Remedies Flashcards
Damages when an employer breaches an employment contract
When there is a breach of an employment contract by the employer, the standard measure of the employee’s damages is based on the full contract price. However, a nonbreaching party cannot recover damages that could have been avoided with reasonable effort.
Specific performance
Specific performance is only available where the legal remedy (i.e., money damages) is inadequate. Specific performance is not available as a remedy regarding a contract for services.
Remedy for construction contract breached by homeowner after construction started
Where an owner breaches a construction contract after construction has been started but before construction is completed, the builder is entitled to recover any profit he would have derived from the contract plus any costs he has incurred to the date of the breach.
Construction contracts breached by builder - damages generally
In construction contracts, the standard measure of damages when the builder breaches will depend on when the breach occurred. If the builder breaches after partially performing, the owner is entitled to the cost of completion plus reasonable compensation for any delay in performance (unless completion would involve undue economic waste). Most courts will allow the builder to offset or recover for work performed to date if necessary to avoid the unjust enrichment of the owner. If substitute performance is readily obtainable, damages are measured by the unpaid contract price minus the cost of completion (up to the value of the benefit received by the defendant).
UCC measure of damages when buyer keeps nonconforming tender
If a buyer accepts nonconforming goods, the buyer may recover warranty damages. The basic measure of warranty damages is the difference between the value of the goods delivered and the value they would have had if they had been warranted in the contract, plus incidental and consequential damages.
Lost profits doctrine
When the buyer repudiates or refuses to accept goods, the usual measure of the seller’s damages is the difference between the contract price and the market price or the difference between the contract price and the resale price of the particular goods. However, neither of those measures of damages gives adequate compensation for the buyer’s breach where the seller can obtain or manufacture as many goods as it can sell (i.e., a lost volume seller), because, but for the buyer’s breach, the seller would have made two sales instead of one. In this type of case, lost profit is measured by the contract price less the cost to the dealer.
Restitution - breach of plaintiff
If the plaintiff is the party who breached the contract, it may still recover in quasi-contract the value of the services performed minus any damages incurred as a result of the breach.
Expectation damages
For breach of contract, the injured party may be entitled to expectation damages. Expectation damages are intended to put the injured party in the same position as if the contract had been performed.
Restoration damages
One measure of expectation damages is the cost of restoration. Often, where the cost to restore is many times greater than the difference of X in its unrestored condition, damages are measure by the difference in value. Courts are split on which measure to use. If the breach is willful and only the completion of the contract will enable the nonbreaching party to be where he would be if the contract had been performed, the cost of completion may be considered the appropriate damage award.
Consequential damages
Consequential damages consist of losses beyond those covered by the standard measure that a reasonable person would have foreseen would occur as a result of the breach. Often the availability of consequential damages turns on the breaching party’s awareness of the other party’s circumstances.
Foreseeability of contract damages
Contract damages must be foreseeable to be recoverable. Damages are foreseeable if a reasonable person in the position of the breaching party would have known at the time the contract was made that the damages were likely to occur as a result of the breach.
Ascertainability of contract damages
Contract damages must be ascertainable with reasonable certainty to be recoverable.
Costs avoided because of the breach
Contract damage awards must take into account costs avoided because of the breach.
Avoidable damages/mitigation
A nonbreaching party cannot recover avoidable damages; i.e., if he does not make reasonable efforts to cut losses after breach, he will not be permitted to recover those damages that might have been avoided.
Liquidated damages
The parties to a contract may stipulate what damages are to be paid in the event of a breach if:
- damages are difficult to ascertain at the time the contract is formed, and
- the amount agreed on is a reasonable forecast of compensatory damages in the case of a breach.
