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Flashcards in Page 50 Deck (15):
1

What are two possible problems with agreed liquidated damages?

- shotgun clause: liquidated damages as a penalty
- have your cake and eat it clause: on breach you can sue for extra actual damages
----- neither of these are allowed

2

What are alternative damages?

When a clause in a contract says to either perform or pay. Ie: Golden parachute, severance pay

3

What are consequential damages?

Other losses that come from the breach as a proximate result that are reasonably foreseeable (UCC doesn't allow these)

4

What are reliance damages?

Plaintiff is repaid for all costs incurred in performing his obligations in reasonable reliance on the contract (losses from relying on the breaching party's acts or statements). Tries to put plaintiff in position he was in before contract was made

5

What are restitutionary damages?

Given When a party has conferred a benefit on another and the other isn't contractually liable for the benefit. Based on the reasonable value of the benefit conferred. Ie: party confers benefit in contract that ends up being unenforceable because of SOF, there is no contract but a benefit was conferred in pre-contractual stage

6

What are expectation damages?

Actual measure of damages/compensation of money. Difference between market price and contract price. Meant to put person in same position he was in before contracting. Limited to the reasonably foreseeable damages

7

What are primary rights?

Plaintiff's rights to defendant's performance

8

If there is a total breach by the defendant, the primary rates are discharged, and the law gives the plaintiff what instead?

Secondary rights called remedies

9

If you enter a construction contract where defendant will build an addition for $10,000 and you give him $5000 down, but he does nothing, so you have to have someone else do it, what are your damages?

The extra cost to complete the job if proven with a high degree of certainty and limited by foreseeability

10

What is the formula for expectation damages?

Lost value + incidental + consequential - cost avoided - loss avoided
----- essentially it is contract price minus the cost saved

11

If Performance is incomplete when breach happens, what is the measurement of the loss in value?

The cost to complete

12

If a defect affect the structural integrity of the building, or involves safety of the occupants, what happens?

Even though the cost will be huge, the cost to correct is recoverable

13

Consequential damages can be recovered only if what elements are met?

- at the time the contract was made, the defendant had reason to foresee the damages as a probable result of breach

14

If you contract with a commercial laundry to send a boiler in 10 days and you breach, what happens?

If you knew or should have known of the circumstances and the laundry's inability to get a substitute, The loss of profit from the breach is reasonably foreseeable, and they can get their lost profits as consequential damages. You didn't know and shouldn't have known you were liable only for general damages

15

General damages?

Difference between the contract price in the market price