Expectation Damages - Mar. 27 Flashcards
What is a remedy? (DeLong)
A “remedy” is any right, privilege, or power that a party has (1) to be made whole because an obligor breached a duty owed to that party, or (2) to avoid the legal effect of a transaction on other equitable grounds. (399)
What are self-help remedies? (DeLong)
Self-help remedies include rejection of non-conforming goods, cancellation of a contract upon material breach, repossession of collateral upon default on a loan, retaining a deposit upon the buyer’s default, and withholding payment upon the other party’s breach. (399)
What are monetary remedies? (DeLong)
Monetary remedies are judgments for money damages. (399)
What are non-monetary remedies? (DeLong)
Non-monetary remedies are everything else, including equitable remedies (injunctions, orders for specific performance, or declaratory relief). (399)
What is the rightful position of a plaintiff? (DeLong)
The rightful position of a plaintiff – the rights-holder – is the position he would have enjoyed if the defendant – the duty holder – had not breached her duty. (399)
What is the non-breaching party’s rightful position in breach of contract cases? (DeLong)
In breach of contract cases, the non-breaching party’s rightful position is the financial situation that he would have enjoyed if the defendant had not breached her duty. This is known as the “expectation interest” or “expectation measure” of damages because it seeks to replicate what the non-breaching party reasonably expected as the result of the contract. (399)
What are three fundamental principles of contract remedies? (DeLong)
(1) Restoring the plaintiff to his rightful position.
(2) The remedy be supplied at the least cost to the defendant.
(3) Courts will generally enforce the parties’ specific agreement to fix or limit remedies unless to do so would violate public policy. (399-400)
Are contract remedies intended to punish the breaching party, even if the breach was intentional? (DeLong)
No. (400)
What is the goal of breach of contract remedy? (DeLong)
The remedial goal is compensation rather than punishment. (400)
Are punitive damages awarded for breach of contract? (DeLong)
No. Punitive damages are not awarded for breach of contract. (400)
What injury must a breach of contract cause to justify remedy? (DeLong)
The breach must cause economic loss (injury). (400)
Ex: The plaintiff may end up buying something from someone else at a higher price than he would have paid for it under the breached contract. Or the breach may disable the plaintiff from making a profit in a transaction with a third party.
What is the first question you should ask when calculating expectation damages? (Chinen)
What would the non-breaching party have received if the other party had performed the contract? Then calculate the amount it would take to put the non-breaching party in the place they would have been in had the other party performed. (Wiki on Calculating Expectation Damages)
What is the second question you should ask when calculating expectation damages? (Chinen)
Does that amount put the non-breaching party in a better place they would have been in had there been performance? If so, something needs to be subtracted because the non-breaching party would be overcompensated for the breach. (Wiki on Calculating Expectation Damages)
What are expectation damages? (Q)
Compensatory damages in a contract action, which place the injured party in the same position he would have been in had he received the full benefit for which he contracted.
