Damages Flashcards
(13 cards)
How is restitution calculated?
Restitution is calculated as the amount of benefit a breaching party conferred on a non-breaching party.
Most courts hold that a breaching party cannot recover restitution if their breach was willful.
What is the economic waste rule and how is economic waste calculated?
In the case of substantial performance, if the cost to repair a minor breach is significantly disproportionate to the diminished utility or value caused by the breach, a court will find that damages create economic waste.
If damages create economic waste, the court will grant damages equal to the decrease in fair market value caused by the breach, instead of granting damages in the amount it would cost to repair the breach.
What is the goal of expectation damages?
Expectation damages aim to put a non-breaching party in the same economic position they would be in if the breach had never occurred.
As a result, expectation damages typically equal the amount it would cost to repair the breach.
How do you calculate expectation damages?
Expectation damages are typically the amount it would take to repair a breach.
They are calculated as the difference in value between the actual performance and the expected performance.
What is partial performance? How are damages calculated when there is partial performance?
Partial performance is when breach occurs prior to complete performance. Partial performance entails partial breach (rather than full breach) and impacts the amount of expectation damages recoverable.
??: Expectation damages - value of unperformed work.
What are compensatory damages and how are they calculated?
The goal of compensatory damages is to financially compensate the non-breaching party for economic loss resulting from a breach.
Compensatory damages include expectation damages, consequential damages, and incidental damages.
To calculate compensatory damages, you add expectation damages, plus consequential and incidental damages. Then you subtract any damages that the non-breaching party failed to mitigate.
What are the different types of damages that parties generally may recover in a contract dispute?
compensatory damages
reliance damages
liquidated damages
restitution
Parties will rarely recover punitive damages in contract cases.
What is the general measurement of expectation damages in construction contracts?
The difference between the expected cost (contract price) and the actual cost (cost for construction by someone else) plus any partial payments already made to the breaching contractor, plus compensation for delay.
What are consequential damages?
These are damages that are the reasonably foreseeable consequences of a breach based on the non-breaching party’s specific/unique circumstances. They must be able to be calculated with reasonable certainty.
An example is reasonably foreseeable and reasonably certain lost profits.
What is the duty to mitigate?
A nonbreaching party has a duty to prevent further loss following a breach. This duty does not require the nonbreaching party to undertake significant risk, expense, or inconvenience.
The duty to mitigate can involve finding substitute performance, but a nonbreaching party does not have to accept inadequate substitute performance.
The cost of a nonbreaching party’s failure to mitigate reduces the damages they are permitted to recovery (the breaching party cannot sue for failure to mitigate).
*not a duty?
What are incidental damages?
These are damages that are the cost of reasonable commercial expenses that result from a party’s breach.
Examples include storage costs, costs related to reselling or returning the goods (i.e. shipping), cost to inspect the goods etc.
What are liquidated damages?
These are damages for breach, agreed upon by both parties at the time of contracting.
Such damages are typically used
When will a court not enforce an award of liquidated damages?
When the agreed upon amount is significantly disproportionate to the actual damages suffered, such that they act as a penalty.
