Remedies Flashcards
Specific performance
if the legal remedy inadequate, the nonbreaching party may seek specific performance, order from the court to the breaching party to perform or fact contempt of court charges.
When is specific performance available?
For land and rare or unique goods.
NOT available for breach of a contract to provide services, even if the services are rare or unique.
injunction as alternate remedy
a court may enjoin a breaching employee from working for a competitor throughout the duration of the K if the services contracted for are rare or unique.
covenant not to compete
most courts will grant an order of specific performance to enforce a K not to compete if:
(1) the services to be performed are unique; and
(2) the covenant is reasonable.
when is a covenant not to compete reasonable?
- reasonably necessary to protect a legitimate interest of the person
- must be reasonable over its geographic scope and duration; and
- the covenant must not harm the public.
in addition to standard contract defense, an action for specific performance is subject to the equitable defenses of:
- laches
- unclean hands
- sale to a bona fide purchaser
buyer’s nonmonetary remedies
- cancellation
- buyer’s right to replevy identified goods
- buyer’s right to specific performance.
seller’s nonmonetary remedies
- seller’s right to withhold goods
- seller’s right to recover goods
- seller’s ability to force goods on buyer limited
right to demand assurances
if there are reasonable grounds for insecurity with respect to a party’s performance, the other party may demand in writing assurances that the performance will be forthcoming at the proper time.
compensatory damages
put the nonbreaching party in the position they would have been in had the promise been performed.
standard measure of damages - expectation damages
most cases, the plaintiff’s standard measure of damages will be based on an “Expectation measure” that is, sufficient damages for them to buy a substitute performance.
reliance damage measure
if plaintiff’s expectation damages are too speculative, plaintiff may elect to recover those damages they have suffered based on their reasonable reliance on the contract.
Reliance damages designed to put P in position that would have been in had K never happened,
incidental damages
compensatory damages may also include incidental. Most commonly associated with Ks for sale of goods and typically include expenses reasonably incurred by a buyer in inspection, receipt, transportation, care, and custody of goods etc.
consequential damages
Special damages and reflect losses over and above standard expectation damages. May be recovered only if, at time K made, a reasonable person would have foreseen the damages as a probable result of a breach.
certainty rule
plaintiff must prove losses suffered were certain in their nature and not speculative.
are punitive damages generally awarded in K cases?
No.
requirements for enforcement of liquidated damages clauses
damages for contractual breach are difficult to estimate or ascertain at the time the K is formed; and
the amount agreed on is a reasonable forecast of compensatory damages in the case of breach.
buyer’s damages (seller does not deliver or buyer rejects/revokes)
is seller doesn’t deliver, or buyer rejects, the buyer’s basic damages consist of the difference between the contract price and either:
(1) the market price or
(2) the cost of buying replacement goods (cover), plus incidental and consequential damages, if any, less expenses saved as a result of the seller’s breach.
What remedies are available if K is breached?
- specific performance
- damages
- restitution
- rescission and reformation
Compensatory Damages
- expectation damages (“benefit of the bargain”)
- consequential damages available only if reasonably foreseeable
liquidated damages if:
- actual damages difficult to calculate at the time of contracting
- amount is a reasonable forecast of the likely damages (not punitive)
sale of goods article 2 damages for buyers
- cover (difference between contract price and cost of replacement goods)
- difference between contract price and market price
- warranty damages (if accepted nonconforming goods)
- consequential damages (if seller knew of buyer’s needs)
sale of goods article 2 damages for sellers
- difference between contract price and resale price
- difference between contract price and market price
- lost profits (lost volume seller)
land sale contracts damages
difference between the contract price and fair market value
employment contracts damages
employer breach - full K price
employee breach - cost to replace employee
construction K damages - breach of owner
before construction - builder’s prospective profits
during construction - K price minus the cost of completion
after completion - full k price plus interest
construction K damages - breach of builder
before or during construction - cost of completion plus compensation for delay
late completion - value of lost use
does nonbreaching party have duty to mitigate avoidable damages?
Yes.
