Remedies under property and contract law

Question 1

Land contracts

Answer 1

Damages
• S’s breach—B entitled to difference between contract price and market value (loss-of-bargain) unless good-faith breach (then just out-of-pocket damages)
• B’s breach—S entitled to difference between market value and contract price (loss-of-bargain)

Other remedies—SP (land is unique), rescission/restitution (non-breaching party) and equitable conversion

Question 2

Personal property contracts

Answer 2

B’s and S’s damages measured by market price – contract price plus incidental/consequential damages (less expenses saved from other party’s breach)

Question 3

Building contracts

Answer 3

1. Owner’s damages—based on reduction in market value of building due to breach (value damages) or the cost to complete building or remedy any defect (cost damages), plus special damages
2. Builder’s damages—builder can recover amount still owed by owner under the contract (complete building) or lost profit (incomplete building)
3. Other remedies—rescission/restitution

Question 4

Employment contracts

Answer 4

1. Employee’s damages—total compensation plus any incidental/consequential damages less income that was earned or that could have been earned during the term of the contract (avoidable consequences)
2. Other remedies—rescission/restitution

Question 5

Unenforceable contracts

Answer 5

1. Statute of Frauds (oral contracts)—Damages generally not recoverable. But, when estoppel applies, P can recover reliance damages unless restitution provides an adequate remedy
2. Impracticability/frustration of purpose—P can recover through restitution for any benefit conferred on D in reliance on agreement; benefit usually is market value of P’s performance
3. Lack of capacity—restitution
4. Illegality—restitution permitted in very limited circumstances (e.g. disproportionate forfeiture)

Question 6

Mistake

Answer 6

Reformation/restitution

Question 7

Contractual misconduct

Answer 7

1. Duress and undue influence—restitution
2. Unconscionability (defensive remedy)—denial of SP, monetary damages, or enforcement of contract; or reformation of contract to avoid an unconscionable resultp