Remedies Flashcards

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1
Q

What is specific performance AND when is it available?

A

Specific performance is an equitable remedy is ONLY available when damages are INADEQUATE to compensate the injured party Availability depends on type of K… 1) Real property: specific performance is the USUAL REMEDY b/c real property is considered unique (even though not really) NY DISTINCTION: if the vendor cannot deliver title b/c of a LATENT DEFECTthat he’s unaware of, then damages = down pmt + reasonable exps 2) Sale of Goods (Art. 2/UCC): specific performance is available ONLY IF the goods are (i) unique; OR (ii) there are “other proper circumstances” (e.g. an inabillity to buy substitute goods in the mkt) 3) Service Ks: specific performance is NOT AVAILABLE in service K, but injunctive relief may be (i.e. barring someone from doing something)

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2
Q

When can a seller reclaim goods that were NOT paid for?

A

General rule = NOT available under Art. 2/UCC EXCEPTION 1: If a buyer (i) was insolvent WHEN it received the goods; AND (ii) seller makes a demand w/in 10 DAYS after buyer received them EXCEPTION 2: Seller can reclaim goods AT ANY TIME if the buyer misrepresented its solvency in WRITING w/in 3 MONTHS before delivery

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3
Q

When are punitive damages available?

A

NEVER!! The purpose of K damages is to COMPENSATE, not PUNISH

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4
Q

When will a liquidated damages clause be upheld?

A

The clause would be UPHELD IF: (i) it were DIFFICULT to estimate damages; AND (ii) the liquidated damages are a REASONABLE forecast of probabledamages (CANNOT act as a penalty) Reasonability under COMMON LAW, is measured from perspective of (ex ante) PROBABLE damages, and NOT (ex post) ACTUAL damages under Art. 2/UCC, is measured realtive to PROBABLE or ACTUAL damages (more flexible) If liquidated damages cl is struck down, π will get actual damages E.g. a fine of $100/day is more reasonable than a flat $20,000 as the latter is inflexibile and not based on extent of damages

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5
Q

What are expectation damages AND how are the calculated under the common law?

A

Expectation damages put the injured party IN AS GOOD a position as full performance (i.e. the benefit of the bargain) Expectation damages are the DEFAULT measure of damages If expectation damages are too speculative (e.g. the profit level), then the π can get reliance damages for expenditures spent in reliance on the K (i.e. puts π in a position as if the K had NEVER existed) NOTE: an injured party CANNOT recover damages he COULD have avoided (mitigation) w/ reasonable effort

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6
Q

What are expectation damages AND how are the calculated under Art. 2/UCC?

A

Expectation damages put the injured party IN AS GOOD a position as full performance (i.e. the benefit of the bargain) Expectation damages are the DEFAULT measure of damages CALCULATION Buyer’s damages 1) Cover damages (default) = cover price – K price Use this IF buyer covers in GOOD faith 2) Mkt damages = mkt price – K price This is used if buyer DOESN’T cover at all OR does so in bad faith NOTE: there is NO rule of mandatory covering in the UCC (mitigation) 3) Loss in value = value as promised – value delivered Is used in buyer KEEPS non-conforming goods Seller’s damages 1) Resale damages (default) = K price – resale price Use IF seller resells in GOOD faith 2) Mkt damages = K price – mkt price This is used if buyer DOESN’T resell at all OR does so in bad faith NOTE: there is NO rule of mandatory covering in the UCC (mitigation) 3) Lost profit (for volume dealer) = all the LOST profits from MISSED sale (even IF resells at same price, i.e. $0 resale damages) ONLY use IF, π is a “lost volume dealer” (i.e. can get virtually UNLTD supply of the good) NOTE: any ADDITIONAL profit made on the REPLACEMENT sale does NOT reduce the amt of profit damages owed to merchant from breaching buyer 4) K price = if seller CANNOT resell the goods (RARE!) E.g. custom made goods that cannot be resold to anyone else

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7
Q

What are incidental damages AND how are the calculated?

A

Incidental damages = COST to the injured buyer/seller of transporting/caring for goods AFTER breach; AND of arranging a substitute trxn (e.g. a cover/resale)

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8
Q

What are consequential damages AND how are the calculated?

A

Consequential damages = damages special to THIS π that were REASONABLY foreseeable to the breaching party (∆) at the time of the K NOTE: consequential damages are ONLY available under common law; they are not available under Art. 2/UCC to a SELLER (UNLESS”loss volume dealer” where he’d get the lost profit) Hadley v. Baxendale: the delivery ∆ and the π who needed the crankshaft delivered (∆ didn’t know that the package served an immediate purpose, so not foreseeable)

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