Contract Remedies

Question 1

Compensatory Damages (Contracts)

Answer 1

The object of compensatory damages in contracts are to place the party in substantially as good a position as he would have been had the contract been performed.

Nominal and Punitive not allowed; based on injury to the plaintiff. Requires 1) Causation, 2) Foreseeability (at time of contracting), 3) Certainty, and 4) Unavoidability/Mitigation (focus on plaintiff)

Question 2

Consequential Damages (Contracts)

Answer 2

Available for related damages foreseeable at the time of contract (includes reputation damages)

Question 3

Nominal Damages (contracts)

Answer 3

Not relevant

Question 4

Punitive Damages (contracts)

Answer 4

Punitive damages are not recoverable in contracts claims

NOTE: Wilfull conduct may indicate a torts case where punitive damages are recoverable.

Question 5

Liquidated Damages (contracts)

Answer 5

Requires that: 1) Damages were very difficult to ascertain at contract formation and 2) clause was a reasonable forecast of what they would be. If amount is excessive then it will serve as a penalty.

If valid then only the liquidated amount is available. If invalid only actual compensatory damages are available.

A clause providing for either damages or liquidated damages is unenforceable.

Does not preclude plaintiff from getting specific performance unless contract specifically says liquidated damages is the only amount.

Question 6

Legal Remedies (Contracts)

Answer 6

Compensatory
Consequential
Liquidated Damages

Nominal & Punitive are normally not available.

Question 7

Restitutionary Remedies (contracts)

Answer 7

Quasi Contract
Restitutionary Damages
Replevin

Question 8

Quasi-Contract Restitutionary Damages

Answer 8

A contract imposed in equity where a contract should have been formed but was never realized. Courts apply quasi-contract when appropriate to create an obligation and avoid injustice or unjust enrichment.

Requires circumstances such that it would be inequitable for the defendant to retain the benefit without paying fair value for it.

Requires a showing of 1) P gave a benefit, 2) D had knowledge of the benefit, 3) D accepted and 4) circumstances are such that it would be inequitable for the defendant to retain the benefit without paying fair value for it.

The liability in a quasi-contract is equal to the value of the benefit conferred by the plaintiff. The value is the fair market value of the benefit and not necessarily the subjective value that the defendant enjoys.

Example: A roofing company fixes school roof AND with school’s knowledge does extra work outside of the original contract. The outside work will form a qausi-contract and a court will enforce resitution for labor.

Question 9

Restitution Damages (contracts)

Answer 9

Depends on contract being unenforceable or because of breach.

Unenforceable: Mistake, lack of capacity, statute of frauds, illegality, misrepresentation. Receive damages for property/money/services rendered to the defendant. This is true even if the value of the services is greater than the contract rate.

Breach of contract:
Traditionally only applies where the plaintiff is a non-breaching party. Modernly it is allowed.

Damages: A monetary award not greater than the contract rate and reduced by any damages suffered by the defendant resulting from the breach (if applicable).

NO COmpensatory and Restitutionary Damages together. Discuss both damages but award the higher amount of the two.

Question 10

Replevin

Answer 10

Plaintiff recovers possession of specific personal property. In contracts it is an action for the reposession of personal property whether wrongfully detained or taken by the defendant.

Plaintiff must establish: 1) right to possession, and 2) wrongful withholding by defendant.

To recover before trial must post bond but defendant can also defeat recover by posting re-delivery bond.

During time of detention P may be able to receive damages for lost use (compensatory) or benefit to defendant (restitution).

Question 11

Specific Performance:

Answer 11

A mandatory decree ordering a contracting party to perform a promise under a contract. Plaintiff must show:

1. An inadequate remedy at law
2. A valid contract with definite and certain terms to enforce
3. Satisfaction with the plaintiff’s contract conditions
4. Mutuality of performance
   (means specific performance) is available to either P or D could
5. Feasibility of Enforcement and
6. No defenses

You probably don’t need to establish the contract formation elements. But get in and get out of formation if its a remedies essay

Question 12

Contract Compensatory Damages Headings/Analysis

Answer 12

Expectancy
Reliance
Consequential
Liquidated Damages
Incidental
Duty to mitigate

Question 13

All Equitable Contract Remedies

Answer 13

1. Specific performance
2. Rescission
3. Reformation
4. Quasi Contract

Question 14

All Compensatory Damages (contracts)

Answer 14

1. Expectancy
2. Reliance
3. Consequential
4. Liquidated damages
5. Incidental
6. Duty to mitigate.

Always discuss expectancy, reliance, and consequential

Question 15

Buyer’s Right of Replevin under UCC

Answer 15

The UCC provides a buyer with a right of replevin for goods identified to the contract if, after reasonable effort the buyer is unable to effect cover for such goods, or the circumstances reasonably indicate that such effort will be unavailing.

Question 16

Unpaid seller’s right to reclaim goods

Answer 16

The UCC also protects a seller’s right to get back goods from buyer who has not paid for them.

Question 17

Specific Performance - Valid Contract

Answer 17

A valid, enforceable contract with definite and certain terms.

Question 18

Specific Performance - Inadequate Remedy at Law

Answer 18

A legal remedy is inadequate when money damages would be speculative, the harm is not yet ripe or in situations involving unique real or personal property.

Land is always considered unique.

Determined at time of trial - look for rare, personal significance.

