Exam 3

Question 1

Alexus gives Kaitlyn a “dealer franchise” to sell Alexus’s products in a stated area for one year. In preparation for performance, Kaitlyn spends money on advertising, hiring sales personnel, and acquiring premises that cannot be used for other purpose. Alexus then repudiates before performance begins.

Answer 1

If neither party proves with reasonable certainty what profit or loss Kaitlyn would have made if the contract had been performed, Kaitlyn can recover as damages her expenditures in preparation for performance.

Question 2

Alexus contracts with Kaitlyn to stage a series of performances in Kaitlyn’s theater, each to have 50 per cent of the gross receipts. After Alexus has spent 20,000 in getting ready for the performance, Kaitlyn rents the theater to others and repudiates the contract, and Alexus stages the performance at another theater. Alexus’s expenditures in preparation for performance of the contract with Kaitlyn are worth 8,000 to him in connection with staging the performances at the other theater.

Answer 2

If neither party proves with reasonable certainty what profit or loss Alexus would have made if the contract had been performed, Alexus can recover as damages the 12,000 balance of her expenditures in preparation for performance.

Question 3

Alexus contracts to build a factory of experimental design for 1,000,000. After Alexus has spent 250,000 and been paid 150,000 in progress payments, Kaitlyn repudiates the contract and Alexus stops work. Alexus’s expenditures include materials worth 10,000 that she can use on other jobs.

Answer 3

If neither party proves with reasonable certainty what profit or loss Alexus would have made if the contract had been performed, Alexus can recover as damages the 90,000 balance of her expenditures in preparation for performance.

Question 4

Alexus contracts to sell her retail to Kaitlyn. After Kaitlyn has spent 100,000 for inventory, Alexus repudiates the contract and Kaitlyn sells the inventory for 60,000. If neither party proves with reasonable certainty what profit or loss Kaitlyn would have made if the contract had been performed,

Answer 4

, Kaitlyn can recover as damages the 40,000 loss that she sustained on the sale of the inventory.

Question 5

(two options for answer) Alexus, a carpenter, contracts to repair Kaitlyn’s roof for 3,000. Alexus does part of the work at a cost of 2,000, increasing the market price of Kaitlyn’s house by 1,200. The market price to have a similar carpenter do the work done by Alexus is 1,800. Alexus restitution interest is equal to the benefit conferred on Kaitlyn. That benefit may be measured either by the addition to Kaitlyn’s wealth from Alexus’s services in terms of 1,2000 increase in the market price of Kaitlyn’s house or the reasonable value to Kaitlyn of Alexus’s services in terms of the 1,800 that it would have cost Kaitlyn to engage a similar carpenter to do the same work.

Answer 5

If the work was not completed because of a breach by Alexus and restitution is based on the rule stated in 374, 1,200 is appropriate. If the work was not completed because of a breach by Kaitlyn and restitution is based on the rule stated 373, 1,8000 is appropriate

Question 6

Alexus, a surgeon, contracts to perform a series of emergency operations on Kaitlyn for 3,000. Alexus does the first operation, saving Kaitlyn’s life, which can be valued in view of Kaitlyn’s life expectancy at 1,000,000. The market price to have an equally competent surgeon do the first operation 1,800. Alexus’s restitution is equal to the benefit conferred on Kaitlyn.

Answer 6

That benefit is measured by the reasonable value to Kaitlyn of Alexus’s services in terms of the 1,800 that it would have cost Kaitlyn to engage a similar surgeon to do the operation regardless of the rule on which restitution is based.

Question 7

Alexus, a social worker, promises Kaitlyn to render personal services to Anna in return for Kaitlyn’s promise to educate Alexus’s children. Alexus renders only part of the services and Kaitlyn then refuses to educate Alexus’s children. The market price to have a similar social worker do the services rendered by Alexus is 1,800

Answer 7

If Alexus recovers in restitution under the rule stated in 373, an appropriate measure of the benefit conferred on Kaitlyn is the reasonable value to Kaitlyn of Alexus’s services in terms of the 1,8000 that it would have cost Kaitlyn to engage a similar social worker to do the same.

Question 8

Alexus contracts to sell a tract of land to Kaitlyn for 100,000. After Kaitlyn has made a part payment of 20,000, Alexus wrongfully refuses to transfer title. Kaitlyn can recover the 20,000 in restitution.

Answer 8

The result is the same even if the market price of the land is only 70,000, so that performance would have been disadvantageous to Kaitlyn

Question 9

Alexus contracts to build a house for Kaitlyn for 100,000, progress payments to be made monthly. After having been paid 40,000 for two months, Alexus commits a breach that is not material by inadvertently using the wrong bran of sewer pipe.

Answer 9

Kaitlyn has a claim for damages for partial breach but cannot recover the 40,000 that she has paid Alexus.

Question 10

On Feb 1st, Alexus and Kaitlyn make a contract under which, as consideration for Kaitlyn’s immediate payment of 50,000, Alexus promises to convey to Kaitlyn a parcel of land on May 1. On March 1, Alexus repudiates by selling the parcel to Anna. On April 1, Kaitlyn commences an action against Anna.

Answer 10

Although under the rule stated in 253, Kaitlyn has no claim against Alexus for damages for breach of contract until performance is due on May 1, Kaitlyn can recover 50,000 from Alexus in restitution.

Question 11

Alexus, who holds a mortgage on Kaitlyn’s land, promises Kaitlyn that he will not foreclose the mortgage for another year, even if Kaitlyn makes no payments. In reliance on Alexus’s promise, Kaitlyn makes valuable improvements. Alexus forecloses in breach of her promise and buys the land at a judicial sale for the amount of the mortgage debt.

Answer 11

Kaitlyn can recover in restitution for the value of the improvements.

Question 12

Alexus contracts to work for Kaitlyn for one month for 10,000. After Alexus has fully performed, Kaitlyn repudiates that contract and refuses to pay the 10,000.

Answer 12

Alexus can get damages against Kaitlyn for 10,000, together with interest, but cannot recover more than that sum even if she can show that the benefit to Kaitlyn from the services was greater than 10,000.

Question 13

Alexus contracts to build a building for Kaitlyn in return for Kaitlyn’s promise to transfer a tract of land to Alexus and to pay 10,000. After Alexus has built the building, Kaitlyn refuses to transfer title or to pay the 10,000.

Answer 13

Alexus has a right to the reasonable value of his work and materials.

Question 14

Alexus contracts to build a building for Kaitlyn in return for Kaitlyn’s promise to transfer a tract of land to Alexus and to pay 10,000. After Alexus has built the building, Kaitlyn refuses to transfer title or to pay the 10,000.

Answer 14

Alexus has a right to the reasonable value of her work and materials.

Question 15

Alexus contracts to work as a consultant for Kaitlyn for a fee of 50,000, payable at the end of the year, together with a payment of 200 a month for Alexus’s use of her own car and reimbursement of Alexus’s expenses. Kaitlyn wrongfully discharges Alexus at the end of the six months.

Answer 15

Alexus cannot recover in restitution for the use of her car or for her expenses but can recover for these items as provided in the contract.

Question 16

Alexus contracts to build a house for Kaitlyn for 50,000, progress payments to be made monthly in an amount equal to 85 percent of the price of the work performed during the preceding month, the balance to be paid on the architect’s certificate of satisfactory completion of the house. Kaitlyn makes the first three payments and then repudiates the contract and has another builder finish the house. Alexus can recover in restitution for the reasonable value of her work, labor and materials, less the amount of the three payments.

