Remedies-Contract Definitions

Question 1

General Damages

Answer 1

Loss of expectancy under the contract.

Question 2

Three Requirements for Special/Consequential Damages

Answer 2

1. Foreseeable at the time contract was made.
2. Reasonably certain and;
3. Unavoidable

Question 3

Three considerations for liquidated damages.

Answer 3

1. Damages are a fair approximation of the anticipated harm caused by breach.
2. Difficulty of proof of loss.
3. Unavoidable

Question 4

Reliance Damages

Answer 4

When expectation damages or consequential damages are not appropriate, the aggrieved party may be able to recover their costs in relying on the contract.

Question 5

Rescission at Law-Usual grounds for.

Answer 5

Purpose is to under a contract because of a Serious Problem.

Usual grounds for rescission are inducement, undue influence, duress, mistake, or substantial breach by the other party.

Often times couple with Restitution.

Question 6

Three Requirements for an Effective Rescission

Answer 6

1. Notification to D.
2. Tender back of goods to party originally possessing it.
3. Must be prompt, good faith and unequivocal.

Question 7

Rescission at Equity

Answer 7

Same as Rescission at Law except no Tender Back requirement.

Question 8

Defenses available for Rescission

Answer 8

1. Laches
2. Unclean hands
3. Affirmance of contract
4. Estoppel by conduct. Whereby P, after learning of facts, continues to rely on contract.

Question 9

Restitution-Purpose of

Answer 9

To put the wrongdoer in the position he would have occupied if the contract had never been formed.

Question 10

Reformation-Purpose of

Answer 10

To conform the contract to reflect the parties original agreement. The goal is to save the contract.

Question 11

Four grounds for Reformation

Answer 11

1. Writing does not conform with the prior agreement to a mistake or Fraud.
2. Where parties believed that the instrument reflected their agreement when in fact it did not.
3. Where one party knows or has reason to know that writing does not conform to agreement and other party does not know.
4. Mistake by draftsman.

Question 12

Defenses for Reformation

Answer 12

1. Laches
2. BFP as long as they did not have notice of mistake.
3. Ratification by P
4. Assumption of risk of the mistake.
5. Changed position in reliance on instrument itself.

Question 13

Specific Performance-Is Remedy available?

Answer 13

Charles Atlas Earns Much Cash Delivering Elephants

1. Contract-Valid?
2. Enforceability of decree
3. Mutuality of remedy
4. Conditions-Has P complied with all conditions precedent to D’s duty to perform?
5. Defenses
6. Equitable Conversion (applies only to Executory Land Sales Contracts)

Question 14

When is Injunction Available?

Answer 14

Only in employment contracts containing a negative covenant/replevin UCC.

Question 15

Remedies available for fraud

Answer 15

1. Damages
2. Restitution
3. Rescission
4. Reformation

Question 16

Fraud in the execution

Answer 16

Reflects what was agreed upon

Question 17

Fraud in the inducement

Answer 17

Contract does not reflect what was agreed upon. P knows exactly what he is doing but there was a misrepresentation.

Question 18

Defenses available for Mistake

Answer 18

1. Unclean hands
2. Laches
3. Ratification-After learning of mistake.
4. Changed Position-
5. Discharge for value.
6. Compromise/Settlement

Question 19

Defense (Cause for Breach) of Duress

Answer 19

P entitled to rescind contract or conveyance made under Duress.

1. Rescission
2. Restitution

Question 20

Defense (Cause for Breach) of Undue Influence

Answer 20

1. Rescission

2. Restitution

Question 21

Defense (Cause for Breach) Unconscionability

Answer 21

Court will usually not enforce the unconscionable provision but will enforce the rest of the agreement.

Question 22

Vendee’s remedies if Vendor breaches (UCC)

Answer 22

1. General damages
2. Incidental and consequential damages
3. Reliance Damages
4. Rescission and Restitution
5. Specific Performance (Only if goods are unique or other special circumstances)
6. Replevin

Question 23

Replevin under UCC

Answer 23

Under UCC where goods have been “specially identified”, under a contract, and the buyer is unable to cover by purchasing other goods, buyer has a right to replevy the goods in seller’s possession even though title to those goods has not passed.

Question 24

Vendor’s remedies if Vendee Breaches (UCC)

Answer 24

1. General damages
2. Cover
3. Restitution
4. Specific Performance

Question 25

Unenforceable Contract

Answer 25

1. Statute of Frauds
2. Supervening Illegality
3. Incapacity of the parties
4. Impossibility of performance