is totally integrated because the parties said all they had to say about the term
If the subject matter is not dealt with in the writing, then the writing is ____ ____
partially integrated
Under the Corbin/Modern, what is the GR about evidence?
Any evidence is admissible to prove intent
For the sale of goods under the UCC 2-202, a final expression cannot be contradicted by ____
prior oral or written agreement OR contemporaneous agreement
For the sale of goods under the UCC 2-202, how can the final expression be explained or supplemented?
It can be explained or supplemented by trade usage
Course of dealing/performance
Consistent additional terms
What are the 4 ways to supplement the K?
Best efforts
Good faith
Termination
Warranties
If one party is totally dependent on the other party, that partie’s performance will have a higher bar and must make their ___ ___ to meet the standard
best effort
When will “best efforts” arise?
In exclusive dealing or exclusive distributorship Ks
__ ___ is implied in ALL K’s involving the sale of goods
good faith
T/F: Good faith is implied in employment at will Ks
False
When will termination arise?
When a K is for an indefinite duration and can be terminated at any time
What is the GR for termination under the Code?
Under the Code, there must be reasonable notice of terminate in a K of indefinite duration
What are the 3 types of implied warranties?
Express
Implied Warranty of Merchantability
Implied warranty of fitness for a particular purpose
Express warranties covers ___ ___ ___
statements, models, statements
Once determing a K is enforceable and the courts determine which terms to use, what is the next question in your analysis?
Is non-performance excused
Failure to perform the K amounts to a ___ unless the failure to perform is ___
breach
excused
What are the Doctrines we covered to determine if non-performance of a K can be excused?
Minors/Mentally Incapacitated
Duress, Undue Influence, Misrepresentation, Unconscionability
Public Policy
Mistake (mutual/unilateral)
Impracticability/impossibility/ frustration of purpose, modification
material breach/substantial performance/divisibility/anticipatory repudation
express condtion
What are the Doctrines we covered to determine if non-performance of a K can be excused?
Minors/Mentally Incapacitated
Duress, Undue Influence, Misrepresentation, Unconscionability
Public Policy
Mistake (mutual/unilateral)
Impracticability/impossibility/ frustration of purpose, modification
material breach/substantial performance/divisibility/anticipatory repudation
express condition
What are the 2 prongs to determine unconscionability?
Procedure and Substantive
What do you look for in the procedural prong of unconscionability?
Standard form K/boiler plate/Fine print
“take it or leave it”
education/financial status of the party
What do you look for in the substantive prong of unconscionability?
the terms such as excessive price, dragnet clause
What is the 2 part test when there is an arbitration clause at the heart of the dispute?
- is the party asserting that the clause itself is unconscionable OR
- is the party asserting that the K its self is unconscionable?
What is the 2 part test when there is an arbitration clause at the heart of the dispute?
- is the party asserting that the clause itself is unconscionable OR
- is the party asserting that the K its self is unconscionable?
When the courts is determining if the arbritation clause is unconscionable, they apply what test?
The two prong procedural/substantive test
When engaging in an analysis of impossi/imprac, analyze using the elements for impract, which are:
The event makes performance as agreed upon impossible/imprac (if there is an alternative way, they are not relieved of duty to perform)
AND
Non-occurence of that event was a basic assumption upon which the K was made.
Under the doctrine of frustration of purpose, the event ___ frustrated the ___ ___ of K
substantially
principal purpose
Impract. vs. FOP
If the party had to provide a service of good, its IMPRACT. because an event occured such that they couldnt render the service or deliver the good.
If the party was supposed to $$$ for the service or good, the party is still capable to perform, BUT the party’s reason for performing has been substantially frustrated by the event
Courts will enforce the no oral modification clause if its for a contract for the sale of ____
goods
What is the 4th question in your analysis of the K?
What are the parties remedies?
What is the objective of expectation damages?
to put the injured party in the position they would have been in but for the breach
When analyzing expectation damages you have to do the following:
- identify the type of K
- identify the injured party
- what would the injured party (owner,buyer,employer) have paid if the K WAS NOT BREACHED?
- what would the injured party have received? (builder, seller, employee)
- focus on the UNpaid K price
What is the objective of reliance damages?
Put the injured party in position BEFORE they entered the K
What is the objective of restitution damages? (3 applications)
- injured parties
- breaching parties
- either or both parties excused
When is specific performance available?
When a remedy at law is inadequate
When is specific performance NOT available?
For personal services
What are the 4 limitation principles on damages?
foreseeability
certainty (new biz, public whim, entertainment)
causation (intervening event)
mitigation
Which damages are nonrecoverable?
Attys fees
$$ for emotional distress
Punitive $$ (insurance Ks)
What are the 3 parties in a TPB K?
Promisor
Promisee
TBP
Generally the cause of action in a TBP case, who sues who?
The TPB sues the promisor
If a TPB is incidental, they ___ sue the promisor
Cannot
What are the 4 defenses a promisor will raise in a TPB case?
- if there is an incidental beneficiary involved
- TPB’s rights discharged or modified before vesting
- defenses promisor has against promisor
- defenses promisee has against TPB
Since the beneficiary is not a party, they cannot have rights ___ than the parties of the K
greater
What constitutes an assignment?
When a party is transferring their rights to someone else
In an assignment, what are the parties called?
Assignor/Assignee
___ is liable to the assignee upon notice of the assignment
Obligor
T/F: an obligor must assent to the assignment
False
What defenses are avilable in an assignee v. obligor case?
The obligor would argue that there was a
- non assignable right
- non assignment clause in K
- material change in obligors duties
- Any K defenses obligor has against assignor
In delegation, what are the parties called?
delegator - gives duties
delegate- received duties
obligee- the party who is owed the duty by the delegate
T/F: An obligee must consent to the delegates performannce
False
In a delegation, the ___ remains liable on K until performance
delegator