Answer 16

The performance during each month and the corresponding progress payments are not agreed equivalents under the rule stated in 240.

Question 17

Alexus, a plumbing subcontractor, contracts with Kaitlyn, a general contractor, to install the plumbing in a factory being built by Kaitlyn for Anna. Kaitlyn promises to pay Alexus 100,000. After Alexus has spent 40,000, Kaitlyn repudiates the contract and has the plumbing finished by another subcontractor at a cost of 80,000.

Answer 17

The market price to have a similar plumbing subcontractor do the work done by Alexus is 40,000. Alexus can recover the 40,000 from Kaitlyn in restitution.

Question 18

Alexus contracts to build a house for Kaitlyn for 100,000. After Alexus has spent 40,000, Kaitlyn discovers that she does not have good title to the land on which the house is to be build. Kaitlyn repudiates the contract and abandons the project. Alexus’s work results in no actual benefit to Kaitlyn.

Answer 18

Alexus cannot recover the restitution from Kaitlyn, but under rule stated in 349 she can recover as damages 40,000 that she has spent unless Kaitlyn proves with reasonable certainty that Alexus would have sustained a net loss if the contract had been performed.

Question 19

Alexus contracts to work as a consultant for Kaitlyn for a fee of 50,000, payable at the end of the year. Kaitlyn wrongfully discharges Alexus at the end of eleven months.

Answer 19

Alexus can recover in restitution based on the reasonable value of her services. The terms of the contract are evidence of this value but are not conclusive.

Question 20

Alexus contracts to build a bridge for Kaitlyn for 100,000. Kaitlyn repudiates the contract shortly after Alexus has begun work on the bridge, telling Alexus that she no longer has need for it. Alexus nevertheless spends an additional 10,000 in continuing to perform.

Answer 20

Alexus’s restitution interest under the rule stated in 370 does not include the benefit conferred on Kaitlyn by the 10,000.

Question 21

Alexus contracts to sell land to Kaitlyn for 100,000, which Kaitlyn promises to pay in 10,000 installments before transfer of title. After Kaitlyn has paid 30,000 she fails to pay the remaining installments and Alexus sells the land to another buyer for 95,000. Kaitlyn can recover 30,000 from Alexus in restitution less 5,000 damages for Kaitlyn’s breach of contract, or 25,000.

Answer 21

If Alexus does not sell the land to another buyer and obtains a decrees of specific performance against Kaitlyn, Kaitlyn has no right to restitution.

Question 22

Alexus contracts to make repairs to Kaitlyn’s building in return for Kaitlyn’s promise to pay 10,000 on completion of the work. After spending 8,000 on the job, Alexus fails to complete it because of insolvency. Kaitlyn has the work completed by another builder for 4,000, increasing the value of the building to him by a total of 9,000, but he loses 500 in rent because of the delay.

Answer 22

Alexus can recover 5,000 from Kaitlyn in restitution less 500 in damages for the loss caused by the breach, or 4,500.

Question 23

Alexus contracts to make repair to Kaitlyn’s building in return for Kaitlyn’s promise to pay 10,000 on completion of the work. Alexus makes repair costing him 8,000 but inadvertently fails to follow the specifications in such material respects that there is no substantial performance. The defects cannot be corrected without the destruction of large parts of the building, but the work confers a benefit on Kaitlyn by increasing the value of the building to him by 4,000.

Answer 23

Alexus can recover 4,000 from Kaitlyn in restitution.

Question 24

The facts above, the defects do not require destruction of large parts of the building and can be corrected for 4,000, which will confer a benefit on Kaitlyn by increasing the value of the building to him by a total of 9,000.

Answer 24

Alexus can recover 5,000 from Kaitlyn in restitution.

Question 25

Alexus contracts to tutor Kaitlyn’s daughter for six months in preparation for an examination, in return for which Kaitlyn promises to pay Alexus 2,000 at the end of that time. After Alexus has worked for three months, she leaves to take another job and Kaitlyn is unable to find a suitable replacement.

Answer 25

In the absence of any reliable basis for measuring the benefit to Kaitlyn from Alexus’s part performance, restitution will be denied.

Question 26

The facts above, the contract provides that on default by Kaitlyn, Alexus has the right to retain the first 10,000 installment paid by Kaitlyn.

Answer 26

If 10,000 is a reasonable amount, Kaitlyn can recover only 20,000 from Kaitlyn in restitution.

Question 27

Facts above, the contract provides that on default by Kaitlyn, Alexus has the right to retain any installments paid by Kaitlyn.

Answer 27

The provision is not valid, and Kaitlyn can still recover 30,000 from Alexus in restitution less 5,000 damages for Kaitlyn’s breach of contract, or 25,000.

Question 28

Alexus makes an oral contract to furnish services to Kaitlyn that are not to be performed within a year. After Alexus has worked for two months Kaitlyn discharges him without paying him anything.

Answer 28

Alexus can recover from Kaitlyn as restitution the reasonable value of the services rendered during the two months.

Question 29

Alexus makes an oral contract to sell a tract of land to Kaitlyn for 100,000. Kaitlyn pays 50,000, takes possession and makes improvements. Alexus then refuses to convey the land to Kaitlyn, and Kaitlyn sues Alexus for restitution of 50,000 plus 20,000, the reasonable value of the improvements, less 5,000, the value to Kaitlyn of the use of the land.

Answer 29

Kaitlyn can recover 65,000 from Alexus.

Question 30

Alexus, a home owner, makes an oral contract with Kaitlyn, a real estate broker, to pay Kaitlyn the usual 5% commission if Kaitlyn succeeds in selling Alexus’s house. The SOF contains a provision providing that a real estate broker shall have no right to such a commission unless there is a written memorandum of the contract Kaitlyn sells Alexus’s house for 100,000 and sues Alexus in restitution for 5,000, the reasonable value of Kaitlyn’s services

Answer 30

Kaitlyn cannot recover in restitution because the purpose of the Statute would be frustrated if Kaitlyn were allowed to recover as restitution the same amount that had been promised under the contract.

Question 31

Alexus makes an oral contract to buy a tract of land from Kaitlyn for 100,000. Payment is to be made in 10,000 installments, conveyance to be made on the payment of the third installment. Alexus pays 10,000 and then refuses to pay any more and sues Kaitlyn to recover in restitution the 10,000 that she has paid. If Kaitlyn signs a sufficient memorandum, Alexus’s refusal to pay is a defense to her action under the rule 141(1) and Alexus cannot get restitution.

Answer 31

If Kaitlyn refuses to sign a sufficient memorandum, Alexus’s refusal to pay is not a defense under the rule in 141(2) and Kaitlyn can get restitution.

Question 32

Alexus contracts to sell an automobile to Kaitlyn, an infant, for 2,000. After Alexus has delivered the automobile and Kaitlyn has paid the 2,000, Kaitlyn disaffirms the contract on the ground of infancy, tenders the automobile back to Alexus, and sues Alexus for 2,000.

Answer 32

Kaitlyn can recover the 2,000 from Alexus in restitution.

