Remedies

Question 1

Types of monetary damages:

Answer 1

1) Expectation
2) Reliance
3) Restitutionary
4) Liquidated

Question 2

Expectation damages are:

Answer 2

damages that will restore plaintiff to the position he would be in as if the K had been performed

Question 3

The formula for expectation damages:

Answer 3

Loss of value of the breaching party’s performance

+ Any incidental and consequential costs generated by the breach

• Any payments received from the breaching party
• Any costs saved as a result of the breach

= Expectation damages of the aggrieved party

Question 4

Situations where expectation damages are limited:

Answer 4

1) Cost of performance greatly exceeds the market value of performance
2) Expectation damages cannot be calculated because the damages are too uncertain
3) Damages are unforeseeable
4) Damages can be mitigated

Question 5

Reliance damages are designed to:

Answer 5

Restore aggrieved party to position he was in before the contract

Question 6

Reliance damages are measured by:

Answer 6

Any expenditures made in preparation for performance or actually performing

• (Minus) ANy loss which breaching party could prove the aggrieved party whould have suffered even if the K would have been fully performed

Question 7

When are reliance damages available?

Answer 7

Where expectation damages not available because they are too uncertain or speculative

Question 8

Restitutionary damages:

Answer 8

The value of benefits conferred on the other party in the transaction.

Question 9

How to measure restitution damages:

Answer 9

1) Reasonable value or cost of the benefit conferred, OR

2) Extent to which the other party’s property has increased in value because of performance rendered

Question 10

When is an aggrieved party likely to elect restitutionary damages?

Answer 10

1) When it would exceed the amount recoverable based on his expectation interest, and
2) Most likely to arise in a losing K.

Only available for partial but not full performance

Question 11

Liquidated damages:

Answer 11

Is a contract provision designed to provide for damages of the parties’ own choosing.

Question 12

Liquidated damages provisions will be enforceable when

Answer 12

1) Courts find it to be a valid clause designed to compensate for breach.
2) Cannot be a penalty for breach or it will be unenforceable

Question 13

Three prongs of determining if liquidated damages provision is valid:

Answer 13

1) Did parties intend for it to be a liquidated damages clause or a penalty?
2) Was it reasonable at the time of making the contract in relation to anticipated harm?
3) Reasonable in relation to harm from breach that actually occurred?

Question 14

UCC - Seller’s Remedies depends on

Answer 14

Whether goods have been delivered and accepted by the buyer.

Question 15

UCC Seller’s Remedies - If delivered and accepted by the buyer

Answer 15

the K price is recoverable

Question 16

UCC Seller’s Remedies - If the goods have not been delivered to and accepted by the buyer (because the buyer has wrongfully rejected or repudiated them):

Answer 16

If seller has resold - Damages are the difference between K price and Resale price.

If seller has not resold - Damages are the difference between K price and Market Price

Question 17

What is a lost volume seller?

Answer 17

One whose supply of goods exceeds the demand for the same. In such a case, traditional seller remedies will not fully compensate the seller’s damages.

Question 18

Lost volume sellers may recover:

Answer 18

The profit they would have made on the sale.

To recover lost profits, seller must show:

1) He could have made the sale to both the breaching buyer and resale buyer
2) Profitable to make both sales
3) Would have made profits off both sales

Question 19

What are incidental damages?

Answer 19

Costs associated with getting stuck with the unsold goods as well as resale costs, but will be reduced by any amount reflecting expenses avoided on account of breach.

Question 20

UCC - Buyer’s Remedies depends on:

Answer 20

whether buyer has covered (purchased replacement goods)

Question 21

If a buyer covers:

Answer 21

he may recover the difference between K Price and Cover Price

Question 22

If a buyer does not cover:

Answer 22

Difference between K Price and Market Price

Question 23

If a buyer accepts nonconforming goods from the seller, he may receive:

Answer 23

the difference between Value of the goods contracted for and the value of the goods received

Question 24

Types of Equitable Remedies:

Answer 24

1) Specific Performance

2) Negative Injunction

Question 25

Specific Performance is appropriate when:

Answer 25

monetary remedy is inadequate, such as for:

1) Unique objects (works of art, precious heirloom)
2) Real Property

Question 26

Specific Performance is not available for:

Answer 26

1) Ks for personal services

2) Ks for ongoing cooperation with the parties

Question 27

When is specific performance available under the UCC?

Answer 27

1) Uniqueness requirement liberalized - when a buyer has adequately searched but is unable to find reasonable substitutes and was unable to cover breach by seller
2) allowed in output and requirements Ks (classic long-term Ks)

Question 28

A negative injunction:

Answer 28

prohibits breaching party from taking particular action.

Question 29

Other possible remedies:

Answer 29

1) Promissory Estoppel
2) Restitution and Unjust Enrichment
3) Agreed-To Remedies

Question 30

The type of interest a party may recover under a claim of promissory estoppel could be (depending on JX):

Answer 30

1) expectation damages
2) reliance damages
3) tailor the remedy on case-by-case basis

Question 31

Restitution and unjust enrichment can occur beyond a breach of K, including situations like:

Answer 31

1) benefits conferred under a failed K
2) benefits conferred by a breaching party
3) emergency benefits conferred by a health care professional
4) benefits conferred by mistake

Question 32

Agreed-to remedies:

Answer 32

1) Liquidated damages

2) Provisions limiting or excluding damages