Page 58 Flashcards
When are nominal damages given?
If the aggrieved party hasn’t suffered any actual damages, usually anything from a dollar or below is given to show vindication of the wrong
What are non-compensatory damages?
Nominal damages and punitive damages
What are the two reasons that nominal damages might be given?
- to establish a precedent
- if substantial damage has probably occurred but can’t be actually established
What are punitive damages for in contacts?
Punishing malicious, willful, and wanton conduct and to deter others
What is rescission?
An order that says parties are no longer contractually obligated to each other
What is quantum meruit?
Payment to restore the service providing party to the status quo at the time of breach
Why can’t you sue for quantum meruit if performance is complete?
Because that would mean suing for damages
What is an example of quantum meruit?
Hiring someone to paint your house for $5000, and when he’s just about finished you tell him to leave. The value of his work at that point was $7000. He will be given $7000 because he recovers the value of the benefit conferred.
If the reason for stopping performance is one in good faith, does that mean the defendant doesn’t owe quantum meruit?
No, he still owes the value of the work performed
What is a third-party contract?
When the performance/benefit is given to someone that isn’t a party. The third-party stands in the shoes of the contracting party, is expressly named as a third-party beneficiary, and performance runs directly to him.
A third-party must have been what in order for third-party contract to be valid?
Contemplated when the contract was made
What is a classic example of a third-party contract?
Life insurance where the policyholder and the company enter a contract, but the benefit goes to a third-party
What does a contract need in order for it to be a TPB contract?
One promise whose benefit goes to a third-party
Is it possible to have more than one third-party beneficiary in one contract?
Yes
Even though someone is a third-party beneficiary, why might he not have a claim against the promisor?
Because his rights come from the contract between the original contracting parties
What are the key steps in TPB situations?
- label the parties
- consider defenses
- look at vesting
What are the two different views on TPB situations?
- CL: not enforceable because third-party had to have given consideration and been in privity
- Modern: TPB can sue
What are the two different views on TPB contracts?
- majority: R1
- minority: R2
Under the majority view for TPB contracts, what is the approach?
Classify the TPB as either:
- donee beneficiary
- creditor beneficiary
- incidental beneficiary
What is a donee beneficiary under the first restatement view of TPB?
Promisee intends to give plaintiff a gift (either a promise or to confer a right on him). Gives donee a direct claim against the promisor
Under third-party beneficiary contract, what are the three major parties?
- promisor: usually the defendant or the person that enforcement is sought against
- promisee: person making the promise
- plaintiff: the alleged beneficiary or the person getting the benefit
Does the promisee under a donee beneficiary situation owe a duty to the beneficiary?
No
If a promise is to make a gift to a TPB, is it OK if the primary purpose was a gift, but that wasn’t the only purpose?
Yes
If you see your lawyer to make a will and leave everything to your husband, what kind of beneficiary is the husband considered?
Donee, even though the services given are between you and the lawyer
Must a beneficiary be identified at formation of the TPB contract?
No, he just has to be identifiable when performance is due.
