Chapter 12 Flashcards
(22 cards)
Recission
Cancellation of contract with aim to return parties to original positions
Damages
Award money intended to cure a wrongful event
Reasons plaintiff is awarded monetary value instead of actual promised thing
- jurisdiction: courts of law do not have authority to compel defendant to do anything besides pay money
- money matters: business transactions are done through money
- expectation substitute: money can be used to purchase another of the expected object
- convenience: it would be inconvenient to award something other than money
Expectation damages
Monetary value of the benefit that the plaintiff expected to achieve under the contract
Damages are forward looking: where would plaintiff be if defendant had performed
Calculation of expectation damages
=expected benefits under contract-cost under contract
A loss will=$0 expectation damages
Cost of cure
Price it would cost another party to complete the work in question
Cost of loss of value
Damages awarded based on the loss in an agreement
Alternative performance
Contract allows defendant to perform in a variety of ways
Intangible loss
A loss that does not have any apparent economic value
-anger, disappointment etc.
Peace of mind
Recognized by the Supreme Court , relief may be available if contract was performed in a way that disappointment plaintiff’s expectations and caused distress
Remote (loss)
Unfair to hold defendant legally responsible
Test for remoteness
Subjective test:
-maybe impose liability if defendant knew plaintiff would suffer loss due to breach of contract
Objective test:
-liability imposed if a reasonable person would have recognized potential loss
Mitigation of damages
Plaintiff takes steps to minimize loss flowing form defendants breach
Duty to mitigate
It’s bad business not to mitigate
Cost of mitigation
Plaintiff can recover costs of mitigation it persued to avoid loss+actual loss
Reliance damages
Monetary value of the expenses and opportunities that the plaintiff wasted under a contract
Accounts of profits
Focus on defendant’s gain (plaintiff is entitled to defendants gains from breach of contract)
Nominal damages
Small damages to recognize that a wrong was committed but there was no gain for defendant/loss for plaintiff
Liquidated damages
A clause in contract that attempts to estimate value of a potential loss that occurs as a result of breach
Penalty
Negative incentive to get a party to perform
Unjust enrichment
Has three requirements to prove existence:
1) enrichment to defendant
2) corresponding deprivation to plaintiff
3) absence of any juristic reason for defendants enrichment
Remedy for unjust enrichment
Always restitution
-contract trumps unjust enrichment because it provides a reason for the enrichment