Question 33

Alexus contracts to sell and Kaitlyn to buy for 100,000 a tract of land, the value of which has depended mainly on the timber on it. Both Alexus and Kaitlyn believe that the timber is still there, but in fact it has been destroyed by fire. After Alexus has conveyed the land to Kaitlyn and Kaitlyn has paid the 100,000, Kaitlyn discovers the mistake. Kaitlyn disaffirms the contract for mistake, tenders a deed to the land to Alexus, and sues Alexus for 100,000.

Answer 33

Kaitlyn can recover 100,000 from Alexus. Kaitlyn can recover 100,000 from Alexus in restitution.

Question 34

Alexus submits a 150,000 offer in response to Kaitlyn’s invitation for bids on the construction of a building. Alexus believes that this is the total of a column of figures, but she has made an error by inadvertently omitting 50,000, and fact the total is 200,000. Because Kaitlyn has estimated the expected cost as 180,000 and the 10 other bids were all in the range between 180,000 and 200,000, Kaitlyn had reason to know of Alexus’s mistake. Alexus discovers the mistake after she has done part of the work, disaffirms the contract on the ground of mistake 153, and sues Kaitlyn in restitution for the benefit conferred on Kaitlyn as measured by the reasonable value of Alexus’s performance.

Answer 34

Alexus can recover the reasonable value of her performance in restitution and if the cost of the work done can be determined under the next lowest bid, the cost is evidence of its reasonable value.

Question 35

Alexus fraudulently induces Kaitlyn to make a contract to buy a tract of land for 100,000. After Alexus has conveyed the land and Kaitlyn has paid the price, Kaitlyn makes improvements on the land with a reasonable value of 20,000. Kaitlyn then discovers the fraud, disaffirms the contract for misrepresentation, tenders a deed to the land to Alexus, and sues Alexus for 100,000 plus 20,000, the reasonable value of the improvements, less 5,000 the value to Kaitlyn of the use of the land.

Answer 35

Kaitlyn can recover 115,000 in restitution from Alexus.

Question 36

Alexus fraudulently induces Kaitlyn to make a contract to sell a tract of land for 100,000. After Kaitlyn has conveyed the land and Alexus has paid the price, Alexus farms the land at a net profit of 10,000. Kaitlyn then discovers the fraud, disaffirms the contract for misrepresentation, tenders back the 100,000, and sues Alexus for specific restitution plus the 10,000 profit that Alexus made by farming the land.

Answer 36

Kaitlyn can recover the land and 10,000 in restitution from Alexus.

Question 37

Alexus contracts to sell to Kaitlyn a factory and a patent and Kaitlyn makes a party payment of 100,000. Alexus assigns the patent but fails to transfer the factory to Kaitlyn. Kaitlyn sues Alexus asking restitution of 100,000 without offering the reassign the patent.

Answer 37

Kaitlyn is entitled to a judgment for that amount conditional on her tender of a reassignment of the patent.

Question 38

Alexus is induced by Kaitlyn’s fraudulent misrepresentations to contract to sell to Kaitlyn for 10,000 an antique worth 100,000. Alexus delivers the antique and Kaitlyn pays the 10,000. On discovery of the fraud, Alexus demands the return of the antique without offering to repay the 10,000. On Kaitlyn’s refusal, Alexus sues Kaitlyn in conversion for the value of the antique.

Answer 38

Alexus is entitled to a judgment for 90,000, the value of the antique less 10,000.

Question 39

Facts above, Alexus sues Kaitlyn in replevin and posts a bond.

Answer 39

If the procedure in replevin does not permit an adequate opportunity for the determination of Alexus’s claim of fraud before return of the antique to her, replevin will be denied on the ground that she has not offered to return the 10,000.

Question 40

Alexus contracts to work on Kaitlyn’s ranch in return for a number of cattle warranted by Kaitlyn to be sound. After Alexus has been the work and Kaitlyn has delivered the cattle, they are discovered to have hoof and mouth disease and are destroyed by government order.

Answer 40

Alexus is entitled to restitution of the reasonable value of his services.

Question 41

Alexus puts her daughter in Kaitlyn’s private school, paying a year’s tuition in advance. During the first month of school, the daughter to wrongfully expelled by Kaitlyn.

Answer 41

Alexus is entitled to restitution of the amount of tuition paid less the benefit to Alexus of Kaitlyn’s services during the first month.

Question 42

Alexus contracts to buy from Kaitlyn her seat on the stock exchange, her good will and the furniture in her office and pays 10,000 as part of the price. Kaitlyn delivers the furniture and Alexus sells it to others. Later Kaitlyn refuses to perform the rest of the contract.

Answer 42

Alexus is entitled to restitution of 10,000 less compensation to Kaitlyn for the furniture.

Question 43

Alexus contracts to lease a plow and a tractor to Kaitlyn, to be used together. The price is stated to be 200 for the plow and 500 for the tractor, and Kaitlyn pays the full 700 in advance. Alexus delivers the plow but fails to deliver the tractor. Kaitlyn can offer to return the plow and get restitution of 700.

Answer 43

Because the prices are apportioned, Kaitlyn can also keep the plow and get restitution of 500.

Question 44

Alexus contracts to employ as a confidential secretary for a month for 2,000, to be paid at the end of that time. Kaitlyn falls ill after working for two weeks and the duties of performance of both Alexus and Kaitlyn are discharged as a result of impracticability of performance. Kaitlyn is entitled to restitution from Alexus for the services that she has performed.

Answer 44

The results is the same if Kaitlyn’s duty is discharged as a result of Alexus’s illness rather than Kaitlyn’s.

Question 45

Alexus contracts to employ Kaitlyn as a confidential secretary for a month for 2,000 to be paid in advance. Kaitlyn falls ill after Alexus has paid the 2,000 but before Kaitlyn has begun work and the duties of performance of both Alexus and Kaitlyn are discharged as a result of impracticability of performance.

Answer 45

Alexus is entitled to restitution of 2,000 from Kaitlyn. If Kaitlyn had fallen ill after working for two weeks, Kaitlyn would also be entitled to restitution form Alexus for the services that she has performed.

Question 46

Alexus contracts to sell and Kaitlyn to buy a house for 50,000, conditional on approval by X’s Bank of Kaitlyn’s pending mortgage application. Kaitlyn pays Alexus 5,000 when the contract is signed. In spite of reasonable efforts by Kaitlyn, the X bank does not approve her application and her duty of performance is discharged.

Answer 46

Kaitlyn is entitled to restitution of 5,000 from Alexus.

Question 47

Alexus contracts with Kaitlyn to shingle the roof of Kaitlyn’s house for 5,000, payable as the work progresses. After Alexus has spent 2,000 doing part of the work and has been paid 1,8000, much of the house including the roof is destroyed by fire without her fault, and the duties of performance of both Alexus and Kaitlyn are discharged as a result of impracticability of performance. The work done before the fire increased the market price and the insurable value of the house by 1,5000.

Answer 47

Alexus is entitled to restitution of 1,500 from Kaitlyn and Kaitlyn is entitled to restitution of 1,8000 from Alexus.

Question 48

Facts above, the fire also destroyed shingles that had cost Alexus 500 and that were piled near the house for the rest of the work. Alexus is not entitled to restitution of this loss from Kaitlyn. Nor can Alexus subtract the 500 from the 1,800 she has been paid in determining the benefit that she has received.

Answer 48

The court may, however, take this loss into consideration in deciding whether to allow Alexus restitution of 1,500 or 2,000.

