Remedies Flashcards
What are the three types of damages?
- expectation
- reliance
- restitution (ie, quasi-contract)
What are expectation damages?
seek to put the non-breaching party in the position they would have been but-for the breach
*expectation damages give the injured party the benefit of the bargain and are limited only to FORESEEABLE damages
What is the legal standard for awarding nominal damages for a breach?
may be awarded when the victim has suffered no actual loss from the breach
Are punitive damages available in K disputes?
generally, NO
reserved for tort cases
When are expectation damages awarded for breach?
COMMON REMEDY FOR ANY BREACH
*expectation damages are based on the contract price and the place the non-breaching party in the position they would have been had the promise been performed
What are reliance damages?
return costs to the non-breaching party to put them in the same position they would have been in had the promise not been made
*distinguish from expectation damages, which put the non-breaching party in the position they would have been in had the promise been performed
What are consequential damages?
Flow from a breach, above and beyond general damages, as a result of the aggrieved party’s particular circumstances
*consequential damages are recoverable if, at the time the K was made, the breaching party had reason to foresee that the damages were a probable result of a breach
What is the definition of a “liquidated damages provision”?
fixes the amount of damages that will be recoverable in the event of a breach
*the liquidated damages provision must be reasonable to be enforced
What is the “duty to mitigate” damages?
In a case w/ anticipatory repudiation, the non-breaching party still owes a “duty to mitigate” (avoid) further damages arising from the repudiation
*if the non-breaching party fails to mitigate damages, they will NOT be entitled to recover damages they could have otherwise avoided
What is the definition of “specific performance”?
is an equitable remedy where the court order a breaching party to perform because monetary damages are inadequate to compensate the injured party
**specific performance is primarily used for cases involving land or unique goods
What is “rescission”?
means the cancellation of a K
What is “restitution”?
allows for a non-breaching party to recover the value of a benefit conferred on another when a K was breached OR when the benefit conferred under a K that is unenforceable because of the Statute of Frauds, impossibility, or other comparable excuses
*restitution is most often associated with unjust enrichment
When a party breaches a quasi-contract, what type of damages may be awarded to the non-breaching party?
restitutionary damages are awarded following a breach of quasi-contract
^unjust enrichment
What is “replevin”?
An action that enables a person to get back personal property that was wrongfully taken or detained, pending a final determination by a court of law
*incorporated into UCC
What may a buyer recover after accepting non-conforming goods from a seller?
may recover the loss resulting in the ordinary course of events from the seller’s breach
What measure of damages may a seller recover from a buyer’s repudiation under the UCC?
the measure of damages for repudiation by the buyer is the difference between the contract price and “the market price at the time and place for tender”
What does it mean to “cover” in a. contract for the sale of goods?
is when the buyer purchases substitute goods from other sources after the seller breaches
HYPO:
What remedy will be available to a party who has conferred benefits but whose contract is unenforceable due to failure or occurrence of a condition?
The aggrieved party may pursue a remedy under the theory of unjust enrichment and seek restitution
What may a buyer recover after rightfully rejecting or revoking acceptance of non-conforming goods?
The buyer may recover the market price of the goods at the time the buyer learned of the breach minus the contract price
If the buyer covered, they may recover the difference between the contract price and cover price
*covering means purchasing substitute goods from another source
How much may a buyer recover after “covering” in a contract for the sale of goods?
if the buyer covers in good faith and in a commercially reasonable manner, they may recover the cost of cover (ie, the cost of the substitute goods) MINUS the contract price
What is the “Hadley principle” in contract law?
IS that consequential damages can be recovered only if, at the time the K was made, the ∆ had reason to foresee the damages as a probable result of the breach
How does the court measure restoration damages in construction contracts?
Where a contractor’s performance has been incomplete or defective, the measure for damages is the cost of completion or cost of restoration
What is the concept of “diminution in value” in the context of calculating damages?
Where an award might be wasteful, such that the cost to restore would greatly exceed the difference in value, damages may be determined by the difference in value between land as promised and its current value
What are “incidental damages”?
include any commercially reasonable costs incurred as result of the breach (eg, inspection, shipping, storing, reselling efforts)
Where a seller has goods and the buyer is in breach, how should the seller’s damages be calculated if the seller RESOLD the goods?
the seller’s damages are the difference between the K price and resale price
Where a seller has goods and the buyer is in breach, how should the seller’s damages be calculated if the seller is a lost volume seller?
A lost volume seller can recover lost profits if the seller:
- has a big enough supply to make both the contracted sale and the resale
- would have likely made both sales AND
- would have made a profit on both sales
**generally lost profits are the contract price with the breaching buyer minus costs incurred by the seller
IN a contract for the sale of goods, may a seller recover incidental OR consequential damages?
NO.
the seller may recover INCIDENTAL, but NOT consequential
*in a contract for the sale of goods, only a BUYER may recover consequential damges
In a contract for the sale of goods, may a buyer recover incidental OR consequential damages?
the buyer may recover consequential AND/OR incidental damages
*in a K for the sale of goods, only a buyer may recover consequential damages
Where the buyer has received the purchased goods and the buyer is in breach, what is the measure of seller’s damages?
the seller may recover the FULL contract price
Where the buyer has received the purchased goods and the seller is in breach, what is the measure of the buyer’s damages?
the difference between perfect goods and the value as tendered
What is the “certainty rule” in the context of damages?
the concept that to be recoverable damages must be reasonably certain and not speculative
Where a seller has the goods and the buyer is in breach, how should the seller’s damages be calculated if the seller did NOT resell the goods?
Seller’s damages are the difference between the K price and market price
Where the seller has the goods and the seller is in breach, how should the buyers damages be calculated if the buyer covered?
the difference between contract price and cover price
Where the seller has the goods and the seller is in breach, how should the buyer’s damages be calculated if the buyer did NOT cover?
difference between K price and the market price at the time the buyer learned of the breach
What 3 concepts may limit a damages award?
Concepts that limit or have the potential to limit recovery include:
- duty to mitigate damages
- foreseeability of the damages
- ability to calculate loss w/ reasonable certainty
When are liquidated damages provisions enforceable?
Enforceable if:
- damages were difficult to estimate or ascertain at time K was made AND
- the amount agreed upon was a reasonable forecast of the projected losses
*reasonableness is determined by comparing the amount of damages reasonably anticipated at the K formation and the liquidated damages figure
In what situation are reliance damages most often awarded?
most often awarded where there is a contract, but expectation damages are too uncertain or speculative to calculate
*jurisdictions that follow the second restatement award reliance damages when there is promissory estoppel
Can a party recover both expectation and restitution damages?
NO.
Expectation damages require the breach of a contract
WHEREAS restitution damages are generally awarded in situations involving a quasi-contract
May a mutual rescission be made orally?
YES, BUT a written rescission document will be required if:
- the contract’s subject matter falls within the stat of frauds OR
- the contract is for a sale of goods and contains a provision requiring a written rescission
Is specific performance a potential remedy for the breach of a service contract?
NO - not available for service contracts, even if the service to be performed was unique or rare
