Remedies

Question 1

Remedies

Answer 1

A. To compensate aggrieved party

B. Common Law remedies

1. legal remedies
2. equitable remedies

Question 2

Monetary Damages

Answer 2

Compensatory damages - to place aggrieved party in as good a position if the other party had performed

Reliance damages - to place party in as good a position as if the contract had not been made (when compensatory, incidental and consequential damages not reasonably ascertainable)

Question 3

Damages for misrepresentation

Answer 3

1. Recission available as alternative remedy
2. out of pocket damages - difference between value of what is received and what is given
3. benefit of bargain damages - difference between value of what is received and what it would have been worth in absence of the misrepresentaiton
4. fraudulent misrepresentation - majority of jurisidictions allow benefit of bargain damages
5. non-fraudulent misrepresentation - typically limited to out of pocket damages

Question 4

Foreseeability limitation

Answer 4

Should breaching party have known that breach would result in aggrieved party’s losses? Foreseeable if losses resulted from the breach

1. in the ordinary course of events, or
2. as a result of special circumstances about which the party in breach had reason to know

Question 5

Restatement (second) of Contracts - Unforeseeability and Related Limitations on Damages

Answer 5

1. Damages are not recoverable for loss that the party in breach did not have reason to foresee as a probable result of the breach when the contract was made
2. Loss may be foreseeable as a probable result of a breach because it follows from the breach
   a. in the ordinary course of events, or
   b. as a result of special circumstances, beyond the obidinary course of events that the party in breach had reason to know
3. a court may limit damages for foreseeable loss by excluding recovery for loss of profits, by allowing recovery only for loss incurred in reliance

Question 6

Mitigation of damages

Answer 6

The aggrieved party must take reasonable steps to lessen or mitigate damages that result from breach of contract - the injured party may not recover for damages for loss that he could have avoided with reasonable effort and without undue risk, burden, or humiliation

Question 7

Restatement of Contracts 350

Avoidability as a limitation on damages

Answer 7

1. Except as stated in subsection (2), damages are not recoverable for loss that the injured party could have avoided without undue risk, etc
2. the injured party is not recluded from recovery by the rule stated in subsection (1) to the extent that he has made reasonable but unsuccessful efforts to avoid loss

Question 8

Equitable Remedies

Answer 8

1. Generally not available if there is an adequate remedy at law available
2. specific performance - if money damages are wholly inadequate as a remedy
   - compels actual performance
   - typical situtions - where the consideration is unique examples: sale of real estate
3. injuctions - a court order enjoining (requiring) a person from doing a specific act or engaging in specific conduct
4. reformation - permits the court to rewrite a contract to express the parties’ true intentions