IGNORE- SEE REMEDIES BELOW -Remedies for unexcused nonperformance

Question 1

Nonmonetary remedies

Answer 1

Specific performance/ injunction

Question 2

Specific performance/ injunction

Answer 2

USUALLY AVAILABLE ONLY IF remedy at law not enough AND π has superior equity
Remember “he who seeks equity must do equity.”

i. Contracts for sale of real estate allow specific performance because money is not a substitute for land.
2. But if Seller breaches by selling to another, a bona fide purchaser.–> Buyer cannot get specific performance
a. this means buyer’s equity is not the superior equity, because the other BFPis not at fault

ii. Contrct for sale of goods. Unique goods: antiques, art, custom-made or other appropriate circumstances.
Can force specific performance, BUT he who seeks equity must do equity
1. for ex if you lied when buying and you said you were buying for museum but you were really buying to make huge profit- your hands arent clean and you wont recover

iii. Contract for services: No specific performance,possible injunctive relief
1. for ex. cant force people to work if they breach labor k.
2. BUT! you can get injunction against people prohibiting people from working for competitors

Question 3

Seller’s right of reclamation from an insolvent buyer

Answer 3

Unpaid seller may get its goods back if:

1) buyer was insolvent when it RECEIVED the goods
2) buyer, before delivery, told seller he was solvent
3) seller demands return of goods within 10 days of receipt/ within reasnable time
4) buyer still has goods at time of demand

Question 4

Entrustment remedies

Answer 4

1. this is under the UCC
   i. Owner leaves goods for repair/cleaning/storage with a merchant. Later a BFP buys the goods.

Owner’s remedy –> conversion against the merchant.

Question 5

Damages overview (legal remedies)

Answer 5

i. Policy: compensate the π, NOT punish the ∆
iii. Damages Generally= expected profit + costs spent

Steps

1. Expectation: Breaching party must put the non-breaching party in the same position as if there hadn’t been a breach
2. PLUS Incidental: costs incurred in dealing with the breach, always recoverable
3. PLUS Consequential: EITHER the kind of loss anyone would sustain OR those that aires from π’s special circumstances, ( if the breaching party would have known the special position)
4. MINUS Avoidable : subtract losses π could have avoided without undue burden (shouldn’t continue performance, shouldn’t turn down comparable opportunities)
5. MINUS Certainty : no recovery for damages that are not reasonably certain (new business for ex.) If too uncertain–> give out-of-pocket expenses
6. Reliance: if expectation damages are too uncertain, use reliance damages. allows recovery of out of pocket expenses for uncertain expectation damages and promissory estoppel
7. Liquidated: k provisions fixing amount of damages, must be reasonable forecast and not a penalty.
8. BREACHING PARTY DOESN’T GET ANYTHING, EVEN IF THE NON-BREACHING PARTY WAS UNJUSTLY ENRICHED

Question 6

Rule for monetary damages for sale of goods

Answer 6

1. Damages for seller’s breach:
   a. Seller breaches, buyer keeps the goods –
   i. FMV if perfect- FMV as delivered
   ii. OR
   iii. Cost of repair

b. Seller breaches, seller has the goods
i. Market price at time of discovery of the breach – k price
ii. OR

iii. reasonable replacement price – k price
iv. Whichever is greater.

2. Damages for buyer’s breaches

a. Buyer breaches, buyer keeps the goods
i. K price

b. Buyer breaches, seller has the goods
i. (contract price – resale price) + provable loss profits
ii. if seller cannot resell, recovery is the k price

c. If seller loses volume: provable loss profits for volume sellers are also iven
i. Seller must have access to unlimited supply of the goods

Question 7

Liquidated damages

Answer 7

i. a k provision that fixes amount of damages. Issue will be validity: concern is whether the provision is too high and masking as a penalty
1. CANT have penalty damages for breach.
2. CAN have liquidated damages clause where parties stipulate what damages are to be paid if there’s a breach
ii. Tests are
1) damages were hard to forecast when k made 2) the provision is a reasonable forecast.
a. if the damages is a fixed number, this triggers reasonable forecast concern. must be a range or a formula to not be suspect.

Question 8

Recission

Answer 8

i. remedy whereby original k is voidable and rescinded. Parties left as if no k has ever been made. The grounds for recission must have occurred either before or at the time the k was entered into. Grounds are
1. mutual mistake of material fact
2. unilateral mistake if the other party knew or should have know of the mistake
3. unilateral mistake if hardship by the mistaken party is so extreme that it outweighs the other party’s expectations under the k
4. misrepresentation of fact or law by one party that was relied upon
a. duress, undue influence, illegality, lack of capacity, failure of consideration
ii. all equitable defenses are available. π negligence is not a defense.
iii. If π has paid money to ∆, may be restitution in addition to recission.

Question 9

Reformation

Answer 9

– writing is changed so it conforms to original intent of the parties

i. Grounds
1. mistake—variance bw original agreement and writing
2. misrepresentation—

ii. Negligence not a bar to reformation.

iii. Clear and convincing evidence standard—variance between agreement and writing must meet clear and convincing standard
iv. PE does not apply – mistake/ misrepresentation is one of the exceptions

SOF also doesn’t apply, even if the resulting k is within the SOF!!– we dont want people to get away with SOF defense bc of mistake or misrepresentation

v. Defenses—
1. reformation would not be equitable
2. a bona fide purchaser exists
3. not allowed if the rights of 3ps will be harmed

Question 10

SOL under UCC

Answer 10

i. for sales k—UCC gives 4 year SOL. can shorten by agreement to no less than 1 year, maynot lengthen period.
ii. begins to run when a breach occurs. Doesn’t matter if the aggrieved knew about the breach.

iii. For breach of warranty—SOL starts running upon delivery.
iv. IF the warranty covers future performance, SOL doesn’t run until buyer should have discovered breach
.
v. Implied warranties (merchantability and fitness for particular purpose) don’t extend to future performance, so they are breached upon delivery.