Enforcement by Award of Damages

Question 1

346- availability of damages

Answer 1

1. injured party has a right to damages for any breach by a party against whom contract is enforceable unless claim for damages has been suspended or discharged
2. if breach caused no loss or if amount of loss is not provided under rules of enforcement by damages, then nominal damages awarded (small sum fixed without regard to amount of loss)

Question 2

347- measure of damages in general

Answer 2

subject to limitations stated in 350 to 353, injured party has right to damages based on expectation interest as measured by

a) loss in value of performance caused by failure or deficiency plus
b) any other loss caused by breach (incidental or consequential) minus
c) any cost or loss avoided by not having to perform

Question 3

348- alternatives to loss in value of performance

1) breach delays use of property and loss in value not proved w/ reasonable certainty
2) breach resulting in bad/ incomplete construction and loss not proved w/ reasonable certainty
3) breach of promise conditioned on a fortuitous event and occurrence of event independent from occurrence of breach

Answer 3

1) IP can recover based on rental value or or interested on value
2) damages available based on a) loss in market value of property caused by breach or b) reasonable cost of completing performance or fixing defects, as long as that cost isn’t disproportionate
3) can recover damages based on value of conditional right at time of breach

Question 4

349- damages based on reliance interest

Answer 4

as alternative to 347 expectation interest, injured party can get reliance interest including expenditures made in prep for other party’s performance, minus what breaching party can prove w reasonable certainty injured party would have suffered anyway

Question 5

350- availability as limitation on damages- duty to mitigate

Answer 5

1. damages not recoverable for loss injured party could have avoided without undue risk, burden, or humiliation UNLESS
2. to extent IP has made reasonable but unsuccessful efforts to avoid loss

Question 6

351- unforeseeability and related limitations on damages

Answer 6

1. damages not available where breaching party didn’t have reason to foresee as probable result of breach when contract was made (b/c of special circumstances that BP has reason to know or because it’s part of ordinary course of events- either way)
2. court can limit foreseeable loss damages by excluding lost profits, limiting it to reliance damages, or otherwise if justice requires avoiding disproportionate compensation

Question 7

352- uncertainty as limit on damages

Answer 7

damages not recoverable for loss beyond amount that evidence permits to be established with reasonable certainty

Question 8

353- loss due to emotional disturbance

Answer 8

recovery for emotional disturbance will be excluded unless breach also caused bodily harm or contract/ breach is of a nature that makes emotional disturbance really likely

Question 9

354- interest as damages

1. failure to pay $ or render performance with fixed $ value
2. any other case

Answer 9

1. interest recoverable from time for performance on amount due minus deductions to which breaching party is entitled
2. interest allowed as justice requires on amount that would have been just compensation had it been paid at time performances due

Question 10

355- punitive damages

Answer 10

not recoverable for breach of contract unless breach is also tort for which punitive damages are recoverable

Question 11

356- liquidated damages and penalties

Answer 11

1. damages for breach by either party may be liquidated in agreement- amount must be proportionate to anticipated or actual loss caused by breach/ provable (or else it is a penalty- unenforceable on pub policy grounds)
2. to extent that amount exceeds loss caused by non-occurrence, term in bond for amount of money as penalty is unenforceable