Remedies for Unexcused Performance

Question 1

When parties are seeking specific performance or an injunction, what two things to look for?

Answer 1

Adequacy of remedy at law AND unclean hands

Question 2

If there is any doubt as to whether specific performance is permissible, do we say yes or no?

Answer 2

No

Question 3

What sort of goods require specific performance?

Answer 3

Unique goods (e.g., antiques, art, custom-made, etc)

Question 4

S contracts to sell an antique desk to B. S breaches. Can B get SP if she told S that she was buying the desk for a museum although he plans to resell the desk to Conviser for a huge profit? Explain.

Answer 4

No. There is never SP for a misrepresentation.

Question 5

Is SP available for service contracts?

Answer 5

No

Question 6

What is a possible remedy for service contract breach?

Answer 6

Injunctive relief.

Question 7

E contracts with BRI to lecture for BRI. Epstein breaches. Can BRI obtain a court order requiring E to lecture for BRI? Explain.

Answer 7

No. No SP for service contracts.

Question 8

E contracts with BRI to lecture for BRI. Epstein breaches. Can BRI obtain a court order requiring E to abstain from lecturing for a competing bar prep course? Explain.

Answer 8

Yes. Injunctive relief ok here.

Question 9

Describe reclamation.

Answer 9

Goods sold on credit, but buyer hasn’t paid. Seller wants the goods back.

Question 10

What are the three requirements for reclamation to be effective?

Answer 10

Buyer must have been insolvent when he received the goods

Seller must demand return of the goods within 10 days of receipt (becomes a “reasonable time rule” if, before delivery, there had been an express representation of solvency by the buyer)

Buyer still has the goods at the time of demand.

Question 11

For reclamation to be proper, the seller ordinarily must demand the return of the goods within 10 days of receipt. When does it become a “reasonable time” rule?

Answer 11

if, before delivery, there had been an express representation of solvency by the buyer

Question 12

What must be true of the buyer’s financial situation at the time he receives the goods for reclamation to be effective?

Answer 12

Buyer must have been insolvent.

Question 13

On Jan 15, S sells B grits on credit. The grits are delivered on Jan 22. B is insolvent on Jan 22. S learns of B’s financial difficulties and demands return of the grits on Jan 27. B still has the grits on Jan 27. Can S get the grits back by reclamation? Explain.

Answer 13

Yes

Buyer was insolvent when he received the goods

Seller demanded return of the goods within 10 days of receipt

Buyer still had the goods at the time of demand.

Question 14

Define entrustment.

Answer 14

Voluntarily leaving something of yours with someone else.

Question 15

O takes her watch to S Watch Sale and Service (S) for repair. S wrongfully sells O’s watch to B, a BFP. Can O recover her watch from B? Explain.

Answer 15

No. If you entrust your goods to one WHO SERVICES those type of goods, you are at a risk of sale to a BFP. Remedy is limited to a claim against the store.

Question 16

What risk do you put yourself at by entrusting goods to a retailer/servicer in that type of good?

Answer 16

If you entrust your goods to one WHO SERVICES those type of goods, you are at a risk of sale to a BFP. Remedy is limited to a claim against the store.

Question 17

What is the underlying policy of money damages? What is not?

Answer 17

Compensate the plaintiff

NOT punishing the defendant.

Question 18

What should be the first sentence in an essay about money damages

Answer 18

Money damages are intended to compensate the plaintiff, rather than pushing the defendant.

Question 19

After “Money damages are intended to compensate the plaintiff, rather than pushing the defendant,” what should the second sentence be in an essay about money damages?

Answer 19

Compensation is achieved by protecting the plaintiff’s EXPECTATION INTEREST.

Question 20

“Money damages are intended to compensate the plaintiff, rather than pushing the defendant. Compensation is achieved by protecting the plaintiff’s EXPECTATION INTEREST.” What do you talk about next? What do you say next?

Answer 20

Define Expectation.

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

Question 21

How do you determine expectation damages? (formula)

Answer 21

Dollar value of performance without breach

LESS

Dollar value of performance with breach.

Question 22

P contracts to paint O’s house for $1000, payable when P completes the work. P breaches – he does not paint. O hires another painter who charges $1,400. O sues P for beach of k. What is the measure (amount) of O’s damages that O can recover from P for P’s breach of k? Explain.

Answer 22

$400.

“Money damages are intended to compensate the plaintiff, rather than pushing the defendant. Compensation is achieved by protecting the plaintiff’s EXPECTATION INTEREST.”

Expectation simply means that people who contract expect that the other person will not breach. Expectation damages protect that expectation. Expectation damages are determined by taking: The dollar value of the performance without breach LESS dollar value of performance with breach.

