Damages

Question 1

Expectation damages

Answer 1

objective to put injured party in position he would have been had K not been breached

Question 2

Computation of damages-Standard formula

Answer 2

Loss in value+other losses-costs avoided-loss avoided

Question 3

Damage Analysis-types of Ks

Answer 3

Real property, Employment K, Construction K, and K for sale of goods

Question 4

Real property-Sellers measure of damages formula

Answer 4

K price-MKT price(at breach)-other losses-loss avoided

Question 5

Real property-Buyer measure of damage formula

Answer 5

English rule-Restitution of money paid unless seller’s breach in bad faith. American rule-MKT price(at breach)-K price+other losses-loss avoided

Question 6

Employment K-Employer able to replace employee formula

Answer 6

Cost to replace employee (new salary)+other losses(Incidental/consequential)-cost avoided (unpaid salary)

Question 7

Employemtn K-Employer not able to replace employee formula

Answer 7

FMV of employee’s services+other losses-cost avoided

Question 8

Employment K-Employee measure of damages formula

Answer 8

Unpaid salary+other losses-cost avoided-loss avoided

Question 9

Construction K-Builder’s measure of damage formula

Answer 9

Loss in value+other losses-costs avoided-lost avoided

Question 10

Construction K-Owner’s measure of damages

Answer 10

General: Cost to complete or repair-costs avoided.. (public policy, willful breach) Alternative: Diminution in value (value w/o breach-value w breach). Factors that favor diminution of value: Economic waste. Substantial performance with unintentional deviation.

Question 11

K for sale of goods-Seller’s damages formula

Answer 11

K price-MKT price+incidental $$-expenses saved

Question 12

K for sale of goods-Seller’s damages, Alternatives

Answer 12

1. If resale lower than MKT price: K price-resale price+incidental $$-expenses saved
2. Lost profits-What Seller would have made.

Question 13

K for sale of goods-Lost profits categories

Answer 13

Lost volume seller-sufficient volume that seller can make profit on sale to B and C. Components seller-specifically manufactured goods for buyer; not readily sold on open Mkt. Jobber-seller intends to buy for resale to B and B breaches before seller buys goods.

Question 14

K for sale of goods-Buyer’s damages formula

Answer 14

Mkt price (at time B learns of breach) - K price + incidental/consequential $$ - expenses paid.

Question 15

K for sale of goods-buyer’s damage alternatives

Answer 15

1. Cover price - K price + incidental/consequential $$ - expenses paid.
2. Specific performance-unique goods.

Question 16

Doctrines that D can raise to limit the damages

Answer 16

1. Foreseeability 2. Certainty 3. Causation 4. Mitigation

Question 17

Foreseeability

Answer 17

Not liable for damages because they were not foreseeable by D.

Question 18

Foreseeability-Two part test

Answer 18

1. Damage flow naturally from the breach; OR 2. They must have been within the parties contemplation of the K

Question 19

Certainty

Answer 19

P cannot prove damages to reasonable degree of certainty

Question 20

Certainty-Two ways it will apply

Answer 20

1. New business-Traditionally unable to prove lost profits to reasonable degree of certainty. Trend-Allow data from comparable established businesses.
2. Public whim-Lost profits too speculative and uncertain for entertainment, sporting events, etc.

Question 21

Causation

Answer 21

Breach must be proximate cause of injured party’s losses/damages. Damages limited to losses incurred before event.

Question 22

Employee’s loss avoided and Mitigation to employment

Answer 22

Other jobs during k term unless possible absent breach. Other jobs employee could have held if employer shows; comparable and as or more convenient, employee reasonably failed to look for job, and reasonably likely employee would have found job.

Question 23

Mitigation

Answer 23

Breaching party not required to compensate injured party for avoidable damages.

Question 24

Mitigation (independent contractor and mitigation to leases)

Answer 24

Independent contractor presumed to be capable of handling 1+ Ks at a time. Earnings from other Ks not deducted. In most jurisdictions lessors required to mitigate by attempting to re-rent upon lessee’s default.

Question 25

Non-recoverable damages

Answer 25

1. damages for emotional distress 2. attys fees 3. punitive damages

Question 26

non recoverable damage emotional distress-exceptions

Answer 26

Ks dealing with death, Ks of carrier and innkeepers with guests, Wanton/Reckless breach and bodily injury, bodily injury or K or breach of such a natural, emotional distress likely result, and bad faith breach of insurance K

Question 27

non recoverable damage attys fees exceptions

Answer 27

If K says available, By law, collateral litigation, lawsuit vs insurer to enforce K

Question 28

non recoverable damage punitive damages exception

Answer 28

breach of insurance K

Question 29

Alternatives to expectation damages

Answer 29

Reliance, Restitution, Specific performance, and Agreed remedies

Question 30

Reliance

Answer 30

Put party in position party was in before K. Application; Expectations too speculative. Out of pocket expenses. Recission of K.

Question 31

Restitution (applications)

Answer 31

1. injured party 2. breaching party 3. either or both parties excused

Question 32

Restitution objective

Answer 32

to prevent breaching party from benefitting at the expense of the injured party

Question 33

Restitution-Injured party

Answer 33

Damages based on the reasonable value of P’s services and may exceed K price. Losses not deducted.

Question 34

Restitution-Injury party exceptions

Answer 34

Injured party must complete performance because breach not material. Injured party has completed performance and breaching party’s only remaining duty is to pay money.

Question 35

Restitution-Breaching party

Answer 35

Material breach (no recovery under K). Get reasonable value of the benefit conferred. Amount cannot exceed the K price and recovery offset by $$ owed to injured party

Question 36

Restitution-Either or both parties excused

Answer 36

Any of the excusing doctrines (mistake, impracticability, etc). Recovery based on benefit conferred.

Question 37

Specific performance (what is it and when available)

Answer 37

Equitable remedy within court’s discretion. Available only where remedy at law inadequate; real prop, damages speculative, unique goods, money damages likely uncollectable.

Question 38

Specific performance-Limitations

Answer 38

Court will not order employee to work for employer. (may enjoin employee from working for another through negative injunctive relief). Court will not order employer to hire employee (unless employment discrimination, statutes). Court less likely to order injunctive relief once K has ended. Injunctive relief generally based on unique services.

Question 39

Agreed remedies (liquidated damages clause or penalty)

Answer 39

Is the agreed damages clause intended to compensate injured party (OK); OR punish breaching party (Not OK).

Question 40

2 requirements for liquidated damages clause

Answer 40

Damages must be uncertain and difficult to prove; AND amount of liquidated damages must be reasonably related or anticipated lossses.

Question 41

Agreed remedies–parties not required to?

Answer 41

deduct mitigation earnings