Remedies Flashcards
When will a court usually decline to award specific performance?
When there is an adequate remedy at law
When will a court consider providing specific or injunctive relief?
When the damages are difficult to quantify.
When is specific performance available under UCC 2-716?
When the goods are unique or in other proper circumstances (such as the inability to cover)
When is specific performance available under CISG Article 46?
- The buyer can almost always demand performance, unless they have avoided the contract
- If non-conformity is a fundamental breach, the buyer can demand substitute goods
- The buyer can demand the seller to repair non-conforming goods unless repair would be unreasonable
What does CISG Article 28 say about specific performance?
Countries only need to comply with the specific performance requirements of CISG Article 46 if they would do so under their own law.
What is Formula A for calculating damages?
damages = loss in value - cost avoided + other loss - loss avoided
How is “cost avoided” calculated?
cost avoided = project price - profit (including overhead) - actual variable costs incurred
What is Formula B for calculating damages?
damages = profit + actual cost incurred + other loss - loss avoided
What are “other losses”?
Incidental and consequential losses
What is a fixed cost?
A cost that does not vary depending on the quantity of work performed (ex: salaries and building rent)
What is a variable cost?
A cost that varies with the quantity of work performed (ex: materials and labor)
What is overhead?
Fixed costs which are allocated to all sources of revenue
What are incidental cost / damages?
Costs associated with an active effort to mitigate damages
What are consequential costs / damages?
Losses involving events and circumstances external to the contract at issue, but occurring as a natural consequence of the breach
Which consequential damages are recoverable?
Those that are foreseeable:
1. In the ordinary course of events surrounding the contract and its breach or
2. In special circumstances of which the breaching party had reason to know
Which consequential damages are NOT recoverable?
- Those that are not foreseeable
- Those that could have been reasonably mitigated
What is the principle of minimizing damages?
It requires reasonable mitigation of avoidable damages and precludes any award for damages that were reasonably avoidable
What is active mitigation?
Taking action to avoid or decrease damages
What is passive mitigation?
Not taking action to run up damages (ex: stopping work when the contract is terminated)
What damages can a buyer recover under the common law?
- The loss in value if proven with reasonable certainty
- Reasonable cost of completing performance or repair
If the buyer does not retain the goods, what damages are they entitled to under UCC 2-711?
- Cover price: cover price - contract price + other loss - expenses saved
- Market price: market price - contract price + other loss - expenses saved
How are a buyer’s consequential damages limited by UCC 2-715(2)?
- They must be foreseeable at the time of the contract 2. They must not have been able to be reasonably covered
If the buyer retains the goods, what damages are they entitled to under UCC 2-714?
- Reasonable loss from the ordinary course of events
- Damages = (value at the time and place of acceptance) - (value if they had been as warranted)
How can a buyer reduce their payment to the seller for non-conforming goods under UCC 2-717?
After notifying the seller of their intention to do so, the buyer can reduce their payment to the seller by the damages resulting from the breach
What damages are recoverable under CISG Article 74 and 77?
- Any foreseeable damages
- That have been reasonably mitigated, or the breaching party can reduce damages by the amount they should have been mitigated
What can the seller recover for goods the buyer accepts or that were damages after risk was transferred to the buyer?
UCC 2-709(1)
The price of the goods + incidental damages
What can the seller recover for “identified” goods (specific to the contract) that the buyer refuses to accept?
UCC 2-709(1)
The contract price IF the seller is unable to resell them for a reasonable price after reasonable effort
What can the seller recover from the original buyer in the event of a resell (due to the buyer’s breach)?
UCC 2-706(1)
Damages = contract price - resale price + incidental damages - expenses saved
What are the seller’s right to incidental and consequential damages?
UCC 2-710
Costs incurred from dealing responsively with the breach - usually involve costs of mitigating the damages
If a seller can’t recover the contract price or resell the goods, what damages can they recover?
UCC 2-708(1)
Damages = marketprice at the time and place of delivery - contract price + incidental damages - expenses saved
Is the seller entitled to consequential damages for a breach of contract?
No.
What is the requirement for certainty of damages under the common law?
Damages must be proven and quantified with reasonable certainty.
What is the requirement for certainty of damages under the UCC?
There must be a reasonably certain basis for providing an appropriate remedy.
More liberal than the CL requirement that damages must be “proven and quantified”.
What are the requirements for liquidated damages under both the CL and UCC?
They must be reasonable in terms of either:
1. Damages reasonably estimated at the time the contract was concluded
2. Damages actually incurred
