Remedies

Question 1

Nonmonetary Remedies: Specific Performance

Answer 1

If the legal remedy (i.e. monetary damages) is inadequate, the nonbreaching party may seek specific performance, which is an order from the court to the breaching party to perform or face contempt of court charges.

ALWAYS AVAILABLE FOR LAND SALE CONTRACTS (all land is unique!) AND FOR RARE OR UNIQUE GOODS!!!

In contrast, a court may use an injunction as an alternate remedy

Question 2

Nonmonetary Remedies: Covenant Not to Compete

Answer 2

Most courts will grant an order of specific performance to enforce a contract not to compete if: the services to be performed are unique and the covenant is reasonable.

Reasonableness is determined by:
1. legitimate interest of person
2. reasonableness re: geographic scope and location
3. must not harm the public

Question 3

Monetary Remedies: Damages. What are the types?

Answer 3

Compensatory

Punitive

Nominal

Liquidated

Question 4

Compensatory Damages

Answer 4

Basic IDea: usual goal of damages for breach is to put the unbreaching party in the position they would have been in had the promise been performed

Question 5

Punitive Damages

Answer 5

GENERALLY NOT AWARDED IN CONTRACT CASES

Question 6

Nominal Damages

Answer 6

Nominal damages (for example, $1) may be awarded when BREACH but NO ACTUAL LOSS

Question 7

Liquidated Damages

Answer 7

Parties may stipulate what damages are to be paid in the event of a breach

Requires: (1) damages are difficult to estimate at time contract is formed and (2) amount agreed on is a reasonable forcast of compensatory damages in the case of breach

Question 8

Consequential Damages

Answer 8

A seller is liable for consequential damages arising from their breach if they:

1. Had reason to know of the buyer’s general or particular requirements AND
2. The subsequent loss resulting from those needs could not reasonably be prevented by cover