Remedies for Breach of Contract (55%)

Question 1

Monetary damages at common law

Answer 1

may be able to recover damages calculated to protect that party’s
1. expectation interest,
2. reliance interest, or
3. restitutionary interest.
A party may: elect only one of these remedies

Question 2

Expectation damages

Answer 2

the aggrieved party will be entitled to the amount: that would restore him to the position he would have been in had the contract been fully perform

Question 3

Calculating Expectation Damages

Answer 3

Loss of value + incidental costs + consequential costs - payments received - costs saved

Question 4

The aggrieved party may not be able to recover the full amount of expectation damages in the following situations:

Answer 4

(1) Where the cost of performance greatly exceeds the market value of performance
(2) where expectation damages cannot be calculated with reasonable certainty
(3) When damages are unforeseeable
(4) Where damages can be mitigated/reasonably avoided

Question 5

A recurring example of a case where uncertainty in awarding expectation damages exists is

Answer 5

A new business with no profit history

Question 6

Reliance Damages

Answer 6

restore the aggreieved party to the position they were in prior to the contract

Question 7

Types of Monetary damages

Answer 7

1. Expectation damages
2. Reliance Damages
3. Restitutionary Damages

Question 8

Calculating Reliance Damages

Answer 8

1. Any expenditures made in preparation for performance or in actually performing // no matter who is paid
   (minus)
2. Any loss the breaching party can prove the aggreieved party would have suffered had the contract been fully performed

Question 9

When to use reliance damages

Answer 9

when expectation damages are unavailable: i.e. when uncertain or speculative

Question 10

Restitutionary Damages

Answer 10

the value of the benefits conferred on the other party in the transaction

Question 11

Calculating Restitutionary Damages

Answer 11

(a) The reasonable value or cost of the benefit conferred; or,
(b) The extent to which the other party’s property has increased in value due to performance rendere

Question 12

When will a party most likely seek restitutionary damages

Answer 12

in a losing contract

Question 13

Restitutionary damages only available when

Answer 13

where the aggreieved party has partly performed but not fully performed

Question 14

Liquidate Damages are

Answer 14

clauses designed to provide for damages of their own chosing in the event of a breach

Question 15

When are Liquidated Damages Enforceable & Unenforceable?

Answer 15

(a) enforceable if: it is a valid liquidated damages designed to compensate for breach
(b) unenforceable if: it is a penalty designed to punish a breach

Question 16

Test for liquidated damages clause

Answer 16

Primary consideration: Was the clause reasonable at the time of contracting in relation to the anticipated harm?

Secondary consideration: Was the clause reasonable in relation to the harm that actually occurred due to the breach?

Question 17

If the court concludes that the liquidated damages clause is in fact a penalty, then

Answer 17

the clause is stricken from the contract and damages are recoverable according to the default rules.

Question 18

Seller’s UCC Remedies

Answer 18

1. Profit,

2. Incidental damages

Question 19

The seller’s of goods right to recover depends on

Answer 19

whether the goods have been delivered and accepted by the buyer

Question 20

The seller’s remedy if goods have been delivered to and accepted by the buyer

Answer 20

the seller’s remedy is for the contract price

Question 21

The seller’s remedy if goods have not been delivered to and accepted by the buyer if the seller has resold

Answer 21

Contract Price – Resale Price

Question 22

The seller’s remedy if goods have not been delivered to and accepted by the buyer if the seller has not resold

Answer 22

Contract Price – Market Price

Question 23

Lost volume sellers may only recover

Answer 23

the profit they would have made on the lost sale

Question 24

Lost volume sellers are

Answer 24

A lost volume seller is one whose supply of goods exceeds the demand for the same (e.g. Best Buy)

Question 25

Whether or not the seller resells goods, he is entitled to recover

Answer 25

incidental damages

Question 26

Incidental Damages are

Answer 26

the cost associated with getting stuck with the goods + cost of resale - expenses avoided on account of breach

Question 27

Buyer of goods remedies depend upon

Answer 27

If the buyer covers: purchases replacement goods.

