REMEDIES FOR AN UNEXCUSED NONPERFORMANCE

Question 1

Specific performance/injunction:

Answer 1

Equitable remedy: Look for adequacy of remedy at law or unclean hands, or other parties’ equities.

1. Contracts for sale of real estate - except if BFP
2. Contract for sale of goods: Unique goods: antiques, art, custommade or other appropriate circumstances.
3. Contract for services: No specific performance, possible injunctive relief.

Question 2

Seller’s reclamation from an insolvent buyer of goods:

Answer 2

Right of an unpaid seller to get its goods back. Key facts are that:

1. the buyer must have been insolvent at the time that it received the goods, and
2. the seller demands return of goods within 10 days of receipt (this “10- day rule” becomes a “reasonable time rule” if, before delivery, there had been an express representation of solvency by the buyer), and
3. the buyer still has goods at time of demand.

Question 3

Entrustment

Answer 3

Entrusting goods to a merchant who deals in goods of that kind gives him the power to transfer all rights of the entruster to a buyer in the ordinary course of business.

Question 4

Policy for money damages

Answer 4

Compensate plaintiff, not punish defendant.

To make whole again

Question 5

Measure of damages:
General approach – protection of expectation:

Answer 5

Expectation simply means that people who contract expect that the other person will not breach. Expectation damages protect that expectation.

Accordingly, (1) look to facts for dollar value of
performance without breach, (2) look to facts for dollar value of performance with breach, and (3) compare the two to determine the amount of damages.

Question 6

Art 2 - Seller breaches, buyer keeps the goods

Answer 6

[Fair market value if perfect – fair market value as delivered] or [cost of repair].

Question 7

Art 2: Seller breaches, seller has the goods:

Answer 7

[market price at time of discovery of the breach – contract price] or [reasonable replacement price – contract price] whichever is greater.

Question 8

Art 2 Buyer breaches, buyer keeps the goods

Answer 8

Contract Price

Question 9

Art 2 Buyer breaches, seller has the goods:

Answer 9

[contract price – resale unless seller cannot resell in
which case the seller can recover the contract price
and in some situations provable lost profits].

Question 10

[Lost profits for lost volume seller]. S&M Leather contracts to sell leather clothing to Conviser for $1,000. (Assume that Conviser is buying goods that are part of S&M’s regular inventory – “off the rack” so to speak.) Conviser breaches. S&M sells the very same items to Christian Grey for $1,000.

Can S&M recover any damages from Conviser?

And if so, how much?

Answer 10

Yes

Lost Profit, because its regular inventory

Question 11

INCIDENTAL damages:

Answer 11

Costs incurred in dealing with the breach such as costs of storing rejected goods in a sale of goods or finding a replacement in a services contract – always recoverable.

Question 12

CONSEQUENTIAL (special) damages:

Answer 12

Consequential damages does not mean all damages
caused as a consequence of the breach. Rather think of damages as being either

(1) general damages, i.e., kind of loss that any person would sustain or
(2) consequential damages, i.e., kind of loss that is special to this plaintiff.

Consequential damages are limited to damages arising from P’s special circumstances and recovery of consequential damages is limited to situations in which D had reason to know of these special circumstances at the time of the contract.

Question 13

Less AVOIDABLE damages:

Answer 13

No recovery for damages that could have been avoided without undue burden on plaintiff. Burdens of pleading and proof on defendant.

Question 14

Liquidated Damages

Answer 14

Look for contract provision fixing amount of damages. Issue will be validity: concern is whether provision is too high – a penalty. Tests are:
(1) damages were difficult to forecast at time contract was made and

(2) provision is a reasonable forecast.