contracts II - damages Flashcards
(47 cards)
Remedies for Breach
1 Specific performance
2 Substantial Relief
Specific Performance
- Court orders completion of the promise
- helps avoid comparing and determining value
- easy if seller in possession and delivery is possible
substantial relief
money damages in place of promise
Purpose of Remedies
to protect expectation interests, reliance interests and restitution interests
expectation interests
interest in having the benefit of the bargain by putting non-breaching party in as good a position as they would have been in had the contract been performed
** where the plaintiff would be if defendant performed
reliance interests
interest in being reimbursed fro loss caused by reliance on the contract by putting the non-breaching party in as good a position as they would have been had the contract not been made
** where the plaintiff would be if promise never made
restitution interest
interest in restoring to the non-breaching party any benefit they conferred on the breaching party
- returning benefit plaintiff delivered to defendant
- injured party bares burden of proving breach
- injured party must prove loss
- injured party can’t recover loss if they could have avoided loss
when is restitution interest appropriate
non-contract remedy, used when the contract fails and is not enforceable, could be an illusory promise or other defect
measure of expectation damages (formula)
loss in value from other party’s performance caused by its failure or deficiency, any loss including incidental or consequential loss caused by breach, cost or other loss he avoided
DAS = VP - VR - CA + IC = value promise - value delivered - costs avoided + incidental costs
DAS + VP - C - CA + IC = value promise - cover - costs avoided + incidental costs
measure of reliance damages (formula)
damages based on reliance on contract including expenditures made in preparation of performance less any loss that the party in breach can prove injured party would have suffered if contract performed
DAS = VP - VD - E + CA = value promise - value delivered - expenses + costs avoided
when is specific performance granted
1 money damages are inadequate 2 proof of loss is impractical (hard to calculate) 3 not possible to get valid substitute 4 item is objectively unique 5 real estate transactions
injunctive relief
- court orders a party to perform contract
* used when it cleaner, there’s minimal court supervision, and it doesn’t force anyone to act
negative injunction
when the court orders a party not to do something
objectively unique
item is special to everyone, unique because people will pay a lot for it
subjectively unique
- item is unique or special to one person
* can also be unique when used by a specific person such as an animal trainer
tortuous interference
party knows of the existence of a contract and intentionally interferes with the contract
factors affecting adequacy of damages
1 difficulty of proving damages
2 difficulty of procuring suitable substitute with money award
3 likelihood that award of damages will not be collected
specific performance not granted if
1 contract induced y mistake or unfair practices
2 relief would cause unreasonable hardship
3 exchange is grossly inadequate or terms of the contract are unfair
4 if it is against public policy
5 it imposes enforcement and supervision burden on court
6 court has to force party to perform against their will
efficient breach
when a party intentionally breaches because they will make more money even if they are liable for the contract
in some cases both parties benefit from the breach
negative injunction
when a court orders a party not to do something
non-compete agreements
party agrees not to compete with other party, usually employee employer relationship but can be from buyout or business merger
proof of loss
injured party bears burden of proving loss caused by breach, that it was unavoidable, and value of loss
measure of damages for non-delivery or repudiation by seller (formula)
difference between value when buyer learns of beach and contract price plus incidental and consequential damages minus cost avoided
DAS = MV - CV + ID - CA = market value - contract value + incidental damages - costs avoided
anticipatory repudiation
when a party notifies the other party in advance that they intend to breach the contract