Page 54 Flashcards
What are buyer expectation remedies?
- cover
- market price recovery
- breach of warranty
If a buyer gets cover: a reasonable substitute for the goods without unreasonable delay, what is the remedy?
The difference between what the plaintiff should have paid and what he did pay
What is the expectation remedy “market price recovery”?
The difference between the market price at the time of the agreed delivery, and the price of the contract
What can the buyer recover if there is a breach of warranty?
The difference between the value of the goods as warranted and the value of the goods the buyer actually got. Ie: if P contracts for a 2016 car and pays $2000, but the car is only a 2015 car and worth $1500, he can get $500 in damages
Consequential damages are only available when what has happened?
The breaching party knew or should’ve known about the circumstances (reasonably foreseen at formation)
What is an example of consequential damages?
When a store’s cash register system breaks down and they have to close for the day, the money they lost in closing is a consequential damage
What are the three limitations on getting damages?
- need reasonable certainty
- must be foreseeable
- mitigation
The rule that damages must be established with reasonable certainty means that what things will not be covered?
Anything spectacular, remote, imaginary, contingent, just possible, and mental distress/emotional distress will not be covered
Damages are limited to losses that were foreseeable when?
At the time of contracting
When are special damages possible?
If a special circumstance resulted in an unusual injury, the plaintiff can recover it if defendant knew or should’ve known about the special circumstance at the time of entering the contract
What is mitigation principle?
The victim of a breach can’t let economic losses pile up and then force the breaching party to pay them. He must use reasonable efforts to try to reduce or avoid the loss (act in good faith).
What is the efficient breach theory?
Promisor can breach if he leaves the promisee as well off afterward as he would’ve been if the promise was performed (like pays expectation damages). Ie: breacher stood more to gain by breaching than performing. Rationale: encourages maximization of resources
Modernly how is the efficient breach theory viewed?
It has been retreated from and opportunistic breaches are harshly denounced
What are the damages that are given for lost volume sales?
Because the seller had an unlimited supply, even though he sold that exact item that was reneged upon to someone else, he lost two sales instead of one. Damages are that the seller is allowed to recover the profit on the lost volume sale
Are punitive damages allowed in contract?
Not usually with the exception of a breach of good faith, then they can be collected. Ie: insurance company refuses to settle in bad faith
