Remedies supplement

Question 1

• Limitations on Right to Recover Expectation Damages

o Aggrieved party may not be able to recover the full amount in the following situations:

Answer 1

 Situation #1: expectation damages can’t be calculated with reasonable certainty
• Mathematical certainty is not required, but the court can’t pull the numbers from thin air
EXAMPLE: A business with no profit history
 Situation #2: damages are unforeseeable
 Situation #3: where damages can be mitigated

Question 2

What is the purpose of reliance damages?

Answer 2

• Reliance Damages: designed to restore the aggrieved party to the position he was in prior to the K.

Question 3

T or F restitution damages are not available if the aggrieved party has fully performed but available when partially performed.

Answer 3

True

EXAMPLE: Subcontractor completes contractual performance and General Contractor refuses to pay. Subcontractor has no right to seek restitutionary damages and is entitled to recovery of the contract price only.

Question 4

• Liquidated Damages Provisions (LDP): Designed to provide damages of their own choosing in the event of breach
o Such a provision is:
 Enforceable if court finds it to be valid liquidated damages clause designed to compensate for breach
 Unenforceable if court finds

Answer 4

 Unenforceable if court finds it constitutes a penalty designed to punish a breach

Question 5

what are incidental damages and when can they be recovered?

Answer 5

 Buyer or seller can recover incidental damages, which are the expenses incurred in either seller dealing with the goods after buyer’s breach (e.g., storing them) or buyer arranging for cover (e.g., transportation costs)

Question 6

o First type: Specific Performance
 Extraordinary remedy by which breaching party is ordered to perform
 Only available when

Answer 6

 Only available when monetary award is considered inadequate

Question 7

Specific Performance is Generally Available:

• Money damages are generally presumed inadequate when party is purchasing:

Answer 7

o Unique objects (works of art and precious heirlooms)

o Real Property

Question 8

Specific performance as a remedy is not available for?

Answer 8

•Contracts for: Personal services and

Long-term relationships

Question 9

Explain negative injunction

Answer 9

 Orders prohibiting breaching party from doing something
 Most common and important area is the employment setting
 Availability turns on whether former employer is seeking mid-term or post-employment relief

Question 10

• Mid-Term Relief = When employee under K for a specific period of time and breaches by departing before the end of that period, a negative injunction will be available, even absent a K prohibition, to prevent competing if employee’s services are unique or extraordinary (pro athletes and entertainers)

famous example: hint opera singer

Answer 10

EXAMPLE: In the famous case of Lumley v. Wagner, an opera singer under contract to sing at Her Majesty’s Theatre for a three-month period was persuaded to depart mid-contract to begin a concert series at a competing venue. Because her services were unique and extraordinary, the court granted a negative injunction barring her from performing at any competing venue for the duration of the contract term.

Question 11

• Post-Employment Relief (Covenants not to Compete) = K provision that prohibits post-employment competition.
o Validity depends on 3 factors/considerations:

Answer 11

 Consideration #1: is there a significant business justification for enforcing post-employment restraints?
EXAMPLE: An employee with access to trade secrets and entrepreneurial knowledge.
 Consideration #2: is the scope of the non-compete clause reasonable in duration and geographical reach?
 Consideration #3: is there an express provision? (court won’t imply one)

Question 12

• General Unjust Enrichment (No Express Contract):

Answer 12

• General Unjust Enrichment (No Express Contract): a party that confers benefits on another may recover their value where it is unjust for the recipient to retain the benefits without paying, even absent any express or implied-in-fact K. Two recurring situations where recovery has been held appropriate:
o Medical services provided by a medical professional; and
o Benefits conferred by mistake to one who availed himself of the benefits at issue
EXAMPLE: After a hurricane, Owner hires Contractor to perform repairs on his storm-damaged home. Because of confusion caused by damage to street signs and mailboxes, Contractor performs the repairs on the wrong house. Contractor is entitled to restitution from the benefiting homeowner if the latter was aware of Contractor’s mistaken efforts and remained silent.
o A person who bestows benefits without request by the benefitting party is considered an “officious intermeddler,” not entitled to any recovery
 Exception: doctors and other health care professionals who provide emergency health care to a patient unable to consent (e.g., because too ill or unconscious)

Question 13

• Agreed-To Remedies:
o Parties may contract out of the legal and equitable remedies available under the law by specifying agreed-to remedies in the K
o Two typical forms:

Answer 13

 Liquidated damages provisions; and

 Provisions limiting or excluding damages

Question 14

o Provisions Limiting or Excluding Damages:
 Provisions that limit or alter the measure of damages available
EXAMPLE: An exclusion of consequential damages.
 Exclusive remedies, such as limits to repair or replacement of defective goods
 Such provisions are generally enforceable unless

Answer 14

unless they are unconscionable or they fail of their essential purpose

Question 15

T or F  Limitation of consequential damages for personal injury in the case of consumer goods is prima facie unconscionable

Answer 15

True