damages

Question 1

What is the expectation interest?

Answer 1

The interest of giving the benefit of the bargain, putting someone in as good a position as they would have been in had the contract been performed.

Question 2

What is the reliance interest?

Answer 2

The interest of being reimbursed for loss caused by reliance on the contract by being put in as good a position as he would have been in had the contract not been made.

Question 3

What is the restitution interest?

Answer 3

the interest in having restored to the non-breacher, any benefit that they have conferred on to the other party.

Question 4

Expectation damages

Answer 4

The benefit of their bargain, meant to put the non-breaching party in as good of a position as they would have been in had the contract been performed

Question 5

Consequential damages

Answer 5

Indirect damages that the plaintiff suffers at the time of the breach, that were foreseeable at the time the K was entered, but weren’t part of the breach itself.

Question 6

incidental damages

Answer 6

little damages suffered to get a replacement deal

Question 7

Liquidated damages

Answer 7

the amount of damages are specified in the K

Question 8

When are liquidated damages enforceable?

Answer 8

when the amount is reasonable in light of the anticipated or actual harm caused by the difficulties of proving loss, and the inconvenience or non-feasibility of otherwise obtaining an adequate remedy.

term fixing unreasonably large liquidated damages is void as a penalty

Question 9

How are damages calculated?

Answer 9

(price of substitution) - (contract price)

if there has been no substitution, then market price at the time of breach is used.

Lost profits (lost volume sellers)

Question 10

What is a lost volume seller?

Answer 10

A seller whose supply is sufficiently large enough that, had there been no breach by the buyer, the seller could and would have had the benefit of both the original contract and the resale contract.

Question 11

Between the use of the substitute price and the market price, which will the court choose?

Answer 11

whichever value is lower

Question 12

What are the limitations of damages?

Answer 12

Damages must be certain and foreseeable, & the non-breaching party has a duty to mitigate their damages

Question 13

Certainty of damages

Answer 13

there must be some reasonable amount of certainty of damages, they can’t be speculative. Doesn’t need to be absolute

Question 14

Foreseeability of damages

Answer 14

damages must be reasonably foreseeable

□ Must naturally arise
□ Must be contemplated by the parties
□ Communicated to the other parties

Question 15

What are the exceptions for emotional damages in contract law?

Answer 15

Emotional damages are usually only recoverable when a breach of K is accompanied by a tort.

Question 16

What situations could allow for emotional damages in contract law?

Answer 16

• The breach caused bodily harm (C-section)
• The K makes emotional distress a particularly likely result (wrong body, promise to marry)
• Emotional concerns make up the essence of the K (care for the elderly or kids)

Question 17

When will a breach of K result in punitive damages?

Answer 17

typically not recoverable UNLESS the breach also constitutes to the committing of a tort
□ The type of tort must consist of willful, wanton, reckless, or malicious conduct
□ Some courts insist that the plaintiff and defendant must have had a special relationship

Bad faith denial of an insurance claim by an insurance company

Question 18

What types of damages are too speculative?

Answer 18

Loss of good will, threat to business reputation, future profits