Question 49

Alexus contracts to paint some bizarre frescoes in Kaitlyn’s house for 10,000. The frescoes will not increase the market value of the house. Alexus dies after the frescoes have been partly completed. Other artists can adequately complete the work and will do so for 6,000. Alexus’s executors are entitled to restitution of 4,000 from Kaitlyn. If they can prove that Alexus’s price was unusually low because of Alexus’s lack of employment and an economic depression and that the work was roughly half finished,

Answer 49

the court may properly allow restitution of 5,000.

Question 50

Alexus contracts to tutor Kaitlyn’s daughter for six months in preparation for an examination, in return for which Kaitlyn promises to pay Alexus 2,000 at the end of that time. After Alexus has worked for 3 months, Kaitlyn’s daughter becomes ill and the duties of performance of both Alexus and Kaitlyn are discharged as a result of impracticability of performance. Other tutors would have charged 800 to do the work that Alexus has done.

Answer 50

Alexus is entitled to restitution of 800 from Kaitlyn. Even if the tutors would have changed 1,2000, Alexus is entitled to restitution of only 1,000 from Kaitlyn unless from Kaitlyn unless she can show that the first half of the work was more burdensome.

Question 51

Alexus is induced by Kaitlyn’s misrepresentation to sell a tract of land to Kaitlyn for 100,000. On discovery of the misrepresentation, Alexus tenders back the 100,000 and sues Kaitlyn for specific restitution of the land.

Answer 51

Specific restitution will be granted.

Question 52

Alexus contracts to transfer a tract of land to Kaitlyn in return for Kaitlyn’s promise to transfer a tract of land to Alexus at the same time. After Alexus has transferred her tract to Kaitlyn and received a deed from Kaitlyn, Alexus learns that Kaitlyn does not have title to other tract. Alexus sues Kaitlyn for specific restitution. Specific restitution will be granted, together with compensation to Alexus for the value to Kaitlyn of the use of the land, because the right to specific restitution will not unduly interfere with the certainty of title to land.

Answer 52

If Kaitlyn’s promise is to transfer her tract to Alexus 10 years after Alexus’s transfer of her tract, specific restitution will be denied because a right to specific restitution would unduly interfere with certainty of title to land during the 10 years.

Question 53

Alexus contact to transfer a tract of land to Kaitlyn in return for Kaitlyn’s promise to support Alexus for life. Kaitlyn repudiates the contract after she has supported Alexus for a time and Alexus has transferred the land to her, and Alexus sues Kaitlyn for specific restitution.

Answer 53

Specific restitution will be granted, conditional on compensation by Alexus for any support that she has received less the value to Kaitlyn of the use of the land, because the right to specific restitution will not unduly interfere with the certainty of title to land given the inadequacy of Alexus’s right to damages because of the difficulty of proving damages with sufficient certainty.

Question 54

Alexus contracts to transfer a tract of land to Kaitlyn in return for Kaitlyn’s promise to transfer a tract of land to Alexus at a later date. After Alexus has transferred her tract of land to Kaitlyn, Kaitlyn sells both tracts to Anna, a good faith purchaser for value, taking a mortgage to secure the balance of the price on the tract transferred by Alexus. Alexus sues Kaitlyn and Anna for specific restitution.

Answer 54

SR will be denied but Alexus can get a decree subrogating her to Kaitlyn’s right to the balance of the price and to her rights under the purchase money mortgage that secures it.

Question 55

Alexus contracts to transfer to Kaitlyn half of her 20,000 shares of stock in the X Corporation in return for Kaitlyn’s promise to pay 100,000 to organize a holding company to control X Corp and to protect Alexus’s remaining interest as a shareholder. After Alexus has transferred the stock and Kaitlyn has paid the 100,000, Kaitlyn refuses to organize the holding company. Alexus sues Kaitlyn for SR to organize the holding company. Alexus sues Kaitlyn for SR.

Answer 55

SR may properly be granted conditional on repayment by Alexus of the 100,000.

Question 56

Alexus makes an oral contract with Kaitlyn under which Alexus transfers 1,000 shares of stock to Kaitlyn in return for Kaitlyn’s promise to convey a tract of land to Alexus. Kaitlyn repudiates the contract before she has conveyed the land and tenders back the stock and the dividends received from it and keeps her tender good. Alexus rejects the tender and sues Kaitlyn for restitution of the value to Kaitlyn of the stock.

Answer 56

Alexus cannot recover the value of the stock.

Question 57

Iliana contracts to publish a novel that Barbara has written. Barbara repudiates the contract and Barbar is unable to get his novel published elsewhere.

Answer 57

Subject to limitations in 350-353, Barbara’s damages include the loss of royalties that he would have received had the novel been published together with the value to him of the resulting enhancement of his reputation.

Question 58

Iliana, a manufacturer, contracts to sell Barbara, a dealer in used machinery, a used machine that Barbara plans to resell. Iliana repudiates and Barbara is unable to obtain a similar machine elsewhere.

Answer 58

Subject to the limitations stated in 350-535, Barbara’s damages include the net profit that he would have made on resale of the machine.

Question 59

Iliana contracts to employ Barbara for 10K to supervise the production of Iliana’s crop, but breaks the contract by firing Barbara at the beginning of the season. Barbara reasonably spends 200 in feet attempting to find other suitable employment through appropriate agencies.

Answer 59

Barbara can recover the 200 incidental loss in addition to any other loss suffered, whether or not he succeeds in finding other employment.

Question 60

Iliana leases a machine to Barbara for a year, warranting its suitability for Barbara’s purpose. The machine is not suitable for Barbara’s purpose and causes 10K in damages to Barbara’s property and 15K in personal injuries.

Answer 60

Barbara can recover the 25K consequential loss in addition to any other loss suffered.

Question 61

Iliana contracts to build a hotel for Barbara for 500K and to have it ready for occupancy by May 1. Barbara’s occupancy of the hotel is delayed for a month because of a breach by Iliana.

Answer 61

The cost avoided by Barbara as a result of not having to operate the hotel during May is subtracted from the May rent lost in determining Barbara’s damages.

Question 62

Iliana contracts to build a house for Barbara for 100K. When it is partly built, Barbara repudiates the contract and Iliana stops work. Iliana would have to spend 60K more to finish the house.

Answer 62

The 60K cost avoided by Iliana as result of not having to finish the house is subtracted from the 100K price lost in determining Iliana’s damages. Iliana has a right to 40K in damages from Barbara, less any progress payments that he has already received.

Question 63

The facts in illustration 6, Iliana has bought materials that are left over and that he can use for other purposes, saving him 5K.

Answer 63

The 5K cost avoided is subtracted in determining Iliana’s damages, resulting in damages of only 35K rather than 40K.

Question 64

Iliana contracts to convey land to Barbara in return for Barbara’s working for a year. Barbara repudiates the contract before Iliana has conveyed the land.

Answer 64

The value to Iliana of the land is subtracted from the value to Iliana of Barbara’s services in determining Iliana’s damages.

Question 65

Iliana contracts to employ Barbara for 10K to supervise the production of Ilianas crop, but breaks his contract by firing Barbara at the begining of the season. Barbara instead takes another job as a supervisor at 9500.

Answer 65

The 9500 is subtracted from the 10K loss of earnings is determining Barbara’s damages.

Question 66

Iliana contracts to build a machine for Barbara and deliver it to be installed in his factory by June 30. Iliana breaks the contract and does not deliver the machine. Barbara’s factory is destroyed by fire on Decemeber 31 and the machine, if it had been installed there, would also have been destroyed.

