Remedies: Monetary Flashcards
What is the general rule re: recovery of money damages ?
Damages can be recovered ONLY to the extent that:
- they can be proved with REASONABLE CERTAINTY; and
- could not be avoided with reasonable effort
What are the different types of compensatory damages?
- Expectation Damages
- Reliance Damages
- Consequential Damages
- Incidental Damages
What is the standard measure of damages in most cases?
“expectation damages” - damages reflecting the expectancy of the K
What are “reliance damages”? When will they be recovered?
“reliance damages” - designed to put P in the position she would have been in had the K never been formed
If P can’t prove expectation damages w certainty, then she may elect to recover those damages based on her reasonable reliance on the K
What are “consequential damages”?
“consequential damages” - special damages that reflect losses above and beyond standard expectation damages
- arise bc of non-breaching party’s unique circumstances, and most often consist of lost profits
When may “consequential damages” be recovered?
Consequential damages may be recovered ONLY IF:
1. at time K was made, reasonable person would have FORESEEN the damages as a probable result of the breach
NOTE: in K for SOG, only BUYER may recover consequential damages
What are “incidental damages”?
“incidental damages” - typically include expenses reasonably incurred in connection with K as a result of breach
- typically seen in SOG
What is the rule re: “punitive damages” and contracts cases?
Punitive damages are generally not recoverable in contract
What is the rule re: “nominal damages” and contract cases?
Nominal (token) damages may be awarded when breach is shown but actual loss is not proven (example –> award of $1)
What are “liquidated damages”?
- Parties to K may stipulate what damages are to paid in event of breach.
(see - limitations on enforcement)
When are “liquidated damages” enforceable?
- damages for breach must be DIFFICULT TO ESTIMATE or ASCERTAIN at the time K is formed; AND
- Amount agreed must be a REASONABLE FORECAST of compensatory damages in event of breach
If liquidated damages clause is UNREASONABLE –> court will view it as a penalty and will not enforce it
NOTE: most courts say that P may recover liquidated damages even if there are no actual damages
Under UCC, what are buyer’s damages if:
- Seller does not deliver; OR
- Buyer rejects good; OR
- Buyer revokes acceptance
Buyer can choose:
[difference between contract price & market price at time buyer learned of breach] + [incidental and consequential damages] less expenses saved by breach; OR
[difference between contract price & cover price] + [incidental and consequential damages] less expenses saved by breach; OR
IF buyer chooses COVER price –> Buyer must make a reasonable K for substitute goods in good faith and without unreasonable delay
“cover price” = cost of replacement goods
Under UCC, what are Buyer’s damages if Buyer accepts Seller’s non-conforming goods?
Difference between:
[value as delivered] AND [value as should be] + [incidental and consequential damages]
NOTICE REQUIREMENT –> Buyer must give notice within reasonable time after she discovers or should have discovered defect
Under UCC, what are Buyer’s damages if Seller anticipatorily breaches K?
difference between:
[market price at time Buyer learned of breach] AND [contract price]
Under UCC, when is Seller liable for consequential damages?
Seller is liable for consequential damages IF:
- he had reason to know of buyer’s general or particular requirements; AND
- the subsequent loss could not reasonably be prevented by cover
If buyer is in business of reselling goods –> Seller is deemed to have knowledge of resale
If seller KNOW goods are to be used in manufacturing –> deemed to know breach would cause disruption in production leading to loss of profits