Damages Flashcards
Expectation Damages
Standard measure of money damages
- Puts the parties in the economic position they would have been in if the K had been performed (i.e., if the breach never occurred)
Note: When in doubt, look for the answer that most closely gives damaged party what she would have received absent the breach
Reliance Damages
Alternative measure used when expectation damages are too speculative
- Designed to compensate P based on the value of her performance and put P in the position they would have been in had the K never been formed
Consequential Damages
Forseeable losses indirectly resulting from a breach (e.g. lost profits); recoverable if:
1) DAMAGES ARE FORESEEABLE result of the breach; and
2) When K was formed, D had reason to know P would suffer special, unpreventable, or unexpected damages in the event of a breach
UCC - Only buyers can recover
Incidental Damages
Commercially reasonable expenses incurred by the non-breaching party in UCC Ks (e.g. costs of inspecting returning, storing, reselling goods)
Duty to Mitigate
P cannot recover reasonably avoidable damages, but can recover for costs of avoiding further damages
When are non-monetary remedies available?
Certain non-monetary remedies (i.e. equiable relief) may be available if money damages are unavailable or inadequate
Specific Performance
Usually only available for Ks involving real estate or unique goods (e.g. antiques, art)
- For service Ks, injunctions preventing breach may be available (e.g. injunction enforcing non-compete clause)
Rescission
Cancellation of a K
- Purpose is to restore parties to their positions before K was made
- often arises where there is mistake, misrepresentation, duress, or some other defense to a K enforcement or formation
Reformation
Remedy whereby a K is changed so that it reflects parties original intent
- can arise where there is a mistake in K formation such that the final K caries from a prior written agreement of parties
- Can also arise where K is inaccurate sue to some misrepresentation
Reclamation
In UCC Ks, unpaid sellers may stop delivery or reclaim goods from an insolvent buyer
- Unpaid seller generally cannot reclaim goods from subsequent buyers
Restitution Damages
Arise where a party has been unjustly enriched
- Awarded based on value of the benefit wrongfully conferred
- Party cannot recover both expectation damages and restitution damages
Liquidated Damages - Definition
Agree upon K provisions that stipulate specified damages upon the occurrence of a breach
Liquidated Damages - Requirements (2)
Liquidated damages provisions are valid only if:
1) Damages are difficult to project at time of K formation; and
2) The provision is a reasonable estimate of actual damages
Duty to Mitigate
P cannot recover reasonably avoidable damages
- i.e P must refrain from incurring additional losses after receiving notice of breach
- P may recover for the cost of mitigation (i.e. cost to avoid incurring further damages)
- D bears the burden of showing P’s failure to mitigate
Duty to Mitigate - Employment
P’s damages can be reduced if D can show a comparable job in the same locale was available to P