Question 23

P contracts to paint O’s house for $1000, payable when P completes the work. P anticipates making $200 profit from this k. O breaches after P has started work and used $100 of paint and labor. P sues O for breach. What is the measure of P’s damages?

Answer 23

$300

“Money damages are intended to compensate the plaintiff, rather than pushing the defendant. Compensation is achieved by protecting the plaintiff’s EXPECTATION INTEREST.”

Expectation simply means that people who contract expect that the other person will not breach. Expectation damages protect that expectation. Expectation damages are determined by taking: The dollar value of the performance without breach LESS dollar value of performance with breach.

Question 24

S sells B an antique car for $30k. B pays the $30k, and S delivers. Although the k provided that all parts of the car were authentic and original, some were not. B keeps the car and sues for breach of k. The jury finds that at the time and place of B’s acceptance of the car, the car as delivered was only worth $20k; the jury also finds that if the car has been delivered as contracted, it would have been worth $34,000.

How much can R recover? Explain.

Answer 24

$14,000.

When a seller delivers goods but their condition constitutes breach, the buyer keeps the goods and is entitled to damages equally the FMV if perfect – FMV as deliver (or the cost of repair).

Question 25

What are a buyer’s damages in a situation in which delivery is effectuated but the goods do not conform?

Answer 25

the buyer keeps the goods and is entitled to damages equally the FMV if perfect – FMV as deliver (or the cost of repair).

Question 26

What are a buyer’s damages if the seller breaches and retains the goods?

Answer 26

market price at the time of discovery of the breach LESS K price; OR

Reasonable replacement price LESS k price

WHICHEVER IS GREATER.

Question 27

S contracts to sell B carpeting for $5,000. S never delivers the carpeting (or B refuses because it was not perfect tender). At the time B learned of the breach, the market price of comparable carpet is $6,600. B buys the replacement carpet for $7,000. How much in damages is B entitled to? Explain.

Answer 27

B can get $2000.

The market price ($6,600) less the k price ($5,000) is $1,600.

The reasonable replacement price ($7,000) less the k price ($5,000) is $2,000.

The latter is greater, so that is the measure of his damages (when S breaches and has the goods).

Question 28

What is the measure of damages when buyer breaches, but buyer keeps the goods?

Answer 28

Contract price.

Question 29

What is the measure of damages when buyer breaches, but seller has the goods?

What is seller can’t resell?

Answer 29

Ordinarily, K Price LESS resale price.

If seller cannot resell, the seller can recover the k price.

Question 30

E contracts to sell his 73 Caddy to COnvsier for $1,000. Conviser breaches. E then sells the Caddy to SS for $800. How much in damages for Epstein? Explain.

Answer 30

$200.

K Price LESS resale price.

Question 31

E contracts to sell his 73 Caddy to COnvsier for $1,000. Conviser breaches. E then sells the Caddy to SS for $1,000. How much in damages for Epstein? Explain.

Answer 31

None.

K Price LESS resale price.

Question 32

S&M Leather contracts to sell off-the-rack leathers to Conviser for $1000. Conviser breaches. S&M sells the very same items to Grey for $1000. Can S&M recover damages? Explain.

Answer 32

Yes. Had Conviser not breached, S&M would have sold TWO sets.

Question 33

S&M Leather contracts to sell off-the-rack leathers to Conviser for $1000. Conviser breaches. S&M sells the very same items to Grey for $1000. How much in damages can S&M recover damages? Explain.

Answer 33

Provable lost profits. Had Conviser not breached, S&M would have sold TWO sets, so they are entitled to whatever profit they would have made on C’s leathers.

Question 34

Incidental damages are always/sometime/never recoverable for the breach of k for the sale of goods.

Answer 34

Always.

Question 35

What are incidential damages ?

Answer 35

Costs incurred in dealing with the breach (storing rejected goods, finding a replacement buyer for a services k)

Question 36

P contracts to paint O’s house for $1000. P breaches. O spends $20 finding another painter, X, who agrees to paint for $1,400. What is the measure of O’s damages?

Answer 36

$400 general PLUS $20 incidental.

Question 37

Provide the definition for “consequential damages”? Remember, it is unique?

Answer 37

Damages arising from P’s special circumstances, but ONLY on situations in which D had reason to know of these special circumstances at the time of the contract.

Question 38

Consequential damages are limited to what type of situations?

Answer 38

Those in which D had reason to know of these special circumstances at the time of the k.

Question 39

M contracts with C carrier to transport goods to another village for repair for $100. C breaches by nonperformance. M is unable to find anyone else who will transport the goods for less than $150 and pays T that must to transport. M sues C for breach? Any consequential damages? Explain.

Answer 39

No, We know nothing special about M. Presumably neither does C.

Consequential damages are those arising from P’s special circumstances. They are limited to situations in which D had reason to know of the special circumstances at the time of the breach.

