Remedy?

Question 1

Baseline damages awarded for contracts

Answer 1

Expectation damages

Amount of money breaching party would need to pay non-breaching party to put non-breaching party back where she would have been if promise had been kept (What expect to get under K – honor the promise)

Question 2

Baseline damages awarded for promissory estoppel

Answer 2

Reliance damages

Amount of damages that put the promisee where she would have been if promise had never been
made in the first place

• Out of pocket costs
• Opportunity costs- value of opportunity given up b/c of promise

Question 3

Damages are compensatory, not punitive for a K breach

Answer 3

Hawkins (Hairy Hand)

Question 4

Measure for damages=difference b/w what expected and what got

Answer 4

Hawkins (Hairy Hand)

Question 5

The purpose is to put P in as good a position as he would have been in had D kept his K

Answer 5

Hawkins (Hairy Hand)

Question 6

K for goods, Breach by seller

Answer 6

D = Market Price – K Price

D = Cover Price (Go buy from someone else) – K Price

• Cover price: needs to be for substantially similar product – if it is a unique good, cannot cover
• If seller breaches, money does not make buyer whole – wanted unique good

Question 7

K for goods, Breach by buyer

Answer 7

D = K Price – Market Price

D = K Price – Resale Price

• Resale price: must be reasonable – after breach cannot sell for less and sue for difference
• No market price for unique good (seek remedy of specific performance depending on who breaches)

Question 8

K for nongoods, Breach by seller

Answer 8

D = cost of completion – K price remaining [Nursing Home]

If K price remaining higher than cost of completion, no damages [Nursing Home]

Question 9

K for nongoods, Breach by buyer

Answer 9

D = cost incurred prior to breach + lost profits – payments received prior to breach [Aiello]

K price = Costs + Profits

K price = Costs Incurred + Costs Saved by Breach + Profits

K price – Costs Saved = Costs Incurred + Profits

D = K price – costs saved by breach [Wired Music]

Question 10

Damage Limitation Concepts:

Answer 10

Use after calculate damages to see if need to adjust them:

a. Mitigation
b. Foreseeability
c. Certainty

Question 11

Baseline Rule

Answer 11

Cost of Completion

To get diminution in value instead, need to show:

• Cost of completion requires unreasonable economic waste
• Breaching party operating in good faith
• Breach immaterial

Question 12

In order to get diminution in value, cost of completion must require unreasonable economic waste

Answer 12

Peevyhouse

Question 13

For diminution in value, need to show breaching party was operating in good faith

Answer 13

Droher

Question 14

Distinction between dwelling live in (more likely to give cost of completion b/c envision house to live in –
particular structure) and dwelling to sell (more likely to give diminution in value)

Answer 14

Fox

Question 15

Damages for breach of K should be measured as of date of breach

Answer 15

Grossman

Question 16

After an absolute repudiation or refusal to perform by one party to a K, the other party cannot continue to perform and recover damages based on full performance

Answer 16

Rockingham

Question 17

A plaintiff cannot hold a defendant liable for damages which need not have been incurred

Answer 17

Rockingham

Question 18

Nonbreaching party has a duty to mitigate damages

Answer 18

Rockingham

Question 19

Avoidability as a Limitation on Damages:

1. Damages are not recoverable for loss that the injured party could have avoided without undue risk,
   burden, or humiliation
2. The injured party is not precluded from recovery by rule stated in (1) to the extent that he has made
   reasonable but unsuccessful efforts to avoid loss

Answer 19

RS 350

Question 20

Rule of mitigation of damages may not be involved by a contract breaker as a basis for hypercritical examination of
the conduct of the injured party or merely for the purpose of showing that the injured person might have taken steps which seemed wise or would have been more advantageous to the defaulter

Answer 20

Kellett

Question 21

Not unreasonable conduct to award K at somewhat increased cost to one whose performance had on previous
occasions proved satisfactory

Answer 21

Kellett

Question 22

Where a choice has been required between two reasonable courses, the person whose wrong forced the choice
cannot complain that one rather than the other was chosen

Answer 22

Kellett

Question 23

Injured party is required to incur only slight expense and reasonable effort in mitigating his damages

Answer 23

Bank One

Question 24

Where both the plaintiff and defendant have had equal opportunity to reduce the damages by the same act and it is
equally reasonable to expect the D to minimize damages, D is in no position to contend that P failed to mitigate nor will award be reduced on account of damages D could have avoided as easily as P

Answer 24

S.J. Groves

Question 25

General rule is that the measure of recovery by a wrongfully discharged employee is the amount of salary agreed upon for the period of service, less the amount which the employer affirmatively proves the employee has earned or with reasonable effort might have earned from other employment D= Salary – Salary got from alternative job/could have earned (of substantially similar employment)

Answer 25

Shirley MacLaine

Question 26

Before projected earnings from other employment opportunities not sought or accepted by the discharged employee can be applied in mitigation, the employer must show that the other employment was comparable, or substantially similar, to that of which the employee has been deprived

Answer 26

Shirley MacLaine

Question 27

The employee’s rejection of or failure to seek other available employment of a different or inferior kind may not be resorted to in order to mitigate damages

Answer 27

Shirley MacLaine

Question 28

A wrongfully discharged employee is not necessarily obligated to mitigate damages by accepting alternative employment at a distance from his home

Answer 28

Punkar

Question 29

Expenses reasonably spent trying to mitigate can be recovered as part of K damages (add it on at the end)

Answer 29

Mr. Eddie

Question 30

Cannot take unreasonable steps to mitigate

Answer 30

Mr. Eddie

Question 31

If accept an inferior job, that wage is subtracted from the damages (but do not need to accept inferior job)

Answer 31

Whetherholt

Question 32

Foreseeability How to show D should have known: *P told them – put D on notice (information forcing rule) *Objectively obvious given nature of business (context) – natural consequence of breach – the reasonable person would know that this cost would flow from type of breach

Answer 32

Hadley

Question 33

Damages need to be reasonably foreseeable

Answer 33

Hadley

Question 34

Damages cannot be speculative, possible, or imaginary, must be reasonably certain

Answer 34

Kenford

Question 35

Requirement that damages be reasonably certain does not require absolute certainty

Answer 35

Ashland

Question 36

Requires only that damages be capable of measurement based upon known reliable factors without undue speculation

Answer 36

Ashland

Question 37

Lost profits must also be established with reasonable certainty

Answer 37

Ashland

Question 38

New Business Rule

Answer 38

Prohibits recovery of lost profits that P claims would have been generated by a proposed new business on ground that in such cases profits are too speculative