Answer 66

The fact that the factory was burned is not considered in determining Barbara’s damages.

Question 67

Iliana contracts to send his daught to Barbara’s school for 5000 tuition. After the academic year has begun, Iliana withdrawals her and refuses to pay anything. Iliana’s breach does not reduce Barbara’s instructional or other costs and Barbara is unable to find another student to take the palace of Iliana’s daughter.

Answer 67

Barbara has a right to damages equal to the full 5K.

Question 68

Iliana contracts to build a house for Barbara for 100K, but repudiates the contract after doing part of the ork and having been paid 40K. Other builders would charge Barbara 80K to finish the house, but Barbara finds a builder in need of work who does it for 70K.

Answer 68

Barbara’s damages are limited to the 70K that he actually had to pay to finish the work less the 60K cost avoided or 10K, together the damages for any loss caused by the delay.

Question 69

Iliana contracts to employ Barbara for 10K to supervise the production of Iliana’s crop. Iliana breaks the contract by firing Barbara at the beginning of the season, and Barbara, unable to find another job, instead takes a job as a farm laborer for the entire season at 6000.

Answer 69

The 6000 that he made as a farm laborer is subtracted from the 10K loss of earnings in determining Barbar’s damages.

Question 70

Iliana contracts to employ Barbara for 10K to supervise the production of Iliana’s crop, but breaks his contract by firing Barbara at the beginning of the season. Barbara is unable to find another similar job but receives 3000 in state unemployment benefits.

Answer 70

Whether the 3000 will be subtracted from the 10K loss of earning depends on the state legislation under which it was paid and the policy behind it.

Question 71

On April 1, Iliana and Barbara make a personal service contract under which Iliana is to employ Barbara for six months beginning July 1 and Barbara is to work for Iliana during that period. On May 1, Barbara repudiates the contract. On August 1, Barbara falls ill and is unable to perform the contract for the remainder of the period.

Answer 71

Iliana can only recover damages based on his loss during the month of July since his loss during subsequent months was not caused by Barbara’s breach.

Question 72

Iliana contracts to pave Barbara’s parking lot for 10K. Barbara repudiates the contract and Iliana subsequently makes a contract to pave a similar parking lot for 10K. Iliana’s business could have been expanded to do both jobs.

Answer 72

Unless it is proved that he would not have undertaken both, Iliana’s damages are based on the net profit he would have made on the contract with Barbara, without regard to the subsequent transaction.

Question 73

Iliana contracts to build a bridge for Barbara for 100K. Barbara repudiates the contract shortly after Iliana has begun work on the bridge, telling Iliana that he no longer has need for it. Iliana nevertheless spends an additional 10K in continuing to perform.

Answer 73

Iliana’s damages for breach of contract do not include the 10K.

Question 74

Iliana contracts to lease a machine to Barbara and to deliver it at Barbara’s factore. Barbara repudiates the contract, but Iliana nevertheless ships the machine to Barbara, who refuses to receive it.

Answer 74

Iliana’s damages for breach of contract do not include the cost of shipment of the machine.

Question 75

Iliana sells oil to Barbara in barrels. Barbara discovers that some of the barrels are leakly, in breach of warranty, but does not transfer the oil to good barrels that he has available.

Answer 75

Barbara’s damages for breach of contract do not include the loss of the oil that could have been saved by transferring the oil to the available barrels.

Question 76

Iliana contracts to sell flour to Barbara. The flour is defective, in breach of warranty, as Barbara discovers after delivery. Barbara nevertheless uses it to bake bread to supply his customers.

Answer 76

Barbara’s damages for breach of contract do not include his loss of business caused by delivering inferior bread made from the flour.

Question 77

Iliana contracts to sell to Barbara a used machine to be delivered at Barbara’s factory by June 1 for 10K. Iliana breaks the contract by repudiating it on May 1. By appropriate efforts Barbara could buy a similar machine from another seller for 11K in time to be delivered at his factory by June 1, but he does not do so and loses a profit of 25K that he would have made from use of the machine.

Answer 77

Barbara’s damages do not include the loss of the 25K profit, but he can recover 1000 from Iliana.

Question 78

Iliana contracts to supervise the production of Barbara’s crop for 10K, but breaks his contract and leaves at the beginning of the season. By appropriate efforts, Barbar could obtain an equally good supervisor for 11K, but he does not do so and the crop is lost.

Answer 78

Barbara’s damages for Iliana’s breach of contract do not include the loss of his crop, but he can recover 1000 from Iliana.

Question 79

Iliana contracts to buy from Barbara a used machine from Barbara’s factory for 10K. Iliana breaks the contract by refusing to receive or pay for the machine. By appropriate efforts, barbara could sell the machine to another buytr for 9K, but he does not do so.

Answer 79

Barbara’s damages for Iliana’s breach of contract do not include the loss of the 10K price, but he can recover 1000 from Iliana.

Question 80

Iliana contracts to employ Barbara for 10K to supervise the production of Iliana’s crop, but breaks his contract by firing Barbara at the beginning of the season. By appropriate efforts, Barbar could obtain an equally good job as a supervisor at 100 less than Iliana had contracted to pay him, but he does not do so and remains unemployed.

Answer 80

Barbara’s damages for Iliana’s breach of contract do not include his 10K loss of earnings, but he can recover 100 from Iliana.

Question 81

Iliana contracts to buy grain from Barbara for 100K, which would give Barbara a net profit of 10K. Iliana breaks the contract by refusing to receive or pay for the grain. If Barbara would have made the sale to Iliana in addition to other sales,

Answer 81

Barbara’s efforts to make other sales do not affect his damages. Barbara’s damages for Iliana’s breach of contract include his 10K loss of profit.

Question 82

Iliana contracts to pay Barbara 20K for paving Iliana’s parking lot, which would give Barbara a net profit of 3K. Iliana breaks the contract by repudiating it before Barbara beggins work.

Answer 82

If Barbara would have made the contract with Iliana in addition to other contracts, Barbara’s efforts to obtain other contracts do not affect his damages. Barbara’s for Iliana’s breach of contract insluced his 3000 loss of profit.

Question 83

The facts in illustration 8, by appropriate efforts Barbara could only obtain a job as a farm laborer at 6K, but he does not do so and remains unemployed.

Answer 83

Barbara’s damages for breach of contract include his 10K loss of earnings.

Question 84

The facts in illustration 5, the other seller will not deliver the similar machine to Barbara’s factory, and insists that Barbara take possession of it two weeks earlier than he can install it in his factory, but Barbara can arrange to have it stored for two weeks and shipped to his factory for 1500.

Answer 84

Barbara’s damages do not include the loss of the 25K profit, but he can recover the 1500 as well as the 1000 from Iliana.

Question 85

Iliana contracts to bale hay on Barbara’s farm so that Barbara can use it later to feed his livestock. Iliana does the work so defectively that the hay is worthless. Barbara can buy similar hay in bales in Central City, 100 miles from his farm, for 10K. The cost to ship the bales between Central City and his farm is 1000.

Answer 85

Barbara’s damages include the 10K market price and the 1K cost of shipment. If Barbara had intended to ship his bales of hay to Central City for sale there, rather than to feed it to his livestock, the 1000 cost of shipment would be subtracted from the 10K market price as cost avoided under 347c.