Question 40

M contracts with C carrier to transport goods to another village for repair for $100. C breaches by nonperformance. M is unable to find anyone else who will transport the goods for less than $150 and pays T that must to transport. M sues C for breach? What is the amount of M’s recoverable damages? Explain.

Answer 40

$50 in ordinary damages.

No consequential damages because we know nothing special about M. Presumably neither does C.

Consequential damages are those arising from P’s special circumstances. They are limited to situations in which D had reason to know of the special circumstances at the time of the breach.

Question 41

M contracts with C carrier to transport goods to another village for repair for $100. C breaches by nonperformance. M is unable to find anyone else who will transport the goods for less than $150 and pays T that must to transport.

C’s breach resulted in a 5-day delay and M lost $1,000 in profits from the closure of M’s Mill. M sues C for breach. Any consequential damages? If no, why not? If yes, how much recoverable? Explain on all fronts.

Answer 41

Yes, we know about M’s special circumstances – her mill was forced to close.

HOWEVER, they are not recoverable because D was not aware of the special circumstances.

Question 42

M contracts with C carrier to transport a broken shaft to another village for repair for $100. M tells C before the k that the mill was closed because of the broken shaft and would remain closes until the shaft was repaired and returned.

C breaches by nonperformance. M is unable to find anyone else who will transport the goods for less than $150 and pays T that must to transport.

C’s breach resulted in a 5-day delay and M lost $1,000 in profits from the closure of M’s Mill. M sues C for breach.

What is the measure of M’s Damages?

Answer 42

$50 general + $1000 consequential.

Consequential here because M has special circumstances and C knew of them.

Question 43

When we have ordinary damages, what two other types of damages can we add? What two types do we subtract?

Answer 43

Add: Incidental and consequential

Subtract: avoidable damages (damages that could have been avoided w/o undue burden on the plaintiff) and damages that cannot be established with reasonable certainty.

Question 44

What are avoidable damages?

Answer 44

Those damages which could have been avoided without undue burden on the plaintiff.

Question 45

P contracts to paint O’s house for $1,000. P anticipates that she will makes $200 profit from painting. O breaches after P has incurred $100 of costs for paint and labor. Notwithstanding O’s breach, P finished painting and incurs an additional $700 in costs. How much can P recover? Explain

Answer 45

$300. Ordinary damages (Dollar value of performance without breach LESS Dollar value of performance with breach).

Her avoidable damages ($700) don’t count.

Question 46

P contracts to work for L law firm from 9/1/15 to 8/31/16 for $100k. On August 29, 2015, L breaches. P sues L for breach.

L pleads and proves that later, on 8/30/15, a comparable law firm in the same city offered P a comparable job for the same period, paying her $99k. How much can P recover from L? Explain.

Answer 46

$1000.

Cannot turn own other, comparable opportunities to maintain damages. This is a form of avoidable damages.

Question 47

Damages that cannot be established with reasonable certainty are most likely to appear in what type of fact patterns?

Answer 47

Services k and a plaintiff engaged in a new business or a new business activity.

Question 48

Epstein, who has never promoted anything, contracts with Kinky Friedman for a Texas Jewboys reunion concert in Piggot, AK. Kinky breaches weeks before the concert. Should Epstein be able to recover damages protecting his expectation interest? Explain.

Answer 48

No.

There is no way to tell with certainty what the damages should be here. This is Kinky Friend in a Podunk little town. No way to tell how many people will show up.

Question 49

Epstein, who has never promoted anything, contracts with Kinky Friedman for a Texas Jewboys reunion concert in Piggot, AK.

Epstein has spent $2k arranging for and promoting the concert.

Kinky breaches weeks before the concert. Should Epstein be able to recover the $2000? Explain.

Answer 49

Yes. Reliance damages

Question 50

Liquidated damages are most likely to come up in a fact pattern involving what?

Answer 50

A k with a provision fixing damages.

Question 51

A liquidated damages provisions will be considered invalid if it can be construed as a what?

Answer 51

Penalty

Question 52

For a liquidated damages provisions to be valid, it must be a _______ ______ of damages.

Answer 52

Reasonable forecast

Question 53

B contracts to build a store for O. Contract fixes damages for delay at $10k. What sort of damages?

Answer 53

Liquidated.

Question 54

B contracts to build a store for O. Contract fixes damages for delay at $10k. Is the provision valid?

Answer 54

Probably not, as it does not seem like a reasonable forecast.

Question 55

Anytime there is a services k AND fixed delay damages, the set amount is probably not a reasonable forecast. Why not?

Answer 55

A true reasonable forecast will provide a range of damages that is dependent on the facts.

Question 56

When there is an argument raised about avoidable damages, who carries the burden of pleading? The burden of proof?

Answer 56

Defendant x 2