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Contracts > If there was inexcusable non-performance, what are the non-breaching party's remedies? > Flashcards

If there was inexcusable non-performance, what are the non-breaching party's remedies? Flashcards

1
Q

Breach

A

any deviation from promised performance, no matter how slight

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2
Q

How does a party repudiate?

A

Unambiguous indication that breach will result when it becomes time to perform

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3
Q

When is retraction of repudiation allowed?

A

Until contract is due or

Until is relied upon

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4
Q

Effect of retraction of repudiation

A

Reimposes duty to perform

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5
Q

Types of nonmonetary remedies

A
  1. Specific performance
  2. Reformation
  3. Reclamation (UCC)
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6
Q

Specific performance

A

Courts force parties to complete contract

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7
Q

What kind of remedy is specific performance?

A

Equitable

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8
Q

What must be proven for specific performance to be used?

A
  1. Legal remedy is inadequate
  2. Courts will not be unduly burdens by enforcement of specific performance
  3. Contract must be certain and definite
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9
Q

Can specific performance be used in land sales?

A

Yes, often will be

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10
Q

Can specific performance be used in sale of goods?

A

Not usually

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11
Q

When can specific performance be used in a sale of goods?

A

Goods are unique or no cover contract is available

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12
Q

Can specific performance be used in personal services contracts?

A

No, violates 13th amendment and difficult burden for courts to enforce

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13
Q

Reformation

A

court will change/rewrite a contract so it says what parties thought it said

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14
Q

Uses of reformation

A
  1. Issues in writing (clerical errors, omissions)

2. Fraudulent misrepresentation about what was in contract upon which seller relied

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15
Q

Reclamation

A

right of unpaid seller to get her goods back (UCC)

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16
Q

Elements of reclamation

A
  1. credit sale
  2. buyer insolvent at time of delivery
  3. seller must demand goods back within 10 days of delivery
  4. buyer must still be in possession of goods
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17
Q

What damage is available when buyer has goods and buyer breaches? Measured?

A

Reclamation
Damages for defective goods
= contract price plus incidental damages minus expenses saved because of breach

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18
Q

What damages are available when buyer has goods and seller breaches? Measured?

A

Reclamation
Damages for repudiation, wrongful rejection/revocation
= value of promised goods minus value of accepted goods plus incidental and consequential damages

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19
Q

What are damages for lost volume seller?

A

Profit

20
Q

What are damages for specialized goods?

A

Contract price

21
Q

Types of monetary damages

A
  1. UCC (seller has goods)
  2. Expectation
  3. Reliance
  4. Nominal
  5. Liquidated
  6. Restitution
22
Q

UCC damages when seller has goods and seller breaches

A
  1. Buyer covers: cover price minus contract price plus incidental and consequential damages minus expenses saved because of breach
  2. Buyer doesn’t cover: market value minus value of accepted goods plus incidental and consequential damages
  3. Equitable relief: specific performance for unique goods only
23
Q

When is equitable relief available for seller with goods, and seller breaches?

A

Specific performance for unique goods only

24
Q

Expectation damages

A

Put aggrieved party in position if contract had been performed

25
Q

Expectation damages equation

A

= loss in value of bargain expected
+ other incidental/consequential loss
- loss avoided in not performing contract

26
Q

What three factors are necessary for expectation damages?

A
  1. Reasonably certain
  2. Foreseeable
  3. Unavoidable
27
Q

New business’s expectation damages (traditional/minority view)

A

Lost profits not recoverable

28
Q

New business’ expectation damages (majority view)

A

Lost profits recoverable if proved with reasonable certainty

29
Q

Incidental

A

Naturally arising = damages incurred in ascertaining and trying to prevent breach

30
Q

What do incidental damages never include?

A

Attorney’s fees

31
Q

What is required to recover consequential damages?

A

Damages were made foreseeable/known at time of contracting

32
Q

Unavoidable

A

Duty to mitigate = damages are not collectable if could have been avoided without undue burden, risk or humiliation

33
Q

Reliance damages

A

reimbursing for detriment incurred before contract was made

34
Q

When are reliance damages used?

A
  1. Expectation measure is uncertain/speculative

2. Promissory estoppel (gift promise)

35
Q

When are punitive damages allowed?

A

Only when conduct constituting breach is also a tort for which punitive damages are recoverable

36
Q

Are punitive damages capped?

A

Yes, generally capped at single digit ratio

37
Q

When are nominal damages used?

A

Definite breach caused uncertain or minimal economic loss

38
Q

Liquidated damages

A

Parties remedy themselves in contract

39
Q

When are liquidated damages not enforced?

A

When it’s actually a penalty

40
Q

Test for whether clause is for liquidated damages (not penalty)

A
  1. Reasonable forecast of just compensation in light of anticipated or actual loss
  2. For harm that is difficult to measure
41
Q

Restitution

A

quasi-contractual relief/quantum meruit

42
Q

What is the purpose of restitution?

A

Prevents unjust relief

43
Q

Elements of restitution

A
  1. Benefit conferred upon other party (not detrimental reliance)
  2. At express/implied request of party receiving benefit
  3. With reasonable expectation of compensation
  4. Where unjust enrichment results (core element)
44
Q

What is the core element of restitution?

A

Unjust enrichment results

45
Q

How is restitution measured?

A

Value of benefit conferred = value saved by not having to perform

46
Q

UCC damages when seller has goods and buyer breaches

A
  1. If resold by seller: contract minus resale price plus incidental damages minus expenses saved because of breach
  2. If not resold by seller: contract price minus market value plus incidental damages minus expense saved because of breach
  3. Lost volume seller: lost profits because of breach plus incidental damages minus expenses saved because of breach
  4. Specialized goods: contract price

Contracts (7 decks)

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