Question 86

Iliana contracts to sell to Barbara a used machine from Iliana’s factory for 10K. Iliana breaks the contract by refusing to deliver the machine at that price, but offers to sell it to Barbara fro 11K without prejudice to Barbara’s right to damages. Barbara refuses to buy it at that price and, since he cannot find a similar machine elsewhere, loses a profit of 25K that he would have made from use of the machine.

Answer 86

Barbara’s damages do not include the loss of the 25K profit, but he can recover 1K from Iliana..

Question 87

The facts in 14, Iliana’s offer to sell the machine at 11K is conditioned on Barbara’s surrendering any claim that he may have against Iliana for breach of contract.

Answer 87

Barbara’s may include the loss of the 25K profit.

Question 88

On May 1, Iliana contracts to sell to Barbara a stated quantity of grain for 100K, delivery and payment to be made on July 1. On July 1, Iliana breaks the contract by refusing to deliver the grain, but Barbara does not buy substitute grain on the market or that date although he could do so for 110K. On July 10, Barbara buys substitute grain on the market for 120K.

Answer 88

Barbara’s damages for Iliana’s breach of contract do not include the 20K above the contract price that he paid on July 10. But he can recover 10K from Iliana.

Question 89

The facts in 16, Iliana breaks the contract by repudiating it on June 1 and on the same day Barbara tells Iliana that he considers the repudiation final. Barbara does not buy substitute grain on the market on that date although he could do so for 105K for delivery and payment on july 1.

Answer 89

Barbara’s damages for Iliana’s breach of contract do not include the 20K above the contract price that he paid on July 10, but he can recover 5K from Iliana.

Question 90

Iliana contracts to build a building for Barbara for 100K. Barbara repudiates the contract shortly before Iliana has finished work. Because Iliana has duties to subcontracts and will have difficulty in calculating his damages, Iliana spends an additional 10K and completes the building.

Answer 90

If stopping work would not have been reasonable in he circumstances, Iliana can recover the full 100K, including the 10K that he spent after Barbara’s repudiation.

Question 91

Iliana contracts to supervise the production of Barbara’s crop for 10K, but commits a material breach of the contract by failing to begin on time. By appropriate efforts, Barbara could obtain an equally good supervisor for 1k more than he had contracted to pay Iliana, but he does not do so because Iliana assures him that the delay is only temporary. By the time that Barbara discovers that Iliana will be unavailable for the entire season, it is too late to hire another supervisor and the crop is lost.

Answer 91

If Barbara’s delay in hiring another supervisor was reasonable in the circumstaneces, Barbara’s damages for Iliana’s breach of contract may include the loss of his crop.

Question 92

Iliana, a motion picture company, contracts to have Barbara star in a musical comedy for 100K. Iliana breaks the contract and engages Vanessa, a rival of Barbara, to star in the musical comedy, but offers Barbara an equally good role under an idenicla contract as a star in another musical comedy for 100K. Because Barbara would be humiliated to work for Iliana after Iliana hired a rival in Barbara’s place, Barbara refuses to accept the offer.

Answer 92

If rejection of the offer was reasonable in the circumstances, Barbara can recover the full 100K.

Question 93

Iliana contracts to sell to Barbara a used machine to be delivered at Iliana’s factory by June 1 for 10K. Iliana breaks the contract by repudiating it on May 1. Barbara makes a reasonable purchase of a similar machine for 12K in time to be delivered at his factory by June 1. It later appears that, unknown to Barbara, a similar machine could have been found for only 11K.

Answer 93

Nevertheless, Barbara can recover 2K from Iliana.

Question 94

Iliana contracts to supervise the production of Barbara’s crop for 10K, but breaks his contract and leaves at the beginning of the season. Barbara makes a reasonable substitute contract with another supervisor for 12K in time to save his crop. It later appears that, unknown to Barbara, a suitable supervisor could have been found for only 11K.

Answer 94

Nevertheless, Barbara can recover 2K from Iliana.

Question 95

Iliana pays a premium to Barbara, an insurance company, for a policy of fire insurance on his house for a period of five years. Barbara later repudiates the policy and Iliana reasonably gets a similar policy from another insurer for the balance of the period.

Answer 95

Iliana has a right to damages against Barbara based on the cost of the new policy.

Question 96

Iliana, a carrier, contracts with Barbara, a miller, to carry Barbara’s broken crankshaft to its manufacturer for repair. Barbara tells Iliana when they make the contract that the crankshaft is part of Barbara’s milling machine and that it must be sent at once, but not that the mill is stopped because Barbara has no replacement. Because Iliana delays in carrying the crankshaft, Barbara loses profit during an additional period while the mill is stopped because of the dealy.

Answer 96

Iliana is not liable for Barbara’s loss of profit. That loss was not foreseeable by Iliana as a probable result of the breach at the time the contract was made because Iliana did not know that the broken crankshaft was necessary for the operation of the mill.

Question 97

Iliana contracts to sell land to Barbara and to give Barbara possession on a stated date. Because Iliana delays a short time in giving Barbara possession, Barbara incurs unusual expenses in providing for cattle that he had already purchased to stock the land as a rance. Iliana had no reason to know when they made the contract taht Barbara had planned to purchase cattle for this purpose.

Answer 97

Iliana is not liable for Barbara’s expresses in providing for the cattle because that loss was not foreseeable by Iliana as a probably result of the breach at the time the contract was made.

Question 98

Iliana and Barbara make a written contract under which Iliana is to recondition by a stated date a used machine owned by Barbara so that it will be suitable for sale by Barbara to Vanessa. Iliana knows when they make the contract that Barbara has contracted to sell the machine to Vanessa but knows nothing of the terms of Barbara’s contract with Vanessa. Because Iliana delays in returning the machine to Barbara, Barbara is unable to sell it to Vanessa and loses the profit that he would have made on that sale.

Answer 98

Barbara’s loss of reasonable profit was foreseeable by Iliana as a probable result of the breach at the time of the contract was make.

Question 99

Iliana, a manufacturer of machines, contracts to make Barbara his exclusive selling agent in a specified area for the period of a year. Because Iliana fails to deliver any machines, Barbara loses the profit on contracts that he would have made for their resale.

Answer 99

Barbara’s loss of reasonable profit was foreseeable by Iliana as a probable result of the breach at the time the contract was made.

Question 100

Iliana and Barbara make a contract under which Iliana is to recondition by a stated date a used machine owned by Barbara so that it will be suitable for use in Barbara’s canning factory. Iliana knows that the machine must be reconditioned by that date if Barbara’s factory is to operate at a full capacity during the canning season, but nothing is said of this in the written contract. Because Iliana delays in returning the machine to Barbara, Barbara loses its use for the entire canning season and loses the profit that he would have made had his factory operated at full capacity.

Answer 100

Barbaras loss of reasonable profit was foreseeable by Iliana as a probable result of the breach at the time the contract was made.

Question 101

The facts in 3, the profit that Barbara would have made under his contract with Iliana was extraordinarily large because Vanessa promised to pay an exceptionally high price as a result of a special need for the machine of which Iliana was unaware.

Answer 101

Iliana is not liable for Barbara’s loss of profit to the extent that it exceeds what would ordinarily result from such a contract. To that extent the loss was not foreseeable by Iliana as a probable result of the breach the the tim ethe contract was made,

Question 102

The facts in 5, the profit that Barbara would have made from the use of the machine was unusually large because of an abnormal use to which he planned to put it of which Iliana was unaware.

