Remedies (Module 8)

Question 1

Specific Performance (Nonmonetary Remedy)

Answer 1

Available for sales of land and unique goods; never available for breach of service K

Question 2

Covenant not to Compete (Nonmonetary Remedy)

Answer 2

Most courts will grant if:
1) services are unique
2) the covenant is reasonable; will be rxble if:
- rxbly necessary to protect legit interest of person enforing it
- rxble in geographic scope and duration
- does not harm the public

Question 3

Equitable Defenses to Action for Specific Performance

Answer 3

1) Laches (claim that P has delayed bringing the action and that action has unduly prejudiced the D)
2) Unclean hands (party seeking SI is guilty of wrongdoing in the transaction)
3) Sale to a BFP

Question 4

Buyer’s Nonmonetary Remedies (UCC)

Answer 4

1) cancellation of K
2) made prepayment and seller hasn’t delivered, can still acquire the goods if:
- seller is insolvent 10 days after receiving buyer’s first payment
- goods were purchased for family/personal/household purpose
- cover is impossible

3) specific performance if goods were unique

Question 5

Seller’s Right to Recover Goods - Buyer’s Insolvency (UCC)

Answer 5

Buyer’s Insolvency
- if buyer received goods on credit and is insolvent, seller can reclaim goods if make demand within 10 days of buyer receiving
- 10 day limitiation does NOT apply if buyer misrepresented themselves as solvent w/in the past 3 months before delivery

Question 6

Seller’s Right to Recover Goods - Shipped/Stored with Bailee (UCC)

Answer 6

If buyer is insolvent/breaches K, then seller can stop delivery of goods in possession of carrier/bailee

Very difficult for seller to force buyer to accept goods, only when seller is unable to resell goods to others at a rxble price

Question 7

Right to Demand Assurances

Answer 7

• If there are rxble grounds for insecurity with respect to party’s performance, the other party may demand in writing assurnaces that performance will happen at proper time
• until they receive adequate assurance they can suspend performance
• if no assurance within 30 days, then can treat it as repudiated

Question 8

Expectation Damages
(Monetary Contract Remedy)

Answer 8

Expectation Damages: sufficient damages for them to get substitute performance (like if had to pay someone else more than agreed with original party to do it, breaching party owes the difference) or to compensate person for their expected profit (expected to profit $2, will get $2 from breaching party)

• Certainty Rule: P must show that losses suffered were certain in nature and not speculative; can do so by market comparisons and things like that

Question 9

Reliance Damages
(Monetary Contract Remedy)

Answer 9

If expectation is too speculative, enough $ to put P in position they would have been in had contract never been formed

Question 10

Incidental, Nominal, Punitive, Damages
(Monetary Contract Remedy)

Answer 10

• Incidental: always recoverable, measured by costs incurred by dealing w/ breach
• Punitive: generally not awarded in contract cases
• Nominal: allowed when breach occurred but no actual loss proven

Question 11

Consequential Damages (Monetary Contract Remedy)

Answer 11

• Reflect losses over and above standard expectation
• Recovered only if at the time the K was made a rxble person would have foreseen the damages as a probable result of breach; breaching party must know or had reason to know of the special circumstances
• if buyer is in goods for resale business, seller is deemed to have knowledge of the resale
• if buyer is in manufacturing business, seller deemed to know that breach would cause disruption in production leading to loss of profits

Question 12

Liquidated Damages

Answer 12

Pre-agreed to amount that breaching party will pay if breach occurred (must be rxble in view of the actual or anticpated harm); will be enforceable if:
- damages for breach were difficult to estimate at time K was formed
- amount is a rxble forecast; if it is unrxble, then court will construe as a penalty and won’t enforce

Question 13

Buyer Remedy if Seller Doesn’t Deliver/Buyer Properly Rejects or Revokes (UCC)

Answer 13

Either the difference between the K price and 1) market price or 2) cost of covering, plus incidental and consequential damages, minus expenses saved as a result of seller’s breach
- if buyer covers must do so with a rxble contract
- market price is determined at the time buyer learned of the breach

Question 14

Buyer Remedy if Seller Delivers Nonconforming Goods & Buyer Accepts (UCC)

Answer 14

Warranty Damages: difference between = value of the goods as delivered & value they would have been if they had conformed + incidental/consequential
- buyer must give notice of the defect within rxble time of discovering/should have discovered

Question 15

Seller Remedy Where Buyer Repudiates/Refuses to Accept Conforming Goods (UCC)

Answer 15

In addition to incidental damages, seller can either:
- resell goods and recover difference between contract price and resale price
- recover difference between market price (measured at time/place of delivery) and contract price
- “lost profits” where above measures are inadequate bc seller could have made additional sales; if seller’s supply is unlimited they are a lost volume seller

Question 16

Remedy for Breach of Sale of Land Contract

Answer 16

difference between the contract price and the fair market value

Question 17

Remedy for Breach of Employment Contract

Answer 17

Breach by Employer
- standard measure is full contract price (may be reduced if e’ee doesn’t mitigate)

Breach by Employee
- employer entitled to recover cost of replacing employee

Employment at Will
- termination of at-will does not result in any breach; position that is characterized as “permanent” is at will

Question 18

Remedy for Breach of Construction Contracts

Answer 18

• If breached by owner builder entitlted to profits that would have resulted + any costs expended
• if breached by builder owner is entitled to the cost of completion + rxble compensation for delay (builder can offset for work performed to prevent unjust enrichment of owner)

Question 19

Remedy for Breach of Installment Payments Contract

Answer 19

Aggrieved party only entitlted to payment for the missed payment, unless there is an acceleratoin clause in which case can get entire amount

Question 20

Restitution

Answer 20

• Based on preventing unjust enrichment when one has conferred a benefit on another without intent of it being gratuitous
• can be a remedy when a contract is breached, where it’s unenforceable, or where there was no contract in the first place
• where K was unenforceable or never actually existed, action to recover restitution is an action for “quantum meruit”

Question 21

Measure of Restitution Damages

Answer 21

Generally is the value of the benefit conferred, but can also be measured by “detriment” suffered by the P

When contract was breached:
- if P hasn’t fully performed, can cancel the K and sue for restitution to prevent unjust enrichment
- if have fully performed, limited to the their damages under the K

Quasi-Contract Action: When there was no K in the first place, can be recovered if:
- p conferred a benefit by rendering services/expending properties
- p had rxble expectation of being compensated
- D K/SHK of p’s expectation
- D would be unjustly enriched if allowed to retain beenfit without compensating

If K was unenforceable can get restitution also in a quasi-contract action to prevent unjust enrichment

Question 22

Recission

Answer 22

• Remedy where the original K is considered voided and rescinded and parties left as if K was never made
• grounds for recission must have occurred before or at the time the K was formed

Grounds for recission are:
- mutual mistake
- unilateral mistake (if other party k/shk)
- unilateral mistake if hardship by mistaken party is super extreme
- misrepresentation of law/fact
- duress, undue influence, fraud, illegality, lack of capacity, etc.