Question 28

Damages calculation if buyer of goods

1. Covers
2. Does not cover

Answer 28

(a) If the buyer covers: the damages = Cover price - Contract Price
(b) If the buyer does not cover: the damages = Market Price – Contract Price

Question 29

Incidental damages for buyer of goods

Answer 29

cost of securing cover

Question 30

Buyer of goods can seek what damages

Answer 30

incidental damages + consequential damages

Question 31

Buyer of goods consequential damages

Answer 31

the peculiar costs arising to the buyer because of a particular need or use of the goods in question (lost profits)

Has to be foreseeable

Question 32

Buyer of goods damages will be reduced by

Answer 32

costs avoided

Question 33

Buyer’s damages if they accept non-conforming goods

Answer 33

the buyer is entitled to recover the difference between:

1) The value of goods contracted for
2) The value of the goods Received

Question 34

Specific Performance is only available when

Answer 34

a monetary reward is considered inadequate

Question 35

Monetary reward is considered inadequate when purchasing either:

Answer 35

1. Unique Objects; or,

2. Real Property

Question 36

Specific Performance are absolutely not available for

Answer 36

(a) Contracts for personal services

(b) Contracts requiring ongoing cooperation between the parties

Question 37

Specific Performance under the UCC allowed when

Answer 37

1. a buyer has adequately searched but unable to cover

2. Output contracts & requirement contracts

Question 38

Negative Injunctions are

Answer 38

orders by the court prohibiting the breaching party from taking particular action

Question 39

When an employee is under contract for a specified period of time and the employee breaches the contract by departing before the end of that period, a negative injunction will be available to prevent the employee from competing if

Answer 39

The employee’s services are unique or extraordinary

Question 40

Non-compete clauses depend on three factors:

Answer 40

(1) Is there a significant business justification for enforcing post-employment restraints (e.g. access to trade secrets)
(2) Is the scope of the non-compete clause reasonable in duration & geographical reach?
(3) Is there an express provision of a covenant not to compete?

Question 41

Types of promissory estopple damages that can be recovered

Answer 41

Depending upon jurisdiction

(1) Expectation Damages
(2) Reliance Damages
(3) Chose on a case by case basis

Question 42

Restitution as a Cause of Action (outside breach of contract) can be brought

Answer 42

1. To recover benefits are conferred under a failed contract

2. To recover benefits conferred by a breaching party, as long as the other party receives damages for breach

Question 43

Liability of patient when Emergency Benefits are Conferred by a Health Care Professional without consent?

Answer 43

will be able to recover for services rendered to a patient unable to give consent

Question 44

The general rule is that a person who bestows benefits without request from the benefitting party: is considered

Answer 44

an officious intermeddler that will not be able to recover since there is no opportunity to decline

Question 45

A person who mistakenly confers benefits to another party may be entitled to restitution from the mistaken party if

Answer 45

1) Not a blameworthy error
2) the recipient was aware of the error in time to prevent it
3) The recipient avails himself of the benefits at issue

Question 46

Provisions limiting or excluding damages are not enforceable if

Answer 46

they are unconscionable or fail their essential purpose

Question 47

Enforceability Limitation of consequential damages for personal injury in the case of consumer goods

Answer 47

it is prima facie unconscionable

Question 48

How to distinguish between material breach and substantial performance
(5)

Answer 48

1. the extent to which the aggrieved party will be deprived of the benfit for which he reasonably expected under the terms of the contract;
2. the extent to which the aggrieved party can adequately be compensated via damages for the defective performance;
3. the extent to which the breaching party will suffer forfeiture if a material breach is found;
4. the extent to which the breach was willful or in bad faith rather than merely negligent or innocent;
5. the likelihood that the breaching party will cure his failure within a reasonable time and in a manner consistent with the reasonable purpose of the contract.

Question 49

A material breach of contract on the part of one party entitles the other party to…

Answer 49

terminate the contract