REMEDIES

Question 1

SPECIFIC PERFORMANCE

Answer 1

Equitable remedy, available only if monetary damages are inadequate to compensate the injured party

• Real property
• Article 2 SOG where goods are unique or in other proper circumstances (i.e. scarcity, inability to buy substitute goods in the market)
• Generally not availabe in service contracts, but injunctive relief may be

Question 2

UNPAID SELLER’S RIGHT TO RECLAIM GOODS (ARTICLE 2)

Answer 2

Seller has no right to reclaim available under Article 2

EXCEPTIONS:

• Seller will have a right to reclaim goods if
  
  • Buyer was insolvent when it received the goods AND
  • Seller makes a demand within 10 days after buyer received them
• NO right to reclaim against an innocent third party
• Seller can reclaim at ANY time if buyer mispresented its solvency in writing within 3 months before delivery

Question 3

LIQUIDATED DAMAGES

Answer 3

Upheld if:

1. Damages were difficult to estimate at the time of K formation AND
2. Reasonably forecasts probable damages

Under Article 2, can look to reasonableness at time of K or in light of actual damages

Under common law, does not matter if the clause was reasonable in light of actual damages

Question 4

EXPECTATION DAMAGES

BUYER’S DAMAGES/ SELLER’S BREACH (3 OPTIONS)

Answer 4

1. Cover Damages
   
   • Cover price - K price
   • IF buyer covers in good faith
2. Market Damages
   
   • Market price - K price
   • IF buyer doesn’t cover in good faith, or doesn’t cover at all
   • NOTE - buyer can get specific performance if cannot cover
3. Loss in Value
   
   • Value as promised - value delivered
   • IF buyer keeps non-conforming goods

Question 5

EXPECTATION DAMAGES

SELLER’S DAMAGES/BUYER’S BREACH (4 OPTIONS)

Answer 5

1. Resale Damages
   
   • K price - Resale price
   • If seller re-sells in good faith
2. Market Damages
   
   • K price - Market price
   • If seller does not re-sell in good faith, or does not re-sell at all
3. Lost Profit
   
   • Only if seller is a lost volume dealer (i.e. holds inventory, could have made another sale)
4. Contract Price
   
   • ONLY IF seller cannot re-sell the goods
   • Analagous to buyer’s specific performance
   • i.e. custom-made goods

Question 6

INCIDENTAL DAMAGES

Answer 6

Available to both injured buyers and sellers

Costs of transporting/caring for goods after a breach and arranging a substitute transaction

Question 7

CONSEQUENTIAL DAMAGES

Answer 7

Damages special to THIS plaintiff that were reasonably foreseeable to the breaching party at the time of K

i.e. Hadley v. Baxendale

NOT available to a seller under Article 2

Question 8

AVOIDABLE DAMAGES

Answer 8

An injured party cannot recover damages he could have avoided/mitigated with reasonable effort

Not usually applicable under Article 2