Pg 49

Question 1

What are the remedies for a breach of a land sale contract?

Answer 1

– Either affirm the contract and seek damages
– Or rescind the contract and seek restitution
- specific performance

Question 2

If there is a liquidated damages clause in a land sale contract, what is the remedy for a breach?

Answer 2

The liquidated damages are the exclusive remedy

Question 3

How do courts treat artificially high liquidated damages versus disproportionately low ones?

Answer 3

They often enforce the low ones and reject the high ones

Question 4

What are two different types of liquidated damages?

Answer 4

• prospective: at the time of contracting you cannot determine the damages
  – retrospective: after the breach you look at the damages based on what the property actually sold for, and what the actual damages were

Question 5

What are the elements that must be met in order to have a proper liquidated damages clause?

Answer 5

– Actual harm
– the parties must stipulate to the clause and the contemplated damages must come from failure
– damages must be difficult to determine or indeterminate
– damages must be reasonably proportionate to the parties’ contemplation
– the clause cannot be a penalty, so it cannot be unreasonably large

Question 6

What are the damages that are given in the case of a breach of a land sale contract?

Answer 6

The standard measure is the loss or benefit of the bargain. This is the difference between the contract price and the market value at the date of breach

Question 7

If you contract to sell land for $100, and the land is worth $120 at the time that the seller breached, what does the buyer get as a remedy?

Answer 7

He gets $20 because that is the difference between the contract price and the market value at the date of breach

Question 8

If you contract to sell land for $100, and the land is worth $120 at the time that the buyer breached, what does the seller get as a remedy?

Answer 8

The seller would get nothing because he did not lose any profit on the transaction. But if the land was only worth $80 at the breach, the seller would get $20

Question 9

What is the only time that money damages are adequate when there has been a land sale contract breach?

Answer 9

They are only adequate when the buyer breaches and just wants money.

Question 10

What happens to the earnest money that is paid at the time of entering a land sale contract if the buyer defaults?

Answer 10

• majority: it is considered forfeited if actual damages would be difficult to measure and the liquidated sum is a reasonable estimate at the time of entry
  – minority: does not allow forfeiture and gives buyer as much of the deposit as exceeds the seller’s actual damages

Question 11

If a seller does something that constitutes a partial breach for a land sale contract, what can the buyer do?

Answer 11

• can avoid the contract and sue for total breach

- can proceed with the transaction and claim damages to compensate for a partial breach

Question 12

What is necessary for a person to get special damages when there has been a land sale contract breach?

Answer 12

Foreseeability and the damages must have been contemplated at the time of contract

Question 13

What is specific performance?

Answer 13

When the court orders of breaching party to carry out the contract

Question 14

What is the only time that specific performance is allowed?

Answer 14

If the remedy at law is inadequate and no other remedy will do

Question 15

What is the rationale behind specific performance in the case of a breach of a land sale contract?

Answer 15

Each land parcel is unique, so there is no other exact substitute available. This means that damages are in adequate per se

Question 16

If specific performance cannot provide a full remedy for the breach of a land sale contract, what happens?

Answer 16

Incidental damages can be given too

Question 17

Specific performance and general damages are considered what kind of remedies?

Answer 17

Alternative remedies, so you cannot have both of them in a land sale breach

Question 18

When does laches apply for a land sale breach?

Answer 18

The claim is barred if too much time has elapsed between when the suit could be brought and when it was actually brought, and the delay prejudices the one that is burdened by the promise. This essentially bars an action when it would no longer be fair under the circumstances.

Question 19

What is restitution?

Answer 19

A judicial order that compels the defendant to return the value of performance he receives to the plaintiff in order to put the plaintiff in the pre-contract position.