Remedies

Question 1

Expectation Damages

Answer 1

Standard measure of money damages

• Puts the parties in the same economic position as if the contract has been performed
• When in dount, look for the answer that most closely gives the non-breaching party the money she would have received absent the breach

Question 2

Reliance Damages

Answer 2

Alternative measure of damages used when expectation damages are too speculative

• Designed to compensate P based on the value of her perfromance (i.e. puts the parties in the same economic position as if the contract has never been formed).
• Applicable when expectation damages are uncertain or too speculative.

Question 3

Duty to Mitigate

Answer 3

All parties must mitigate damages

• A party may not recover for avoidable damages
• D bears the burden of showing P’s failure to mitigate.

Question 4

Additional Damages

Incidental Damages

Answer 4

Commercially reasonable expenses incurred by the non-breaching party in UCC contracts

• cost of inspecting, returning, storing, reselling
• Recoverable to both buyers and sellers

Question 5

Additional Damages

Consequential Damages

Answer 5

Foreseeable losses indirectly resulting from the breach; recoverable if:

1. Damages are a foreseeable result of the breach, and
2. When contract formed, D has reason to know P would suffer special, unpreventable, or unexpected damages in the event of a breach

• UCC: only buyers can recover

Question 6

Restitution Damages

Answer 6

Arise in quasi-K situations

• Applies if there is no enforceable contract and a party has been unjustly enriched
• Award based on valuse of the benefit wrongfully conferred

Question 7

Liquidated Damages Definition

Answer 7

Agreed-upon contract provisions that stipulate specified damages upon the occurrence of a breach.

Question 8

Liquidated Damages Elements

Answer 8

1. Damages are difficult to project at time of contract formation
2. The provisions is a reasonable estimate of actual damages.

Question 9

Breach by Seller & Buyer keeps goods

Answer 9

Damages = fair market value of perfectly-delivered goods minus FMV of the goods actually delivered,

• If seller breaches by delivering non-conforming but superior goods, buyer is not responsible (i.e. it does not reduce the buyer’s damages)

Question 10

Breach by Seller & Seller keeps or buyer returns goods

Answer 10

Damages = whichever of the following is higher:

1. FMV of goods at the time of breach minus contract price, or
2. Buyer’s costs of covering/replacing goods minus contract price

Question 11

Breach by buyer & buyer has goods

Answer 11

Damages = Contract Price

Question 12

Breach by Buyer & Seller has goods

Answer 12

Damages = either:

1. COntract price minus market price at the time of delivery, or
2. Contract price minus resale price plus provable lost profits.

Question 13

Lost Profits

Answer 13

A seller can recover the lost profits from a buyer’s breach, even though she resold the item that was the subject of buyer’s breach, if she can prove that she would have made a sale to the second buyer regardless of the furst buyer’s breach