Remedies Flashcards
Legal Remedies
The following legal remedies are available after a breach:
1) expectation damages
2) consequential damages
3) reliance damages
4) incidental damages, and
5) restitution damages
Equitable Remedies
The following equitable remedies are available:
1) reformation
2) rescission, and
3) specific peformance
Expectation Damages
Expectation damages arise directly from a contract breach and are an attempt to put the nonbreaching party in the same position it would be in but for the breach.
Damages must be caused by the D and be foreseeable, certain, and unavoidable.
Consequential Damages
Consequential damages arise indirectly from a contract breach and are awarded based on the injured party’s special circumstances.
They are awarded if
1) D knew or had reason to know of the special circumstances,
2) Certain, and
3) foreseeable.
Reliance Damages
Reliance damages are expenditures made by a party in reliance of a K and are an attempt to put the nonbreaching party in the position it would have been in had the contract never existed.
Sometimes awarded when expectation damages are too speculative.
Must be certain, and plaintiff’s reliance must be reasonable & foreseeable.
Incidental Damages
Incidental damages are costs incurred in mitigating losses.
Restitution Damages
Restitution damages are awarded where the nonbreaching party conferred a benefit to the defendant. The value of the damages is based on the value of the benefit conferred.
Can’t be awarded with expectation damages.
Quasi-Contract
A court will imply a contract where a party was unjustly enriched by conferring a benefit to another and had a reasonable expectation of compensation.
Only reliance or restitution damages available.
UCC Buyer’s Remedies
Buyer is entitled to
1) reject goods & cancel contract
2) obtain a refund w/o cancelling
3) loss in value damages
4) cover or market damages, and
5) incidental & consrquential damages
Reformation
A contract can be reformed to conform to parties’ original intent where a valid contract exists but there was a misrepresentation or mutual mistake of a material fact.
Rescission
Rescission treats a contract as cancelled when there was a problem with formation, no valid defenses exist, and P didn’t sue under prior action.
Specific Performance
Specific performance will be awarded where
1) A valid & final contract exists
2) The P has performed or is willing, able & ready
3) Legal remedies inadequate
4) Enforcement by court is feasible, and
5) No valid equitable or contractual defenses exist
Under common law doctrine of mutuality, both parties must be able to assure performance but in most jurisdictions today, SP can be awarded where one party can assure performance.
Cover Damages
Awarded if buyer covered in GF.
contract price - price of substitute goods
Loss in Value Damages
contract price - value of nonconforming goods
Market Damages
Awarded if buyer didn’t cover or covered in bad faith.
contract price - market price of goods (determine by place for delivery)
