Finals Deck Flashcards
(21 cards)
Restat 2d of Contracts, § 347: Measure of Expectation Damages
Subject to the limitations stated in §§ 350-53, the injured party has a right to expect. damages, measured by:
(a) the loss in the value to him of the other party’s performance caused by its failure or deficiency, +
(b) any other loss, including incidental or consequential loss, caused by the breach, -
(c) any cost or other loss that he has avoided by not having to perform
Restat 2d of Contracts, § 349: Reliance damages
the injured party has a right to damages based on his reliance interest, including (1) expenditures made in preparation for performance or in performance, (-) any loss that the party in breach can prove with reasonable certainty the injured party would have suffered had the contract been performed
The Hadley Rule: Restat 2d of Contracts, § 351
Damages NOT recoverable for loss when the breaching party:
(1) had no reason to foresee DMGS as a PROBABLE result of breach @ time of contract
(2) foreseeable when (a) in ordinary course of events or (b) as a result of special circumstances beyond ordinary course of events + breacher had reason to know
(3) where F’lty proven, court may still limit damages by excluding Lost Profits if justice requires
Restitutionary damages:
Restat 2d of Contracts, § 355: Punitive Damages
Rule: Punitive damages are not recoverable for a breach of contract UNLESS (1) the conduct constituting the breach is also a tort for which punitive damages are recoverable
[compensation not punishment] OR
(2) a bad faith breach of an insurance contract
Restat 2d of Contracts, § 353: Loss Due to Emotional Disturbance
Rule: Recovery for emotional disturbance will be excluded UNLESS the breach also caused (1) bodily harm or (2) the contract or the breach is of such a kind that serious emotional disturbance was a particularly likely result
Lost Future Profits/New Business
Requires use of an expert witness; under expectation damages-consequential damages-lost future profits
Bausch and L v. Bressler 977 F.2d 720
describes the unavailability of expectation damages and reliance damages, but provides for restitutionary recovery + the calculus of it
Rules for Attorney’s Fees
American: attorney fees usually barred UNLESS punitive award by court
English: Attorney’s fees allowed
OCGA 9-15-14 attorney fees assessed for frivolous actions and defenses OR
13-6-11 not allowed UNLESS plaintiff specially pled, the DEF acted in bad faith, DEF was stubbornly litigious, or caused PL unnecessary trouble and expense - goes to a JURY
Modifying a Third-party Beneficiary Contract
The parties may withdraw a benefit at any time before the rights of the beneficiary are vested:
Vested IF (1) by a term in the contract
(2) the beneficiary sues (3) the beneficiary directly relied on the benefit or (4) either party to the contract asks for the 3P beneficiary’s assent
Rule for intended beneficiary:
they can only be acknowledged or created at the time of contract; otherwise, they are an incidental beneficiary
Donee-like beneficiary:
do not acquire rights against the promise (giving of a gift)
Creditor-like beneficiary:
the promisor is already under obligation to pay money to the promisee (intended beneficiary will be entitled to sue the promisor or promisee but can only recover from one)
Primary difference between third-party beneficiary contract and an Assignment Contract:
3PB - 1 contract; Assignment - 2
What is the correct order of references courts will generally use in interpreting a term or phrase in a contract?
- Express terms
- Course of Performance (under the contract)
- Course of Dealing (past behavior between the parties)
- Usage of Trade/ Custom
General Damages under the CL:
contract price - Fair Market Value @ time of breach
What are special damages and what are the elements that a breach victim must satisfy to win them?
Lost profits, consequential damages
1. causation - by the breach
2. reasonably foreseeable by breached at time of contract
3. outcome was reasonable certain
4. victim attempted to mitigate damages
Rule for Specific Performance:
Courts will generally not grant specific performance UNLESS the victim is able to prove that no equitable remedy will justly compensate them; not available for personal service contracts - a victim may instead seek a prohibitory injunction from the court
Owner of pest control business contracts with a national pest control co. to sell his company for $4 million. PRIOR to signing, owner expressed concern about being fired. Rep of company orally assured him that he would include a provision that said “if owner is terminated in the first two years, Co will pay $400k.” The rep said they would speak to lawyers. Lawyers did not include provision in the contract, and Owner’s lawyer did not object before they signed. Contract is 220 pages and includes a merger clause that makes clear the writing is the final agreement. Co fired owner after 7 months.
Will the owner be able to introduce evidence of the additional $400k that the rep agreed Co would pay if owner was terminated?
No, the PER prevents the introduction of this testimony of the oral agreement.
This case did not raise any facts to satisfy the exceptions, so, PER barred inclusion of the side agreement.
