Contract Law

Question 1

Subcontractor’s Bid

Answer 1

A subcontractor’s bid is merely considered an outstanding offer. This means that a general contractor does not accept a subcontractor’s bid by incorporating it into the overall bid and is not bound to accept the subcontractor’s bid upon being awarded the general contract.

Question 2

Compensatory Damages

Answer 2

Damages meant to compensate the non-breaching for actual economic losses

Question 3

Expectation Damages

Answer 3

Expectation damages are intended to put the non-breaching party in the same position as if the contract had been performed. They must be calculated with reasonably certainty.

Question 4

Construction Contract Damamges

Answer 4

The general measure of damages for a contractor’s failure to begin or complete a building project is the difference between the contract price and the cost of construction by another builder, plus any progress payments made to the breaching builder and compensation for the delay in completing the construction.

Question 5

Consequential Damages

Answer 5

Damages that are a direct result of the breach but need not be the usual result of the breaching party’s conduct. Consequential damages need only be a reasonably foreseeable result of the breach given the parties’ specific circumstances. The breaching party must have reasonably foreseen the consequential damages for them to be recoverable.

Question 6

Foreseeability (Damages)

Answer 6

Damages are foreseeable if they were a natural and probable consequence of breach, if they were “in contemplation of the parties at the time the contract was made,” or if they were otherwise foreseeable.