Pg 5

Question 1

If a buyer accepts nonconforming goods, what is the remedy?

Answer 1

He gets the difference between the value as promised and the value of the goods as accepted

Question 2

What do you do if a seller has breached under a contract for the sale of goods and the goods fluctuate in value?

Answer 2

Damages are calculated at the time the buyer learns about the breach.

Question 3

If a good increases in value a lot after a seller has breached a contract for the sale of goods, is the breaching party required to foresee the amount of lost profits at the time that they entered the contract?

Answer 3

No, only that some profits could be lost as a consequence of non-performance. The breaching party should’ve understood the risk of contracting to sell an item at a fixed price knowing that the market price could change dramatically based on supply and demand. When parties bargain for fixed price contracts, each assumes the risk of market price fluctuation.

Question 4

What is the new business rule with regard to a seller breaching a contract for the sale of goods?

Answer 4

– CL: new businesses don’t have a baseline or a record of profitability, so you cannot sue for lost profits because there is no ability to have reasonable certainty about the losses
– modernly: you can recover lost profits by showing sufficient evidence. This can include things like: profits of another business that operated in the same area, expert economic analysis, profits that the defendant got from destroying the plaintiffs business, etc.

Question 5

What are the elements that you have to prove under the new business rule modern approach in order to get damages if a seller breaches a contract for the sale of goods?

Answer 5

• must persuade the court that the new business’ damages were caused by the defendant’s wrongdoing
  – they were foreseeable
  – established with reasonable certainty

Question 6

What is the damages if a buyer breaches a contract for the sale of goods?

Answer 6

Contract price minus market price

Question 7

What is the rationale behind giving damages to a seller if a buyer breaches a contract for the sale of goods?

Answer 7

The seller expected to sell those goods to the buyer, and to get the contract price for them, so now he still has the goods, which means he is out the difference between the contract that the buyer agreed to pay and the market price of the goods that he still has.

Question 8

If a buyer agreed to buy a car for $5000 and then breached, and the market value of the car is $4000, what would the seller get?

Answer 8

The contract price minus the market price, so that would be $1000

Question 9

If a buyer breaches a contract for the sale of goods, can the seller get consequential damages, lost profits, or reasonable overhead?

Answer 9

He cannot get consequential damages, but he can get lost profits and reasonable overhead if the ordinary measure of damages is inadequate to put him in as good a position as performance. He could also get incidental damages minus expenses saved

Question 10

If a buyer breaches a contract for the sale of goods anticipatorily, what is the question you have to ask?

Answer 10

If the goods have been made or not. If a portion of the goods were made and a portion weren’t made, then discuss both categories.

Question 11

If there has been an anticipatory breach by the buyer for a contract for the sale of goods, and the goods were already made, what happens?

Answer 11

The seller gets the difference between the market price at tender and the unpaid contract price, plus incidental damages

Question 12

If there is an anticipatory breach by the buyer for a contract for the sale of goods and the goods have not yet been made, what happens?

Answer 12

The seller gets the lost profits on those goods

Question 13

If there is a breach by a buyer for a contract for the sale of goods, and the seller manages to resell the goods, what does the seller get?

Answer 13

The difference between the contract price that the buyer agreed to pay for the goods and the resale price. As long as the resale was made in good faith, took place at a commercially reasonable manner, and occurred reasonably soon after the buyer’s breach

Question 14

If there is a contract to buy a car for $5000 and the buyer breached, then the seller sold the car for $4500 to someone else, what can the buyer be liable for?

Answer 14

The $500 difference

Question 15

If after there has been a breach by the buyer for a contract for the sale of goods, the market price is higher than the contract price was or the seller managed to sell the goods for more than the contract price, what happens?

Answer 15

The seller is not considered to be harmed, so no award is given

Question 16

What is the lost volume seller rule with regard to a buyer breaching a contract for the sale of goods?

Answer 16

When the seller is in the business of selling goods of a certain kind with a fairly unlimited supply of those goods, then if he loses out on a sale, he gets the lost profit that he would’ve made on that sale. He just has to show that he was able to supply both contracts and he probably would’ve made the second sale.

Question 17

If a car dealership contracts to sell a car for $25,000, but the buyer breaches, and the dealership sells that car to someone else, what happens?

Answer 17

They are considered to be a lost volume seller, so they should have been able to sell both of the cars because they have an unlimited supply. Because they only sold one car, they lost out on the profit that they would have made, so they recover the lost profit from the buyer

Question 18

What happens in a situation where there is a breach by the buyer for a contract for the sale of goods, and there is no market available for those goods?

Answer 18

The seller gets the full market price for the goods produced

Question 19

If a seller was making commemorative coins, and a buyer contracted to buy specially designed coins for his family, but then breached, what happens?

Answer 19

Because the seller cannot sell those goods since there’s no market for them, he would get the full market price for the goods (which is the full contract price)

Question 20

If there is a land sale contract and the buyer breaches, what does the seller get?

Answer 20

The contract price minus the market price. Remember that the seller only suffers damages if he was selling the property for higher than the market value. If he was selling at market value or lower, then he was not damaged and he would only get nominal damages.

Question 21

When is the market value of real property set?

Answer 21

On the date that the buyer’s performance was due

Question 22

What happens if there was a breach by the seller in a land sale contract?

Answer 22

The buyer gets the market price minus the contract price. Remember that this only counts if he is buying for below market value. If he is buying at market value or above, then he is not damaged and he only gets nominal damages

Question 23

What is the other name for tort damages?

Answer 23

Compensatory damages

Question 24

What is the goal for compensatory damages?

Answer 24

• to RESTORE the injured party to the position he was in before the tort
• to PUNISH egregious wrongdoers
  – to DETER others from similar activity

Question 25

What are compensatory damages?

Answer 25

Damages that are given to compensate a plaintiff for injury from the defendant’s tortious conduct

Question 26

When do you see compensatory damages?

Answer 26

In tort claims

Question 27

When do you see expectation damages?

Answer 27

In contract claims

Question 28

What is the difference between compensatory damages and expectation damages?

Answer 28

– compensatory: for tort claims

– expectation: for contract claims

Question 29

Compensatory damages include what things?

Answer 29

All damages that flow from the tortious act as long as they are foreseeable

Question 30

If a violent robbery results in the victim missing work and needing to get therapy, would that be included under compensatory damages?

Answer 30

Yes, because that is foreseeable

Question 31

Do consequential damages apply to tort problems?

Answer 31

No!!!!! Those are only for contract problems

Question 32

What are the things that must be present with a tort in order to get damages for it?

Answer 32

• the damages must be foreseeable
  – certain
  – and unavoidable

Question 33

What is the difference between general and special damages?

Answer 33

– GENERAL: damages that the law presumes flow from the wrong. They don’t have to be proven, you just have to prove the extent. I.e.: if D hit the P on the head, it is expected that P would have pain and suffering.
– SPECIAL: any other damages suffered by P that aren’t general. Things that go beyond what is normally expected to result from the wrongful act. These must be specifically pleaded by the plaintiff and their extent must be proven. Ie: after P was hit by the D, he had blurred vision and missed a lot of work and wants compensation for lost wages

Question 34

If there is injury to personal property, what are the three major considerations in that category?

Answer 34

• destruction of personal property
  – damage to personal property
  – taking of personal property

Question 35

If there has been destruction of personal property, what is the remedy?

Answer 35

The market value of the property at the time of destruction. If the market value is hard to determine, the alternative is the replacement cost of the property with a subtraction for depreciation because it’s not fair to replace used property with new property