Chapter 19

Question 1

Types of damages

Answer 1

1. Compensatory (direct losses/costs)
2. Consequential - (indirect/foreseeable losses)
3. Punitive - to punish and deter wrongdoing
4. Nominal - to recognize wrongdoing when no monetary loss is shown

Question 2

Incidental damages

Answer 2

Expenses that are caused directly by a breach of contract

Question 3

Consequential damages

Answer 3

Special damages that compensate for a loss that is not direct or immediate (ex: lost profits)
- must have been reasonably forseeAble

Question 4

Nominal damages

Answer 4

A small monetary award (often one dollar) granted to a plaintiff when no actual damage was suffered or when the plaintiff is unable to show such loss with sufficient certainty

Question 5

Mitigation of damages

Answer 5

A rule requiring a plaintiff to have done whatever was reasonable to minimize the damages caused by the defendant

Question 6

Liquidated damages

Answer 6

An amount, stipulated in the contract, that the parties to a contract believe to be a reasonable estimation of the damages that will occur in the event of a breach

Question 7

Penalty

Answer 7

A sum inserted into a contract, not a measure of compensation for its breach but rather as a punishment for a default. The agreement as to the amount will not be enforced and recovery will be limited to actual damages

Question 8

Restitution

Answer 8

An equitable remedy under which a person is restored to his or her original position prior to loss or injury, or placed in the position he or she would have been in had the breach not occurred

Question 9

Specific performance

Answer 9

An equitable remedy requiring the breaching party to perform as promised under the contract; usually granted only when money damages would be an inadequate remedy and the subject matter of the contract is unique

Question 10

Reformation

Answer 10

An equitable remedy used when the parties have imperfectly expressed their agreement in writing
- allows a court to rewrite the contract to reflect the parties true intentions

Question 11

Requirements of a quasi contract

Answer 11

1. The party has conferred a benefit on the other party
2. The party conferred the benefit with the reasonable expectation of being paid
3. The party did not act as a volunteer in conferring the benefit
4. The party receiving the benefit would be unjustly enriched if allowed to retain the benefit without paying for it

Question 12

Waiver

Answer 12

An intentional knowing relinquishment of a legal right