Compensatory Damages Flashcards
(43 cards)
AKA?
general damages
What do general damages do?
Compensate the plaintif or hamr suffered
Expectancy
value of plaintiff’s entitlement under contract
Reliance
out of pocket cost
Restitution
expenditures that benefit the defendant
General rule (torts)
restore to position would be but-for the harm.
Nonconforming goods
entitled to difference of market – goods received – expenses + incidentals + consequential?
- General rule (torts)
restore to position would be but-for the harm.
- Chatlos
(Good example of extreme result/contract case)
o The goods are delivered and accepted, but are not as warranted. Plaintiff can recover the difference between the value of the goods as delivered and the value of the goods if they had been as warranted, §2-714(2), plus any incidental or consequential damages under S2-715.
- Smith (tort case)
o Out-of-Pocket rule (federal courts follow): damages are calculated as the difference between the actual—fraud-tainted—transaction price and the true value of the security measured on the date of the transaction.
Starting rule?
non-breaching party restored to rightful position.
What are consequential damages?
lost profits. Losses resulting from naturally & proximately (Buck v. Morrow) from breach and, contemplated by parties (Hadley v. Baxendale).
Basic contract…get what?
– general & consequential, unless exception (but if you have intentional tort you can get consquentials - Texaco)
Consequential damages
losses resulting naturally and proximately from the breach (Buck v. Morrow) & contemplated by the parties (Hadley v. Baxendale)
exception to consequentials from Meinrath
($ due not paid) Interest (period of time b/w breach & judgment)
For payment withheld although due (repayment) interest
Exception to Exception
allows damages where sufficiently foreseeable (foreseeable evidence?)
- loan commitments
- cases awarding actual interest paid
- bank refusal to pay deposited funds
- Bad faith claims (all the time)
- CRE v. Comcast
Restatement Second Majority Test: Damages for breach by either party may be liquidated in the agreement but only at an amount that is reasonable in the light of the anticipated or actual loss caused by the breach and the difficulties of proof of loss. A term fixing unreasonably large liquidated damages is unenforceable on grounds of public policy as a penalty.
o UCC (adds a factor – inability to find adequate remedy) The USS is only for the sale of goods.
Damages for breach by either party may be liquidated in the agreement but only at an amount which is reasonable in the light of the anticipated or actual harm caused by the breach, the difficulties of proof of loss and the inconvenience or nonfeasibility of otherwise obtaining an adequate remedy. A term fixing unreasonably large liquidated damages is void as a penalty.
- SJ Groves & Sons Co. v. Warner –
o Avoidable consequences doctrine (general principal) – if buyer acting in good faith and in reasonable manner plaintiff has a duty to mitigate damages
Immaterial is that the choice was not the cheapest, instead the question is whether the plaintiff acted in good faith and in a reasonable manner.
Breaching party bears the risk of uncertainty.
failure to make deliveries of concrete
- Oden
o Collateral source rule – under traditional common law principles, a personal injury award may not be reduced or offset by the amount of any compensation that the injured person may receive from a source other than the tortfeasor.
Now, depends on the details of each state’s statute .
* Modified by statute in most jurisdictions and they vary.
o Some states say subrogation is something considered.
o Some jurisdictions have the “make whole” rule – if plaintiff is not made whole, neither will subrogation right 3rd party (usually insurance).
Scope of Liability & Requirement of Reasonable Certainty (81-96) (101-109)
- Pruitt
Kepone case.(Common law in tort) Economic loss rule doctrine – if no physical damage to person or property cannot recover. This case modified the common law rule.
o Some sort of injury to person or property.
Exceptions: Wildlife, especially seafood, may be of enormous economic importance, yet nobody owns it until it is harvested.
* Constructive property interest (ex. Fisherman have interest in fish)
* Statutory remedies (oil spill act) (ex. Cut off liability at water’s edge)
- Sunnyland Farms (significant impact on limiting damages
o Takeaway – possibility of seeking recovery in tort (building) and in contract (loss of crop).
o In contract consequential damages must be objectively foreseeable.
Objective test: a defendant is liable for losses that were foreseeable at the time of contracting, regardless of whether the defendant actually contemplated or foresaw the loss. (Restatement Second).
* The loss must have been foreseeable as the probable result of a breach, not merely as a possibility.
Must be special circumstances that they would have specifically foreseen this harm.
- Bigelow
plaintiff must prove damages with as must certainty as reasonably possible. Wrongdoers bear the risk of uncertainty.
o The going concern method: (value before wrong and then after).
o The lost profits method: (comparison before and after).
o Experts must offer more than speculation – limited by reasonable certainty.
How to limit economic damages
-Defendant owed no duty limitation
-eggshell skulls
-directness test
Liquidated Damages Majority rule (Restatement Second)
liquidated damages clause is enforceable if the amount is reasonable either in light of the damages actually suffered or in light of the damages anticipated at the time of contracting.