Question 19

Specific Performance - Mutuality of Performance

Answer 19

Means that the remedy of specific performance would have been available to the defendant as well as the plaintiff.

Question 20

Specific Performance - Feasibility of performance

Answer 20

In order to decree specific performance of a contract, a court must enforce its decree and supervise it.

Question 21

Specific Performance - Contracts for Personal Services

Answer 21

Courts will not enforce contracts for personal services since it is equivalent to involuntary servitude under the 13th Amendment. However, courts can enforce a contract for someone not to work (a covenant not to compete).

Question 22

Legal defenses (Contracts)

Answer 22

All defenses to the formation of a contract:
Unclean Hands
Laches
Hardship
Mistake
Misrepresentation/Unfair Practices
Fraud
Statute of Frauds

Question 23

Laches (Contracts)

Answer 23

A plaintiff may be denied relief when they have caused an unreasonable delay in asserting their rights and the delay will prejudice the defendant.

Question 24

Unclean Hands

Answer 24

When the plaintiff has been guilty of some sort of misconduct in regards to the same transaction as to which they are presently suing the defendant.

Question 25

Hardship (Contracts Defenses)

Answer 25

Hardship can be asserted when there is a ver serious inequity between the parties, often in the form of 1) Inadequate consideration and 2) uneven bargaining power.

Question 26

Mistake (Contracts defenses)

Answer 26

A defendant will not be compelled to perform if his or her assent to the contract terms was obtained under the influence of mistake, misapprehension or surprise.

Question 27

Misrepresentation / Unfair Practices

Answer 27

A defendant will not be compelled to perform if his or her assent was obtained by misrepresentation or unfair practices of the party to whom performance was otherwise due, or by any promise of such party that has not been sufficiently fulfilled.

Question 28

Fraud

Answer 28

Fraud may serve as a defense to an action for specific performance even if it would not give rise to an independent cause of action for fraud.

Question 29

Specific Performance Elements

Answer 29

The defendant must perform the contract if five requirements are met absent any defenses:
1) Inadequate Legal Remedy at Law
2) A valid contract
3) Definite and Certain terms to enforce
4) Plaintiff’s condition is satisfied
5) Mutuality of performance
6) feasibility of enforcement

Question 30

Specific Performance - Any plaintiff’s conditions must be satisfied

Answer 30

The plaintiff must be able to show that his or her contract’s conditions have been fulfilled (satisfied or excused).

Question 31

Specific Performance Defenses

Answer 31

Equitable Remedies:
Unclean Hands
Laches
or Unconscionable - Must be more than an unfair deal at the time of contract

Legal Remedies:
Mistake
Misrepresentation
Statute of Frauds

Question 31

Specific Performance Defenses

Answer 31

Equitable Remedies:
Unclean Hands
Laches
or Unconscionable - Must be more than an unfair deal at the time of contract

Legal Remedies:
Mistake
Misrepresentation
Statute of Frauds

Question 32

Recession:

Answer 32

Original contract is considered voidable and rescinded.

Election of Remedies
1. Sue for damages first: Cannot get rescission since the suit for damages serves to affirm the contract
2. If the plaintiff sues for rescisision first, then damages are allowed (P can sue for both and choose before judgement)

Question 33

Rescission Analysis

Answer 33

1. Determine if there is grounds for rescission
   - Mistake, misrepresentation, undue influence, and other contract formation issues.

Mistake: Material fact then rescission is granted but not with mistake of a collateral fact.

Unilateral Mistake: Despite ordinary care enforcement is unconscionable and the other party can be returned to the status quo.

Fraud: Rescission is granted if P ACTUALLY relied on the misrepresentation or fraudulent facts.

Failure of Consideartion: It is the duty of the other party to see that their consideration doesn’t fail.

2. Determine if there are any defenses:
   - Tort defenses
   - Negligence (not a good defense to prevent recession)
   - Election of remedies
   - Plaintiff has some performance on the contract and thus restitution is more proper.

Question 34

Reformation Analysis:

Answer 34

Changes written agreement to conform with the parties original understanding.

1) IS there a valid contract (meeting of the minds)
2) Are there grounds for reformation?
- Mutual mistake - Granted
- unilateral mistake - Denied
- Fraud or non-mistaken party knows of mistake - Denied
- Misrepresentation- Granted
3) Are there valid defenses:
- Tort defenses

Non-defenses (won’t prevent reformation):
- Negligence of Plaintiff
- Statute of Frauds
- Parole Evidence Rule

“Very Good Dog”

Question 35

Land Sale Contract Requirements

Answer 35

1) Parties, 2) Property Defined, 3) time for performance, and 4) purchase price.

Question 36

Abatement of Purchase Price

Answer 36

In a land-sale contract, a purchase price can be abated, or reduced when tittle rendered is defective due to an encumbrance or unmarketable title, or a conveyance of less than promised.

Question 37

Expectancy Damages

Answer 37

Expectation damages put the plaintiff in the place s/he would have been had the K not been breached.

Question 38

Reliance

Answer 38

Reliance damages put the person in the place s/he would have been had the K not occurred. (What were the costs due to the reliance on the K).

Question 39

Restitution

Answer 39

Restitution damages compensate the plaintiff for how much the defendant benefitted from the K (The amount the breaching party gained is the measure of recovery).

Question 40

Incidental

Answer 40

Incidental damages are always recoverable. The costs incurred in finding replacement performance.