Remedies Flashcards
What is restitution?
Restitution (also called quasi-contract) protects against unjust enrichment whenever contract law yields an unfair result. It is the remedy of last resort. It is an equitable remedy and it is not a contract.
What is promissory estoppel?
It is a substitute for consideration, where foreseeable reliance may make a promise enforceable even without consideration.
What limitations are there on buyer’s remedies in breach of warranty?
General Rule: Seller can limit buyer’s remedies for breach of any warranty (express or implied) if the limitation is not unconscionable.
Exception: Limiting buyer’s remedies for personal injury in the case of consumer goods is presumed unconscionable. (Consumer protection clause).
Failure of Limited Remedy: If a limited remedy “fails of its essential purpose,” the remedy provisions of Article 2 apply.
What are the non-monetary or equitable remedies available for a breach of contract?
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Specific Performance: an equitable remedy, available only if monetary damages are inadequate to compensate the injured party. Availability of specific performance depends on the nature of the contract:
a. Real Property: specific performance is the usual remedy because real property is considered unique.
b. Sale of Goods (Article 2): Specific performance is available ONLY IF the goods are unique or there are “other proper circumstances.”
c. Service Contracts: Specific performance is not available in service contracts, but injuctive relief may be. - **Unpaid Seller’s Right to Reclaim Goods (Article 2): **not available under Article 2, EXCEPT if buyer was insolvent when it received the goods and seller makes a demand within ten days after buyer received them. Seller can reclaim goods at any time, if buyer misrepresented its solvency to seller in writing within three months before delivery.
What are punitive damages and are they awarded for breaches of contract?
Punitive damages are awards meant to punish, and they are not awarded for breach of contract, because the purpose of contract damages is to compensate.
When are liquidated damages appropriate?
Liquidated damages, or damages that are agreed to in the contract, will be upheld if the damages were difficult to estimate at the time of the contract and are a reasonable forecast of probable damages, but cannot operate as a penalty.
What are expectation damages and how are they awarded in the common law and under Article 2?
Expectation damages are meant to put an injured party in as good a position as full performance. Expectation damages are the general rule.
Common Law: expectation damages are whatever money over or under the non-breaching party had to spend/pay in order to make up for the breach.
Sale of Goods (Article 2): Expectation is the general rule - but classified between buyer’s damages and seller’s damages:
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Buyer’s Damages:
a. Cover Damages: cover price - contract price, if buyer covers in good faith.
b. Market Damages: market price (at the time of breach) - contract breach, if buyer doesn’t cover in good faith or doesn’t cover at all.
c. Loss in Value: value as promised - value delivered, if buyer keeps non-conforming goods. -
Seller’s Damages:
a. Resale Damages: contract price - resale price, if seller resells in good faith.
b. Market Damages: contract price - market price (at the time of breach) if seller does not resell in good faith or does not resell at all.
c. Lost Profit: If a seller is a lost volume seller - usually a dealer who can resell the same good for the same price.
d. Contract Price: analogous to specific performance; if the seller can’t resell the goods.
What are incidental damages?
Incidental Damages are the cost to the injured buyer or seller of transporting/caring for goods after a breach and of arranging a substitute transaction.
What are consequential damages?
Consequential damages are damages special to this plaintiff that were reasonably foreseeable to the breaching party at the time of the contract.
Note: Consequential damages are not available to a seller under Article 2.
What are avoidable damages?
It is a common law rule, that an injured party cannot recover damages he could have avoided (“mitigated”) with reasonable effort. Usually applied to employment contracts.