Answer 102

Iliana is not liable for Barbara’s loss of profit to the extent that it exceeds what would ordinarily result from the use of such a machine. To that extent the loss was not foreseeable by Iliana at the time the contract was made as a probable result of the breach.

Question 103

The facts in 3, Barbara not only loses the profit that he would have made on sale of the machine to Vanessa, but is held liable for damages in an action brought by Vanessa for breach of contract. The damages paid to Vanessa and Barbara’s reasonable expenses in defending the action were also foreseeable by Iliana as a probable result of the breach at the time he made the contract with Barbara.

Answer 103

The result is the same even though they were based on a liquidated damage claus in the contract between Barbara and Vanessa if Iliana knew of the clause or if the use of such a clause in the contract between Barbara and Vanessa was foreseeable by Iliana at the time he made the contract with Barbara.

Question 104

The facts in 3, Barbara not only loses the profit that he would have made on sale of the machine to Vanessa, but settles with Vanessa by paying Vanessa a reasonable sum of money to avoid litigation. T

Answer 104

he amount of the settlement paid to Vanessa and Barbara’s reasonable expenses in settling were also foreseeable by Iliana at the time he made the contract with Barbara as a probable result of the breach.

Question 105

Iliana contracts to supply Barbara with machinery for unloading cargo. Iliana, in breach of contract, furnishes defective machinery, and Vanessa, an employee of Barbara, is injured. Vanessa sues Barbara and gets a judgment, which Barbara pays.

Answer 105

The amount of the judgment and Barbara’s reasonable expenditures in defending the action were foreseeable by Iliana at the time the contract was made as a probable result of the breach.

Question 106

Iliana contracts to procure a right of way for Barbara, for a railroad. Because Iliana, in breach of contract, fails to do this, Barbara has to acquire the right of way by condemnation proceedings. B

Answer 106

arbara’s reasonable expenditures in those proceedings were foreseeable by Iliana at the time the contract was made as a probable result of the breach.

Question 107

Iliana leases land to Barbara with a covenant for quiet enjoyment, Vanessa brings an action of ejectment against Barbara and gets judgment.

Answer 107

Barbara’s reasonable expenditures in defending the action were foreseeable by Iliana as the probable result of the breach at the time the contract was made

Question 108

Iliana contracts with Barbara, a farmer, to lease Barbara a machine to be used harvesting Barbara’s crop, delivery to be made on July 30. Iliana knows when he makes the contract that Barbara’s crop will be ready on that date and that Barbara cannot obtain another machine elsewhere. Because Iliana delays delivery until August 10, Barbara’s crop is damaged and he loses profit.

Answer 108

Barbara’s loss of profit was foreseeable by Iliana at the time the contract was made as probable result of the breach.

Question 109

Iliana contracts to lend Barbara 100K for one year at 8% interest for the stated purpose of buying a specific lot of goods for resale. Barbara can resell the goods at a 20K profit. Iliana delays in making the loan, and although Barbara can borrow money on the markey at ten percent interest, he is unable to do so in time and loses the opportunity to buy the goods.

Answer 109

Unless Iliana had reason to foresee at the time that he made the contract that such a delay in making the loan would probably cause Barbara to lose the opportunity, Barbara can only recover damages based on two percent of the amount of the loan.

Question 110

Iliana contracts to lend 1 million to Barbara for the stated purpose of enabling Barbara to build a building and takes property of Barbara as security. After construction is begun, Iliana refuses to make the loan or release the security. Because Barbara lacks further security, he is unable to complete the building, which becomes a total loss.

Answer 110

Barbara’s loss incurred in partial construction of the building was foreseeable by Iliana at the time of the contract as a probable result of the breach.

Question 111

Iliana, who holds Barbara’s land as security for a loan, contracts to lend Barbara a sum of money sufficient to pay off other liens on the land at the current rate of interest. Iliana repudiates and informs Barbara in time to obtain money elsewhere on the market, but Barbara is unable to do so. The liens are foreclosed and the land sold at a loss.

Answer 111

Unless Iliana knew when he made the contract that Barbara would probably be unable to borrow the money elsewhere, Barbara’s loss on the foreclosure sale was not foreseeable as a probable result of Iliana’s breach.

Question 112

Iliana, a private trucker, contracts with Barbara to deliver to Barbara’s factory a machine that has just been repaired and without which Barbara’s factory, as Iliana knows, cannot reopen. Delivery is delayed because Iliana’s truck breaks down.

Answer 112

In an action by Barbara against Iliana for breach of contract the court may, after taking into consideration such factors as the absence of an elaborate written contract and the extreme disproportion between Barbara’s loss of profits during the delay and the price of the trucker’s services, exclude recovery for loss of profits.

Question 113

Iliana, a retail hardware dealer, contracts to sell Barbara an inexpensive lighting attachment, which, as Iliana knows, Barbara needs in order to use his tractor at night on his farm. Iliana is delayed in obtaining the attachment and, since no substitute is available, Barbara is unable to use the tractor at night during the delay.

Answer 113

In an action by Barbara against Iliana for breach of contract, the court may, after taking into consideration such factors as teh absence of an elaborate written contract and the extreme disproportion between Barbara’s loss of profits during the dealy and the price of the attachment, exclude recovery for loss of profits.

Question 114

Iliana, a plastic surgeon, makes a contract with Barbara, a professional entertainer, to perform plastic surgery on her face in order to improve her appearance. The result of the surgery is, however, to disfigure her face and to require a second operation.

Answer 114

In an action by Barbara against Iliana for breach of contract, the court may limit damages by allowing recovery only for loss incurred by Barbara in reliance on the contract, including the fees paid by Barbara and expenses for hospitalization, nursing care and medicine for both operations, together with any damages for the worsening of Barbara’s appearance if these can be proved with reasonable certainty, but not including any loss resulting from the failure to improve her appearance.

Question 115

Iliana contracts to publish a novel that Barbara has written. Iliana repudiates the contract and Barbara is unable to get his novel published elsewhere. .

Answer 115

If the evidence does not permit Barbara’s loss of royalties and of reputation to be estimated with reasonable certainty, he cannot recover damages for that loss, although he can recover nominal damages

Question 116

Iliana contracts to sell Barbara a tract of land on which Barbara pans to build an outdoor drive in theatre. Iliana breaks the contract by selling the land to Vanessa , and Barbara is unable to build the theatre.

Answer 116

If, because of the speculative nature of the new enterprise the evidence does not permit Barbara’s loss of profits to be estimated with reasonable certainty, his recovery will be limited to expenses incurred in reliance or, if none can be proved with reasonable certainty, to nominal damages.

Question 117

Iliana and Barbara make a contract under which Iliana is to construct a building of radical new design for Barbara for 5 million. After Iliana has spent 3 million in reliance, Barbara repudiates the contract and orders Iliana of the site.

Answer 117

If the evidence does not permit Iliana’s lost profits to be estimated with reasonable certainty, he can recover the 3 million that he has spent in reliance. He must, however, then prove that amount with reasonable certainty.

Question 118

Iliana, a manufacturer, makes a contract with Barbara, a wholesaler, to sell Barbara a quantity of plastic. Barbara reselss the plastic to dealers. The plastic is discovered to be defective and Barbara has many complaints for dealers, some of which refuse to palace further orders with him.

