remedies Flashcards
when is specific PF granted as a remedy?
if it’s difficult to prove damages
when is specific PF favored as a remedy?
more likely in real estate deals, where it’s harder to value damages
who has the burden of proof related to obtaining specific PF as a remedy?
the party seeking specific performance
how do uniqueness and uncertainty relate to each other in establishing value of damages?
UCC - uniqueness wins, CL - uncertainty wins
when is a breach “efficient”?
breaching party will get more money from new K party than it has to pay in damages to first K party, third party can perform better than the first
what’s the purpose of an efficient breach?
allows resources to be moved into a more valuable use
when is an injunction awarded as a remedy?
awarded if damages are inadequate and benefits of injunction outweigh costs of supervision
what is a liquidated damages clause for?
pre-defined reasonable amount for breach of K (agree in advance)
what makes a LD clause valid?
actual damages are uncertain at time of K and LD’s are proportional to actual loss
how can you show an LD clause is invalid?
must show (1) damages are certain or (2) LD amount is grossly disproportionate to actual harm
if an LD clause is determined to be invalid, what can you get?
actual damages only
what are the three UCC criteria for measuring reasonableness of LD clauses?
(1) antic/actual harm caused by breach, (2) difficulty of proving loss, (3) difficulty of obtaining an adequate remedy (#3 UCC only)
what are the three overall types of damages alternatives?
expectation, reliance, and restitution damages
what’s the purpose of expectation damages?
put the non-breaching party in the same position as if K had been performed
what’s the basic formula for calculation of damages?
loss of value or cost of repair/substitute PF+ consequential damages + incidental damages, minus costs saved/avoided, minus amounts not foreseeable, certain or mitigated
what’s the normal type of damages awarded in construction K’s as a remedy?
cost of repair - if not grossly disproportionate to loss in value or if difficult to show loss in value with reasonable certainty
when is substitute PF more likely to be awarded as an expectation damage?
if (1) willful breach, (2) no economic waste, or (3) construction K
when is loss in value more likely to be awarded as an expectation damage?
loss in value used if breach merely incidental to a main purpose of K, and economic benefit of PF is grossly disproportionate to cost of PF
what’s the purpose of reliance damages?
reimburse non-breach party for expenses incurred in reliance on K
what’s the purpose of restitution damages?
interest of non-B in recovering any benefit to other party
when is the UCC money damage of resale used?
if B breaches (won’t take goods), S may resell goods and gets damages
what’s awarded as UCC money damages if buyer breaches and seller resells?
K price minus resale price plus incidentals and consequentials, minus costs saved (i.e., price expected minus price received)
what’s awarded as money damages if buyer breaches and seller elects not to resell?
market price minus unpaid K price
what’s awarded as UCC money damages if seller breaches and buyer covers?
cover price minus K price, plus incidentals and consequentials, minus costs saved (i.e., price paid minus price expected)
what’s awarded as UCC money damages if seller breaches and buyer doesn’t cover?
unpaid K price minus market price
are consequential damages recoverable?
not always
when are consequential damages NOT recoverable?
if they could have been prevented by cover
how do you recover lost profits as consequential damages?
recoverable if you show that they’re foreseeable and the potential of lost profits was communicated to other party
are incidental damages recoverable?
always
what are incidental damages?
costs incurred in a reaosnable effort to avoid loss
what’s the benefit of being designated a lost volume seller?
can recover lost profits as actual damages
explain the “lost volume” part of lost volume seller
if seller would have entered into both transactions but for the breach, then S lost volume
how do you show that you’re a lost volume seller?
(1) capacity to make an add’l sale, (2) would have been profitable for party to make another sale, and (3) probably would have made the add’l sale anyway
what are the four main types of limitations on damages?
costs saved, mitigation, foreseeability, certainty
explain the “costs saved” limitiation of damages
costs which would not have been incurred BUT FOR the breach of K - payments not made
what’s the definition of “mitigation” as related to limitations of damages?
offset adverse consequences -
how is “mitigation” a limitiation on damages?
damages can be reduced if you don’t mitigate
how are employee damages calculated?
amt owed in K minus amt employee earns or could have earned from other job
what’s the requirement of mitigation situations as limitation on damages?
other offer must be substantially similar, not inferior
how does foreseeability relate to limitations on damages?
damages awarded for lost profits only if foreseeable at time of K and communicated to other party
what makes lost profits foreseeable as related to limitations on damages?
if (1) follow in ordinary course of events, and (2) breaching party knew or had RTK
how does certainty relate to limitiations on damages?
amt of loss mus tbe proven with sufficient certainty
how is certainty assured as related to limitations on damages?
must be directly traceable to breach, not remote, and supported by evidence
