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Question 1

When are nominal damages given?

Answer 1

If the aggrieved party hasn’t suffered any actual damages, usually anything from a dollar or below is given to show vindication of the wrong

Question 2

What are non-compensatory damages?

Answer 2

Nominal damages and punitive damages

Question 3

What are the two reasons that nominal damages might be given?

Answer 3

• to establish a precedent

- if substantial damage has probably occurred but can’t be actually established

Question 4

What are punitive damages for in contacts?

Answer 4

Punishing malicious, willful, and wanton conduct and to deter others

Question 5

What is rescission?

Answer 5

An order that says parties are no longer contractually obligated to each other

Question 6

What is quantum meruit?

Answer 6

Payment to restore the service providing party to the status quo at the time of breach

Question 7

Why can’t you sue for quantum meruit if performance is complete?

Answer 7

Because that would mean suing for damages

Question 8

What is an example of quantum meruit?

Answer 8

Hiring someone to paint your house for $5000, and when he’s just about finished you tell him to leave. The value of his work at that point was $7000. He will be given $7000 because he recovers the value of the benefit conferred.

Question 9

If the reason for stopping performance is one in good faith, does that mean the defendant doesn’t owe quantum meruit?

Answer 9

No, he still owes the value of the work performed

Question 10

What is a third-party contract?

Answer 10

When the performance/benefit is given to someone that isn’t a party. The third-party stands in the shoes of the contracting party, is expressly named as a third-party beneficiary, and performance runs directly to him.

Question 11

A third-party must have been what in order for third-party contract to be valid?

Answer 11

Contemplated when the contract was made

Question 12

What is a classic example of a third-party contract?

Answer 12

Life insurance where the policyholder and the company enter a contract, but the benefit goes to a third-party

Question 13

What does a contract need in order for it to be a TPB contract?

Answer 13

One promise whose benefit goes to a third-party

Question 14

Is it possible to have more than one third-party beneficiary in one contract?

Answer 14

Yes

Question 15

Even though someone is a third-party beneficiary, why might he not have a claim against the promisor?

Answer 15

Because his rights come from the contract between the original contracting parties

Question 16

What are the key steps in TPB situations?

Answer 16

• label the parties
• consider defenses
• look at vesting

Question 17

What are the two different views on TPB situations?

Answer 17

• CL: not enforceable because third-party had to have given consideration and been in privity
• Modern: TPB can sue

Question 18

What are the two different views on TPB contracts?

Answer 18

• majority: R1

- minority: R2

Question 19

Under the majority view for TPB contracts, what is the approach?

Answer 19

Classify the TPB as either:

• donee beneficiary
• creditor beneficiary
• incidental beneficiary

Question 20

What is a donee beneficiary under the first restatement view of TPB?

Answer 20

Promisee intends to give plaintiff a gift (either a promise or to confer a right on him). Gives donee a direct claim against the promisor

Question 21

Under third-party beneficiary contract, what are the three major parties?

Answer 21

• promisor: usually the defendant or the person that enforcement is sought against
• promisee: person making the promise
• plaintiff: the alleged beneficiary or the person getting the benefit

Question 22

Does the promisee under a donee beneficiary situation owe a duty to the beneficiary?

Answer 22

No

Question 23

If a promise is to make a gift to a TPB, is it OK if the primary purpose was a gift, but that wasn’t the only purpose?

Answer 23

Yes

Question 24

If you see your lawyer to make a will and leave everything to your husband, what kind of beneficiary is the husband considered?

Answer 24

Donee, even though the services given are between you and the lawyer

Question 25

Must a beneficiary be identified at formation of the TPB contract?

Answer 25

No, he just has to be identifiable when performance is due.