Enforcement

Question 1

Can a party seeking to enforce a contract require specific performance?

Answer 1

Yes, for land contracts (although cannot take away from BFP) and for unique goods contracts

Question 2

For which type of contracts will specific performance never be granted?

Answer 2

Service contracts

Question 3

What is the purpose of money damages? (You need to write this on the exam)

Answer 3

The purpose of money damages is to compensate the plaintiff

And compensate them by protecting their legally recognised expectation.

You compensate the plaintiff by putting the nonbreaching party in the same position they would have been if the breach had not occurred

Question 4

What is the most common way of calculating the plaintiffs damages for breach of contract?

Answer 4

1. Calculate the value of the breaching party’s performance that was lost (expectation damages)
2. • incidental damages
3. +consequential damages
4. • any cost of not having to perform their own obligations

Question 5

Under the UCC rules for damages, at what point do you calculate the buyers damage?

Answer 5

At the time that they learn of the breach

Question 6

Under the UCC rules at what point do you calculate the sellers damages?

Answer 6

Measured at the time of delivery

Question 7

In fact pattern where the seller breaches the contract, but the buyer keeps the goods how do you calculate the damages?

Answer 7

Damages = fair market value of the perfect product

minus the fair market value as delivered

OR cost of repair + incidentals + consequential damages

Question 8

In a contract for the sale of goods, if the seller breaches and they still have the goods, what are the buyers damages?

Answer 8

If B had to replace the goods with an alternative, look at what B expected to pay and the difference they ended up paying in reality. The difference is B’s compensation

Question 9

In a contract for the sale of goods if the buyer breachers and keeps the goods, what compensation does he have to give the seller?

Answer 9

The contract price

Question 10

In a contract for the sale of goods if the buyer breaches, but the seller still has the goods, what does the buyer have to pay in remedies to the seller?

Answer 10

The difference between the contract price and what the seller actually managed to sell the goods for (unless the seller cannot resell, then it is the full contract price

Question 11

In a contract for the sale of goods if the buyer breachers and the seller loses profit, what is the seller owed in compensation?

Answer 11

Provided that the seller can prove that they lost profits then you will be looking at sales volumes for the sellers compensation (i.e. if B hadn’t breached, S would have had two sales, rather than one)

Question 12

Can punitive damages be awarded for breach of contract cases?

Answer 12

No because compensation is not intended to punish

Question 13

If the plaintiff’s expectation damages or two uncertain what other damages might they be able to recover instead?

Answer 13

Reliance damages if the plaintiff reasonably relied on the contract

Question 14

What are incidental damages?

Answer 14

Incidental Damages are the cost of one party having to deal with breach

Question 15

What are consequential damages and when might a party be able to recover them?

Answer 15

These are special damages over and above expectation damages, resulting from the nonbreaching party is particular circumstances.

They are only recoverable if a reasonable person would have foreseen them as a probable result of the breach

Question 16

Can consequential damages be recovered by both buyers and sellers for a contract to do with the sale of goods?

Answer 16

No, under the UCC, only the buyer can recover consequential damages

Question 17

If the nonbreaching party could’ve avoided some if not all of the damages will they still be able to recover for the full breach?

Answer 17

No you must mitigate for avoidable damages

Question 18

In which circumstances may damages incurred by a seller not be recoverable?

Answer 18

If damage were too uncertain. For example, the plaintiff is engaging in new business/activity, the court won’t speculate on possible lost volume of a new business.

Question 19

What are liquidated damages?

Answer 19

A contractual clause fixing the amount of damages and when they can be paid (e.g. X can only recover $1,000 in the event of any breach)

Question 20

In what circumstances will a liquidated damages clause typically be invalid?

Answer 20

A fixed liquidated damages clause is unlikely to succeed where:

1. The damages would have been difficult to estimate at the time of contract formation
2. Is an unreasonable forecast

Question 21

If there is a liquidated damages clause in a contract and the plaintiff meets the requirements for claiming such damages, can they recover even if they haven’t suffered actual money or pecuniary damages?

Answer 21

Yes

Question 22

Under the UCC if a buyer defaults after putting a deposit down on goods how can the seller recover damages?

Answer 22

1. Deposit acts as the liquidated damages (to the extent such a clause exists)
2. If you let no liquid damages clause exists, the seller keeps 20% of the contract price or $500, which ever is less
3. If actual damages are more, the seller may recover actual damages rather than the statutory amount

Question 23

What can a non-breaching party seek as an alternative to damages?

Answer 23

Restitution, which prevents on just enrichment when one party conferred a benefit on another.

OR

Specific performance

Question 24

In a suit for restitution, the measure of recovery is…?

Answer 24

The value of the benefit conferred, which is usually measured by the benefit received by the defendant (goods) OR by the reasonable value of the work performed by the plaintiff (services)

Question 25

What type of remedy is specific performance?

Answer 25

An equitable remedy.

This means you need to consider whether the person seeking it has “clean hands” and “laches”

Question 26

In a construction contract, a homeowner hires a builder to complete an extension on her home. The homeowner will pay the builder $160k for the work. The builder get 1/3 of the way through the project and then unexpectedly quits. The builder spent $30k on materials. The homeowner hires a second contractor, who agrees to complete the work one month later, but says it will cost the homeowner $190k. The homeowner has not paid the builder anything. He’s suing her for the work carried and she’s suing him for the breach. How will damages be calculated?

Answer 26

Homeowner is the non breaching party here. She will recover the cost of completion for the construction ($190k), but less what she would have owed to the builder for materials and work carried out ($30k and his work for 1/3 of the work completed).

Builder may recover for the benefit conferred and will be paid for the cost of materials.

Question 27

In a construction contract, if the homeowner breaches the agreement before the contractor completes work, what may the contractor recover under the contract?

If the homeowner breaches the contract once the contractor completes work, what does the homeowner owe in damages?

Answer 27

The profit they expected to make + costs to date

Then it’s the full contract price.