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Contracts > Remedies > Flashcards

Remedies Flashcards

1
Q

What types of monetary damages are available at common law

A

At common law, aggrieved party can choose among the types of damages:
1. expectation damages
2. reliance damages
3. restitution damages
4. liquidated damages (if available)

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2
Q

What are expectation damages?

A

Aggrieved party is entitled to the amount that will restore them to the position they would have been in had the contract been fully performed

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3
Q

How are expectation damages calculated

A

(loss of value of breaching party’s performance) + (incidental and consequential costs generated by breach) - (payments already received) - (any costs saved as result of breach) = [expectation damages]

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4
Q

When may aggrieved party not be able to recover the full expectation of the contract?

A
  1. cost of performance greatly exceeds market value of performance
  2. damages cannot be calculated with reasonable certainty
  3. damages are unforseeable
  4. damages could have been mitigated
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5
Q

What are reliance damages

A

Damages that restore aggrieved party to the position they were in before the contract

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6
Q

How are reliance damages calculated?

A

(money spent in preparation for performance or in actual performance) - (loss breaching party can prove aggrieved party would have suffered if contract was fully performed) = [reliance damages]

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7
Q

When are reliance damages available?

A

When expectation damages are too uncertain

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8
Q

What are restitution damages?

A

Value of benefits conferred upon the other party in a transaction. May be available even when the other party has not breached

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9
Q

How are restitution damages calculated?

A

Calculation of damages based on court’s discretion and as justice requires by either:
1. reasonable vlue or cost of the benefits conferred
2. extent to which the other party’s property has increased in value because of the performance rendered

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10
Q

When are restitution damages available?

A

Available if aggrieved party has partially but not fully performed

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11
Q

What are liquidated damages

A

Liquidated damages are provisions in contract that provide damages of the parties’ own choosing in the event of a breach

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12
Q

When are liquidated damages provisions enforcable?

A

Enforceable if the provisions are designed to compensate for a breach

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13
Q

When are liquidated damages provisions unenforcable?

A

Unenforcable if provisions are mainly a penalty designed to punish breach

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14
Q

What is test for determining enforceability of liquidated damages provisions?

A
  1. Did parties intend for clause to be a liquidated damages provision or a penalty?
  2. Was the clause reasonable at the time of contracting in relation to the anticipated harm?
  3. Is the clause reasonable in relation to the harm/loss that actually occurred
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15
Q

What is remedy if court finds liquidated damages provision to be a penalty?

A

Court will strike the provision from the contract and issue damages in accordance with default rules

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16
Q

What is seller’s remedy under UCC if goods were delivered to and accepted by the buyer?

A

Contract price

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17
Q

What is seller’s remedy under UCC if goods were not delivered or accepted because the buyer wrongfully rejected or repudiated goods?

A
  1. If seller has re-sold goods: damages are differences between contract price and resale price
  2. If seller hasn’t resold: damages are difference between contract price and market price
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18
Q

What are lost volume sellers

A

Sellers under UCC for whom supply of goods exceeds the demand

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19
Q

How are damages calculated for lost volume sellers?

A

Lost volume sellers may recover the profit they would have otherwise made on the lost sale

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20
Q

What must lost volume sellers demonstrate in order to recover lost profit?

A
  1. that the seller could have sold to both the breaching buyer and resale buyer
  2. that it would have been profitable to make both sales
  3. that seller probably would have made the additional sale regardless of buyer’s breach
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21
Q

What are buyer’s remedies under the UCC if they are able to “cover” and replace their goods

A

Difference between contract price and cover price

22
Q

What are buyer’s remedies under UCC if they are unable to “cover” and replace the goods?

A

Difference between the contract price and market price

23
Q

What is buyer’s remedy under UCC if buyer receives and accepts nonconforming goods

A

Difference in value damages for accepted goods - buyer may recover the difference between value of the goods contracted for and the value of the goods actually received

24
Q

What are a seller’s incidental damages under UCC

A

A seller’s incidental damages are the expenses incurred by the seller dealing with the goods after buyer’s breach (e.g. storing the goods, shipping elsewhere, etc.)