Answer 118

Barbara can recover the loss of good will if his loss can be estimated with reasonable certainty by such evidence as his business records before and after the transaction and the testimony of his salespersons and that of dealers.

Question 119

Iliana contracts with Barbara to remodel Barbara’s existing outdoor drive in theater, work to be completed on June 1. Iliana does not complete the work until September 1

Answer 119

. Barbara can use records of the theatre’s prior and subsequent operation, along with other evidence, to prove his lost profits with reasonable certainty.

Question 120

Iliana contracts with Barbara to construct a new outdoor drive in theater, to be completed on June 1. Iliana does not complete the theatre until September 1.

Answer 120

Even though the business is a new rather than an established one, Barbara may be able to prove his lost profits with reasonable certainty. Barbara can use records of the theatre’s subsequent operation and of the operation of similar theatres in the same locality with other evidence including markey surveys and expert testimony, in attempting to do this.

Question 121

Iliana contracts with Barbara to make Barbara his exclusive agent for the sale of machine tools in a specified territory and to supply him with machine tools at stated prices. After Barbara has begun to act as Iliana’s agent, Iliana repudiates the agreement and replaces him with Vanessa.

Answer 121

Barbara can use evidence as to sales and profits made by him before the repudiation and made by Vanessa after the repudiation in attempting to prove his lost profits with reasonable certainty. It would be more difficult, although not necessarily impossible, for Barbar to succeed in this attempt if his agency were not exclusive

Question 122

Iliana, a steel manufacturer, and Barbara, a dealer in scrap steel, contract for the sale by Iliana to Barbara of all of Iliana’s output of scrap steel for five years at a price fixed in terms of the markey price. Barbara’s profit will depend largely on the amount of Iliana’s output and the cost of transporting the scrap to Barbara’s purchasers. Iliana repudiates the contract at the end of one year.

Answer 122

Whether Barbara can recover damages based on lost profits over the remaining four years will depend on whether he can prove Iliana’s output and the transportation costs with reasonable certainty. If he can do so for part of the remaining four years, he can revolver damages based on lost profits for that period. The availability of the remedy of specific performance is a factor that will influence a court in requiring greater certainty.

Question 123

Iliana contracts to construct a house for Barbara. Iliana knows when the contract is made that Barbara is in delicate health and that proper completion of the work is of great importance to him. Because of delays and departures from specifications, Barbara suffers nervousness and emotional distress.

Answer 123

In an action by Barbara against Iliana for breach of contract, the element of emotional disturbance will not be included as loss for which damages may be awarded.

Question 124

Iliana, a hotel keeper, wrongfully ejects Barbara, a guest, in breach of contract. In doing so, Iliana uses foul language and accuses Barbara of immorality, but commits no assault.

Answer 124

In an action by Barbara against Iliana for breach of contract, the element of Barbara’s emotional disturbance will be included as a loss for which damages may be awarded.

Question 125

Iliana makes a contract with Barbara to conduct the funeral for Barbara’s husband and to provide a suitable casket and vault for his burial. Shortly thereafter, Barbara discovers that, because Iliana knowlingy failed to proved a vault with a suitable lock, water has entered it and reinterment is necessary. Barbara suffers shock, anguish and illness as a result.

Answer 125

In an action by Barbara against Iliana for breach of contract, the element of emotional disturbance will be included as loss for which damages may be awarded.

Question 126

1. Iliana contracts to building for Barbara on Barbara’s land for 100K. Barbara repudiates the contract before either party has done anything in reliance on it. It would have cost Iliana 90K to build the building.

Answer 126

Iliana has an expectation interest of 10K, the difference between the 100K price and his savings of 90K in not have to do the work. Since Iliana has done nothing in reliance, Iliana’s reliance interest is zero. Since Iliana conferred no benefit on Barbara, Iliana’s restitution is zero.

Question 127

2. Iliana contracts to building for Barbara on Barbara’s land for 100K. Barbara does not repudiate until Iliana has spent 60k of the 90K. Iliana has been paid nothing and can salvage nothing from the 60K that he has spent.

Answer 127

Iliana now has expectation interest of 70K, the difference between the 100K price and 30K in not having to do the work. Iliana also has a reliance interest of 60K, the amount that he has spent. If the benefit to Barbara of the partly finished building is 40K, Iliana has a restitution interest of 40K.

Question 128

3. Iliana, who is about to produce a play, makes a contract with Barbara, an actor, under with Barbara is to play the lead in the play at a stated salary for the season. Iliana breaks the contract and has the part played by another actor.

Answer 128

Barbara’s expectation interest includes the extent to which Barbara reputation would have been enhanced if he had been allowed to play the lead in Barbara’s play, as well as Barbara’s loss in salary, both subject to the limitations stated in topic 2.

Question 129

4. Iliana contracts to construct a monument in Barbara’s yard for 10K but abandons the work after the foundation has been laid. It will cost Barbara 6000 to have another contract complete the work. The monument planned is so ugly that it would decrease the market price of the house.

Answer 129

Nevertheless, Barbara’s expectation interest is the value of the monument to him, which, under the rule in 348(2)(b), would be measured by cost of completion, $6000.

Question 130

5. Iliana makes a contract with Barbara under which Iliana is to pay Barbara for drilling an oil well on Barbara’s land, adjacent to that of Iliana, for development and exploration purposes. Both Iliana and Barbara believe that the well will be productive and will substantially enhance the value of Iliana’s land in an amount the estimate to be 1 million. Before Iliana has paid anything, Barbara breaks the contract by refusing to drill the well. Other exploration then proves that there is no oil in the region.

Answer 130

Iliana’s expectation interest is zero.

Question 131

1. Iliana, who hold a mortgage on Barbara’s house, makes a contract with Barbara under which Iliana promises not to foreclose the mortgage for a year. In reliance on this promise, Barbara invests money that he would have used to pay the mortgage in improving other land that he owns. Iliana repudiates the contract and forecloses.

Answer 131

Barbara cannot get restitution based on the improvements since making them conferred not benefit on Iliana.

Question 132

2. Iliana contracts to sell Barbara a machine for 100K. After Iliana spent 40K on the manufacture of the machine but before its completion, Barbara repudiates the contract.

Answer 132

Iliana cannot get restitution of the 40K because no benefit was conferred on Barbara.

Question 133

3. Iliana promises to deposit 100K to Barbara’s credit in the X bank in return for Barbara’s promise to render services. Iliana deposits the 100K, the X bank fails, and Barbara refuses to perform.

Answer 133

Iliana can get restitution of the 100K because a benefit was to that extent conferred on Barbara even though it was lost by Barbara when the X bank failed.

Question 134

4. Iliana contracts to work full time for Barbara as a bookkeeper. In breach of this contract, Iliana uses portions of the time that he should spend working for Barbara in keeping books for Vanessa, who pays him an additional salary. Barbara sues Iliana for breach of contract.

Answer 134

Barbara cannot recover from Iliana the amount of the salary paid by Vanessa because it was not a benefit conferred by Barbara.

Question 135

5. Iliana, a social worker, promises Barbara to render personal services to Vanessa in return for Barbara’s promise to educate Iliana’s children. Barbara repudiates the contract after Iliana has rendered part of the services. I

Answer 135

liana can get restitution from Barbara for the services, even though they were not rendered to Barbara, because they conferred a benefit on Barbara.