Lecture 10 Flashcards
Courts often grant specific performance of a land sale contract where the seller has not yet conveyed and it is the buyer who breaches
No specific performance for a contract of personal services
Court grants injunction under employment contract for preventing an employee to work for a competitor
The employer must show that the employee services are unique or extraordinary and the likely result will not be to leave the employee without other reasonable means of making a living
Specific performance will be granted in output and requirements contract where the item is not in ready supply and no other vendor will enter a similar fixed price long term
Specific performance for unique or unusual goods
When reliance is protected the P does not recover any part of the profits he would have made on the contract had it been completed
Expectation damages formula
Contract price - whatever benefits P has received from not having to complete his own performance
Breaching supplier of services
Contractor-owner contract.
Contactor starts to perform and then defaults. When owner hires someone else to complete the project,the measure of damages is contract price - (sum paid to contractor) + (sum paid or owed to replacement)
If the formula yields a negative number ie owner has had a worst result than had the contract been performed the market value of the work done by contractor before default will be irrelevant
Anticipatory repudiation by recipient of services
If the repudiation occurs before the contractor has started performance or even made expenditures in preparation to perform - expectation damages or the profits contractor would have made had the contract been perfon both sides
If contractor made reliance expenditures - reliance expenditures+ anticipated profit
BUT IF EXPENDITURES HAPPENED AFTER THE CONTRACTOR KNEW THEY WILL NOT BE ADDED TO THE RECOVERY
Economic waste is rare on mbe.
P will be entitled to the cost of remedying the defect and will not be limited to the loss of market value
The P does not have to even prove the loss in market value
The reasonable certainty requirement may fail to be met where the P cannot show what his cost of completion would have been
In such case he would have to be content with reliance or restitution damages
Breaching seller of property
Difference between the contract price and the (higher) market price if any at the time of the seller’s breach
Reliance damages
Subtract amount of loss - if P would have lost money on the competed contract, most courts say his reliance recovery cannot put him in a better position than expectation damages would have put him.
Cannot recover as reliance damages expenditures made before the contract was signed
A party who substantially performs may sue for expectation damages for breach of contract if the other fails to perform. The other party has a set of or counterclaim for the damages he has suffered from the P failure to completely perform
Divisible contracts- a party who has substantially performed one of the parts may recover on the contract for that part. Even though he has materially breached with respect to the other portions
UCC gives partial restitution to breaching buyer with respect to any deposit made to the seller before the buyer breached. The seller can only keep 20 percent of the total contract price or $500 whichever amount is smaller. The balance must be refunded to the breaching party
Exception - if seller can orove actual damages the seller can offset those damages
Quasi contract recovery in construction cases
Breaching builder will get the lesser of the amount by which the value of the owners property has been increased and the reasonable cost to the owner
Construction
Breach by the owner
The builder recovers :
Before the construction - lost profits
During the construction - profits + costs
After the construction - contract price + interest
Breach by the builder
The owner recover :
Before the builder has started - the cost to get the job completed by someone else above the contract price + reasonable compensation for the delay
After the builder has started- the cost to get the job completed by someone else above the contract price + reasonable cost of delay
If the builder is late in performing the damages are the losses incurred
When there has been substantial performance of the contract and the cost of the replacement or completion would be disproportionately high compared to the economic benefit it confers, courts will measure damages by the difference between the value of the property if construction had been properly completed and the value as constructed
