Remedies: Monetary Flashcards

1
Q

What is the general rule re: recovery of money damages ?

A

Damages can be recovered ONLY to the extent that:

  1. they can be proved with REASONABLE CERTAINTY; and
  2. could not be avoided with reasonable effort
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2
Q

What are the different types of compensatory damages?

A
  1. Expectation Damages
  2. Reliance Damages
  3. Consequential Damages
  4. Incidental Damages
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3
Q

What is the standard measure of damages in most cases?

A

“expectation damages” - damages reflecting the expectancy of the K

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4
Q

What are “reliance damages”? When will they be recovered?

A

“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

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5
Q

What are “consequential damages”?

A

“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
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6
Q

When may “consequential damages” be recovered?

A

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

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7
Q

What are “incidental damages”?

A

“incidental damages” - typically include expenses reasonably incurred in connection with K as a result of breach

  • typically seen in SOG
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8
Q

What is the rule re: “punitive damages” and contracts cases?

A

Punitive damages are generally not recoverable in contract

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9
Q

What is the rule re: “nominal damages” and contract cases?

A

Nominal (token) damages may be awarded when breach is shown but actual loss is not proven (example –> award of $1)

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10
Q

What are “liquidated damages”?

A
  • Parties to K may stipulate what damages are to paid in event of breach.

(see - limitations on enforcement)

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11
Q

When are “liquidated damages” enforceable?

A
  1. damages for breach must be DIFFICULT TO ESTIMATE or ASCERTAIN at the time K is formed; AND
  2. 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

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12
Q

Under UCC, what are buyer’s damages if:

  • Seller does not deliver; OR
  • Buyer rejects good; OR
  • Buyer revokes acceptance
A

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

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13
Q

Under UCC, what are Buyer’s damages if Buyer accepts Seller’s non-conforming goods?

A

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

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14
Q

Under UCC, what are Buyer’s damages if Seller anticipatorily breaches K?

A

difference between:

[market price at time Buyer learned of breach] AND [contract price]

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15
Q

Under UCC, when is Seller liable for consequential damages?

A

Seller is liable for consequential damages IF:

  1. he had reason to know of buyer’s general or particular requirements; AND
  2. 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

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16
Q

Under UCC, when is Buyer liable for consequential damages?

A

Never

17
Q

Under UCC, what are Seller’s damages if:

Buyer repudiates; OR
Refuses to accept conforming goods

A

Three options:

  1. recover difference between [market price as of delivery date] and [contract price] + [incidental damages] less [expenses saved]
  2. resell goods, and recover difference between [contract price] and [resale price] + [incidental damages] less [expenses saved]
  3. IF “lost volume seller” (ie unlimited volume) —> recover difference between [contract price] and [cost to seller] + [incidental damages] less [expenses saved]
18
Q

Under UCC, what are Seller’s damages if:

  • Buyer has accepted goods and not paid; OR
  • Buyer has NOT accepted, and Seller is unable to resell them at any reasonable price; OR
  • goods are lost/damaged while risk of loss is on buyer
A

In this case, Seller may bring an action “for price”:

[Action for full contract price] + [incidental damages] less [expenses paid]

19
Q

What are the damages for breach of land sales K?

A

difference between

[contract price] and [fmv of land]

20
Q

With regards to employment K’s, what are damages for breach by employer?

A

full contract price (regardless of when breach occurred)

NOTE: may be reduced if EE fails to mitigate if ER can prove another position is available

21
Q

With regards to employment K’s, what are damages for breach by employee?

A

employer = entitled to cost of replacing EE

[replacement EE’s wages less breaching parties wages]

22
Q

With regards to a construction contract, what are the damages if there is a breach by owner?

A

If before completion –> [expected profit] + [costs expended]

If after completion –> [contract price] + [interest]

23
Q

With regards to a construction contract, what are the damages if there is a breach by builder?

A

[costs of completion] + [damages from delay] - [quasi-contract recovery for benefit conferred by builder]

If breach is ONLY late performance –> owner is entitled to damages incurred bc of late performance

24
Q

What is the rule when a construction task is not properly performed?

(Example –> wrong type of pipe used)

A
  • owner is entitled to cost of fixing defect

HOWEVER –> unless there is special significance and it is communicated to builder, court will not make order that results in undue economic waste.

25
Q

What is the rule if contract calls for payments in installments, and payment is not made ?

A
  • there is only a PARTIAL breach
  • aggrieved party is limited to recovering ONLY the missed payment, NOT the entire contract price

HOWEVER –> K may include an acceleration clause making the entire amount due on late payment, in which case aggrieved party may recover full amount

26
Q

What is the general rule re: mitigation of damages?

A

At common law –> non-breaching party generally has duty to mitigate damages. Mitigation REDUCES recovery, but does NOT prohibit recovery.

Under UCC –> Rule of mitigation does NOT apply.

  • Seller is not required to re-sell
  • Buyer is not required to cover

Market damages are always available if Seller does not re-sell, or Buyer does not cover.

HOWEVER –> Seller cannot bring action against buyer for FULL contract price UNLESS:

  • goods cannot be resold at reasonable price; OR
  • goods were destroyed while buyer bore ROL