25
Q

What are a buyer’s incidental damages under UCC

A

Buyer’s incidental damages are the expenses incurred arranging for a cover (e.g. transportation costs)

26
Q

When can buyer receive consequential damages

A

Buyer can recover consequential damages that were reasonably foreseeable to the seller at the time the contract was entered into
-includes lost profits because of delay in obtaining goods

27
Q

Can a seller recover consequential damages?

A

UCC does not explicitly give seller right to consequential damages

28
Q

What is specific performance

A

An equitable remedy requiring performance of the contract

29
Q

When is specific performance available?

A

Only available when money is an inadequate remedy, usually where goods are unique objects, art, heirlooms and early property

30
Q

What are equitable considerations when determining whether to order specific performance?

A
  1. did the aggrieved party have clean hands
  2. were terms of contract fair
  3. were terms of contract sufficiently definite
  4. can performance of aggrieved party be reasonably assured
  5. will specific performance be in the public interest
31
Q

When is specific performance not available as a remedy

A

Personal service contracts or contracts requiring ongoing cooperations from parties are not eligible for specific performance

32
Q

What are requirements for specific performance under UCC

A
  1. goods are unique
  2. party is capable of immediately performing the requirement
33
Q

What is required to satisfy the uniqueness requirement to order specific performance under UCC?

A

Aggrieved party needs to adequately search and be unable to find reasonable subsittutes

34
Q

Is specific performance allowed in output and requirements contracts under UCC?

A

Yes

35
Q

What is a negative injunction?

A

Equitable remedy that is an order prohibiting breaching party from doing something

36
Q

When do negative injunctions typically arise

A

Generally arise in employment settings

37
Q

What is mid-term relief

A

When an employee under contract for specific period of time breaches the contract

38
Q

When is negative injunction available for mid-term relief

A

Negative injunction is available to prevent competition with former employer if employee’s services are unique or extraordinary (common for pro-athletes)

39
Q

What is post-employment relief?

A

Contract provision that prohibits post-employment competition

40
Q

When are post-employment provisions valid?

A

Validity of post-employment non-compete provisions depends on
1. whether there is a significant business justification for enforcing restraints
2. scope of the non-compete clause and whether it is reasonable based on geography and duration
3. whether the non-compete was an express provision of contract

41
Q

What types of damages may courts award in cases of promissory estoppel?

A

The type of interest a party may recover under promissory estoppel depends on the jurisdiction, and courts may award any of
1. expectation damages
2. reliance damages
3. damages that are specifically tailored to remedy the injustice at issue

42
Q

When are damages awarded for benefits conferred under a failed contract?

A

When a party bestows a benefit on their trading partner in connection with what turns out to be a failed contract, often based on incapacity, fraud or duress

43
Q

What type of damages are available for benefits conferred under failed contract?

A

Party conferring benefits may recover the value of the benefit via restitution damages

44
Q

When ca a breaching party recover the benefits it conferred on the non breaching party?

A

A party that breaches a contract may recover benefits it conferred on the non-breaching party as long as there is no offset for damages caused by the breach?

45
Q

When can a party recover for general unjust enrichment?

A

A party that confers benefits on another party may recover their value where it is unjust for the recipient to retain the benefits without paying, even absent any express or implied in-fact contract

46
Q

When is recovery appropriate for general unjust enrichment?

A
  1. medical services provided by a medial professional
  2. benefits conferred by mistake to one who availed themselves of the benefits at issue
47
Q

Can a party that bestows benefits without request by the benefitting party recover for unjust enrichment?

A

No, a party that bestows benefits without request by benefitting party is considered an “officious intermeddler” and is not entitled to recovery

48
Q

What is exception to “officious inter-meddlers” not recovering for benefit bestowed upon a party that did not ask for the benefit?

A

Doctors and other health professionals who provide emergency health care to a patient unable to consent may still recover for benefit conferred without beneficiary asking

49
Q

Can parties agree to specific remedies in a contract?

A

Yes, parties may contract out of the legal and equitable remedies available under the law by specifying agreed-to remedies in the contract

50
Q

What are typical forms of agreed-to remedies?

A
  1. liquidated damages provisions
  2. provisions limiting or excluding damages

Contracts (17 decks)

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