Remedies Flashcards
Monetary Remedies at Common Law (Party can pick 1 of 3)
- Expectation Damages
- Restitution Damages
- Reliance Damages
Monetary Remedies at Common Law
Exception Damages
(court’s default) –> Aggrieved party is entitled to amount that will restore him to the position he would have been in had the K been fully performed
i) Aggrieved party might not be able to recover full expectation when:
(1) Cost of performance greatly exceeds market value of performance
(2) Cannot be calculated with reasonable certainty
(3) Damages are unforeseeable
(4) Damages can be mitigated
Monetary Remedies at Common Law
Exception Damages Formula
Loss of value of breaching party’s performance + incidental and consequential costs generated by breach - payments received - any costs saved as result of the breach = Expectation Damages of aggrieved party
Monetary Remedies at Common Law
Reliance Damages
Restores aggrieved party to position before the K
May be available where expectation damages are too uncertain
Monetary Remedies at Common Law
Reliance Damages Formula
Money spent in prep for performance or in actual performance - loss breaching party can prove aggrieved party would have suffered if K fully performed = Reliance Damages
Monetary Remedies at Common Law
Restitutionary Damages
Value of benefits conferred upon other party in transaction
Limitation –Available if aggrieved party has partially performed but NOT if fully performed
Monetary Remedies at Common Law
Restitutionary Damages Formula
i) Calculation of $$ - Court’s discretion and as justice requires by either:
(1) Reasonable value or cost of benefits conferred; OR
(2) Extent to which the other party’s property has increased in value because of the performance rendered
Monetary Remedies at Common Law
Liquidated Damages Provisions
Provide damages of own choosing in event of breach
i) Enforceable if designed to compensate for breach
ii) Unenforceable if mainly a penalty designed to punish breach
iii) Test:
(1) Did parties intend for clause to be LDP or penalty?
(2) Was clause reasonable at time of contracting in relation to anticipated harm?
(3) Is clause reasonable in relation to harm/losses that actually occurred?
iv) If courts find it is in fact a penalty –> strike from K, damages in accordance with default rules
Monetary Damages under UCC
Seller’s Remedies
a) Seller’s Remedies: Right to recover depends on if goods were delivered and accepted
i) Goods delivered to and accepted by Buyer –> Remedy is K price
ii) Not delivered and accepted (because buyer wrongfully rejected or repudiated):
(1) If seller has re-sold –> damages are difference between K price and resale price
(2) Has not resold –> difference between K price and market price
(3) Lost Volume Sellers = Supply of goods exceeds the demand
(a) Can recover profit they would have made on the lost sale; must be able to show:
(i) Could have sold to both breaching buyer and resale buyer;
(ii) Would have been profitable to make both sales;
(iii) Probably would have made the additional sale regardless of buyer’s breach
Monetary Damages under UCC
Buyer’s Remedies
Depends on whether buyer has covered (bought replacements)
i) Covered –> Difference between K price and cover price
ii) Not Covered –> Difference between K price and market price
iii) Difference in value damages for accepted goods - available if buyer receives and accepts nonconforming goods
(1) Buyer recovers the different between value of the goods contracted for and value of the goods received
Monetary Damages under UCC
Incidental Damages
Buyer or seller can recover incidental damages, which are the expenses incurred in either seller dealing with the goods after buyer’s breach (e.g., storing them) or buyer arranging for cover (e.g., transportation costs)
Monetary Damages under UCC
Consequential Damages
Under the UCC, the buyer can additionally recover consequential damages that were reasonably foreseeable to the seller at the time the contract was entered into (e.g., lost profits because of delay in obtaining goods). Article 2 does not explicitly give seller right to consequential damages.
Specific Performance (equitable remedy)
a) Only available when $$ is inadequate (i.e. unique objects-art, heirlooms, real property)
b) Equity considerations:
i) Aggrieved party has “clean hands”
ii) Terms of K are fair
iii) Terms of K are sufficiently definite
iv) Performance by aggrieved can be reasonably assured
v) Specific performance would be in the public interest
c) Not available – Personal service Ks or Ks requiring ongoing cooperation from parties
d) Under the UCC
i) Uniqueness requirement –> Need only adequately search and be unable to find reasonable substitutes
ii) Capable of immediate performance requirement –> specific performance allowed in output and requirements (both need ongoing corporation)
Negative Injunction (equitable remedy)
a) Orders prohibiting breaching party from doing something (often employment setting)
b) Availability turns on whether mid-term or post-employment relief
i) Mid-term relief = When employee under K for a specific period of time and breaches it –> negative injunction available to prevent competing if employee’s services are unique or extraordinary (pro athlete)
ii) Post-employment relief = K provision that prohibits post-employment competition. Validity depends on:
(1) Is there a significant biz justification for enforcing restraints?
(2) Scope of non-compete clause reasonable? (duration/geographical)
(3) Express provision?
Other Possible Remedies: Promissory Estoppel
the type of interest a party may recover under promissory estoppel depends on the jurisdiction, as some courts award:
i) Expectation damages;
ii) Reliance damages; or
iii) Choose on a case-by-case basis and tailor the remedy to the injustice at issue
