Day 3 Flashcards
When is anticipatory repudiation applicable?
Applicable when a promisor repudiates a promise before the time for performance arises or elapses
What must the repudiation be?
The repudiation must be clear and unequivocal
Under the UCC, when does anticipatory repudiation occur?
Occurs when there has been an unequivocal refusal of the buyer or seller to perform, or when a party creating reasonable grounds for insecurity fails to provide adequate assurances within 30 days of demand for assurances
What are expectation damages?
They are intended to put the injured party in the same position as if the contract had been performed
How do you calculate expectation damages?
Subtract the contract price from the market value of performance
Must expectation damages be foreseeable?
Yes, expectation damages must be foreseeable and the non-breaching party must be able to prove them with reasonable certainty
What are consequential damages?
Consequential damages are reasonably foreseeable losses to a non-breaching party that go beyond expectations damages such as loss of profits
What are liquidated damages?
Liquidated damages are an amount contractually stipulated as a reasonable estimation of actual damages to be recovered by one party if the other party breaches
What is the test for liquidated damages?
The parties intended to agree in advance to the settlement of damages that might arise from the breach; the amount of liquidated damages was reasonable at the time of contracting, bearing some relation to the damages that be sustained; and actual damages would be uncertain in amount and difficult to prove
When can incidental damages be awarded?
Incidental damages may be awarded to the non-breaching party as compensation for commercially reasonable expenses incurred as a result of the other party’s breach.
When can one recover punitive damages?
Rarely in the contract context……punitive damages are not recoverable unless the conduct constituting the breach is also a tort for which punitive damages can be recovered.
What is restitution?
When a defendant is unjustly enrich by the plaintiff, restitution generally allows the plaintiff to recover on the benefit conferred by the plaintiff upon the defendant
What are reliance damages?
Reliance damages may be recovered if a non-breaching party incurs expenses in reasonable reliance upon the promise that the other party would perform
Under the UCC, how does a seller breach?
Do nothing; make a non-conforming tender; or make a conforming tender
What are the buyers remedies?
Damages, Cover, Specific Performance, Replevin, Rejection, Acceptance, Right to Cure
Misunderstanding Elements
The parties use a material term that is open to two or more reasonable interpretations; each side attaches a different meaning to the term; neither party knows, or should know, of the confusion
Who lacks the capacity to make a contract?
Minors(under 18); The mentally ill
What are the standards for the mentally ill?
The person cannot understand the nature and consequences of his action or the person cannot act in a reasonable manner in relation to the transaction
What is mistake?
Mistake is a belief that is not in accord with a present fact
What are the elements of mutual mistake?
The party’s can rescind if: there is a mistake of fact, existing at the time the deal is made; the mistake relates to a basic assumption of the contract and has a material impact on the deal; the impacted party did not assume the risk of mistake