Remedies Flashcards
Expectation Damages
Arise directly from the breach, and are meant to put the non-breaching party in the same position it would have been in but for the breach.
Expectation Damages Recovery Elements:
To recover, damages must be:
- caused by D (actual cause);
- foreseeable (proximate cause);
- certain (not speculative); AND
- unavoidable (reasonable steps were taken to mitigate damages).
Consequential Damages
Arise indirectly from the breach (i.e. lost profits).
Consequential Damages Recovery Elements:
To recover, damages must be:
- reasonably foreseeable at the time of contract formation;
- arise from P’s special circumstances that D knew of (or had reason to know of); AND
- reasonably certain (not speculative).
Punitive Damages
Meant to punish a wrongdoing party.
- NOT usually available for breach of contract.
- May be awarded for breach of contract involving fraud or tort claims.
Specific Performance
is an equitable remedy; is only available if monetary damages are inadequate to compensate an injured party.
− NOT awarded for personal service contracts, but injunctive relief may be awarded.
UCC Seller’s Remedies & Damages
When a buyer breaches, a seller may recover/do any of the following:
a) Withhold Delivery of goods;
b) Cancel the contract;
c) Cover Damages – difference between the
resale price and the contract price (used when
seller resold in good faith);
d) Market Damages – difference between market
price and contract price;
e) Lost Volume Seller – can recover lost profits on
a sale if the seller regularly sells the goods at
issue and has unlimited inventory;
f) Stop Delivery of goods (if buyer is insolvent and
goods are in possession of carrier/bailee); OR
g) Replevy identified goods from an insolvent
buyer (in certain instances).
The seller is also entitled to incidental damages under the UCC. True or False?
True.
Seller is also entitled to incidental damages – the commercially reasonable costs as a result of the breach.
Right to Replevy Identified Goods
A seller is allowed to replevy goods when:
1) Buyer was insolvent when it received the goods;
AND
2) Seller makes a demand within 10 days of buyer receiving the goods.
*A buyer’s misrepresentation of solvency in writing within 3 months prior to the delivery of goods REMOVES the 10-day limitation above.
UCC Buyer’s Remedies & Damages
When a seller breaches, a buyer may recover any of the following:
a) Cover Damages – difference between contract price and price of substitute goods (if purchased in good faith);
b) Market Damages – difference between market price and contract price (if not in good faith or no cover at all); OR
c) Loss-in-Value Damages – difference between the value as promised and the value of the non- conforming goods (when buyer kept the non- conforming goods).
Waste Doctrine
When an award for cost of completion is wasteful, a court may award damages for diminution in value (the difference in value of the property/land).
− This may be awarded instead of expectation damages.
Waste doctrine applies if:
1) Contractor performs in good faith, but defects
exist; AND
2) Remedying the defects would entail economic
waste (the cost of completion greatly exceeds
the value of the completed work).
*Normally seen in the construction contract context.
Restitution (Unjust Enrichment)
Awarded to prevent unjust enrichment when one party confers a benefit.
− Damages = value of benefit conferred.
− A party cannot recover both restitution and
expectation damages.
Rescission
Treats the original contract as cancelled.
A contract will NOT be rescinded if:
a) there is a valid equitable defense; OR
b) plaintiff sued for damages under the contract in
a prior action
*A party may sue for both damages and rescission at the same time.
