Remedies

Question 1

When is recession available due to mutual mistake?

Answer 1

If,
1. the mistake relates to a basic assumption of the K.
2. the mistake materially affects the agreed-upon exchange of performances,
AND
3. the adversely affected party did not assume the risk of the mistake.

Question 2

When is a LD’s clause unenforceable?

Answer 2

LD’s clause is unenforceable as a penalty if the amount is so unreasonably large in relation to actual of anticipated damages that it punishes the breaching party.

Question 3

When an owner breaches a construction K, before or during construction, what are the builders damages?

Answer 3

The builders damages are equal to the:
1. builder’s lost profits
PLUS
2. costs incurred,
MINUS
3. any costs saved or otherwise avoided.

Question 4

Buyers duties regarding rightfully rejected goods

Answer 4

Buyer who rightfully rejects nonconforming good must:
1. take reasonable care of goods in its possession until seller had had sufficient time to retrieve them
AND
2. not exercise ownership over rejected goods (eg, by selling them).

If a buyer wrongfully converts rejected goods, then the seller is entitled to recover the fair market value of the goods at the time of conversion.

Question 5

Damages for promissory estoppel, two types, which is more common?

Answer 5

Damages may be limited as justice requires.

Typically results in an award of reliance damages based on the claimants out-of-pocket expenses,
BUT
Some courts have awarded expectation damages to put the claimant in the same position as if the promise had been performed.

Question 6

When is an award of CD’s appropriate?

Answer 6

Damages for losses stemming from non-breaching party’s special circumstances if breaching party:
- knew of those special circumstances
OR
- could have reasonably foreseen harm caused by breach.

Question 7

Consequential Damages Cannot be what?

Answer 7

Speculative, the non-breaching party must prove the dollar amount with reasonable certainty.

Question 8

How to calculate expectation damages? Use teacher, summer camp example.

Answer 8

The teacher contracted to work at summer camp for $10k, for 10 weeks.

The summer camp breached, by hiring someone else.

The teacher found other employment at a salary of $6K for the same 10 week period.

The teacher can recover ex. damages of 4k
10-6=4.

In addition the teacher can recover the $200 in travel expenses incurred attempting to find substitute employment.

So in total the teacher can recover 4,200.

Question 9

What is reformation as a remedy?

Answer 9

Reformation is an equitable remedy that courts can use to rewrite a K to reflect the parties original intent.

The remedy is available when a writing that embodies an agreement fails to express the agreement because of a mistake by both parties as to its content or legal effect.

When reformation is available to cure a mutual mistake, neither party can avoid the K.

Question 10

Is specific performance available as a remedy to enforce a contractual duty to perform personal services

Answer 10

NO

Question 11

Implied in fact contracts definition

Answer 11

-formed when party manifests assent by conduct rather than spoken or written words.
EG. contractor mistakenly paves driveway and owner does not object.

Question 12

Implied in law contracts definition aka Quasi Contracts

Answer 12

Constructed by court to prevent unjust enrichment when party receives benefit from another who reas. expects compensation.

Eg. physician treats unconscious person.