Other Money Damages, Specific Performance, Third Parties Flashcards
Define reliance damages
To put a party in the same economic position that it would be in if the contract had never been created
Ask what loss has the plaintiff incurred that would never have taken place but for the breached contract
True or false: A party cannot recover both reliance and expectation damages
True.
Define restitution damages
Give the plaintiff an amount equal to the economic benefit that the plaintiff conferred on the defendant.
This can sometimes equal reliance damages, but it need not.
How are liquidated damages determined?
Stated in the contract as an explicitly negotiated amount due upon breach
Will courts allow for liquidated punitive damages?
Yes, IF
1) 1) The amount of liquidated damages was reasonable at the time of contracting AND
2) Actual damages from breach would be uncertain in amount and difficult to prove.
Are punitive damages common in contract law cases?
Punitive damages are almost never allowed in contract law.
Don’t worry about these unless you see a breach that also seems like a tort (e.g., fraud or some other extreme situaiton)
Under what circumstances would a court order specific performance as a remedy for contract breach?
Specific performance = Awarded only when monetary damages are considered inadequate for some reason.
Available for real estate transactions (CL) or unique goods (UCC)
True or false: Specific performance is available for service contracts
False. Rarely, a court might grant an injunction prohibiting a breaching party from performing similar services for a competitor for a reasonable period of time/place.
Define right of reclamation
Right of reclamation—arises when an unpaid seller tries to reclaim goods that were sold on credit when the buyer is insolvent
What are the parties in a third-party beneficiary contract?
1) Promisor: the person making the promise that the outsider is trying to enforce
2) Promisee: a contractual counterparty to that promise; this person could presumably enforce the contract, but is not doing so.
3) Third party beneficiary: Outsider suing the promisor for breach.
Why does it matter whether a third party beneficiary is intended or incidental?
Intended = right to sue
Incidental = no right to sue
How is a creditor beneficiary created?
When the promisee strikes a deal with the promisor in order to repay some earlier debt to the third party.
What is a donee beneficiary?
A donee beneficiary arises when there is no preexisting obligation, but the promisee clearly intends to confer a gift of enforcement on a third party.
At what point does a third party gain enforcement rights through vesting?
1) the beneficiary detrimentally relied on the rights;
2) the beneficiary mainifests ascent to the contract; and
3) the beneficiary filed a lawsuit to enforce the contract
True or false: In a third party beneficiary scenario, the promisor can assert any contract defense against the third party that he would be entitled to assert against the promisee?
True
