Pg 3

Question 1

What is the name for contract damages?

Answer 1

Expectation damages

Question 2

What is the point of expectation damages?

Answer 2

To put the aggrieved party in the position that he would have been in if the contract had been performed. This gives him what he expected.

Question 3

Can you get emotional distress damages in a breach of contract case?

Answer 3

Only if the contract is of a personal nature that would elicit emotional concerns

Question 4

What is the doctrine of avoidable consequences?

Answer 4

This requires the nonbreaching party to take reasonable steps to avoid the losses that are caused by the breach

Question 5

What is an anticipatory breach?

Answer 5

This occurs when a party clearly and unequivocally communicates or manifests that he will not perform his duties under the contract.

Question 6

If there has been an anticipatory breach, how can the other party respond?

Answer 6

• he can either treat the repudiation as a breach, or

– he can ignore it and demand performance until the date that the original performance was due

Question 7

If you have a situation where there was a breach of contract, how do you approach this on an essay with regard to expectation damages?

Answer 7

• look for a liquidated damages clause: see if there is one present, and if it is enforceable. If there is, then it controls. If not or it is not enforceable…
  – expectation damages: the expectancy interest tries to put the plaintiff in the position he would’ve been if the contract was performed. This is the standard measure plus consequential damages. Or in the alternative…
  – reliance damages: the plaintiff can get either expectation or reliance, not both. This is anything that the plaintiff expended in reliance on the contract

Question 8

When are reliance damages often given?

Answer 8

If a plaintiff cannot prove expectancy damages with reasonable certainty or there are no expectancy damages [perhaps the contract was a losing contract for the plaintiff].

Question 9

How do employment contracts work with regard to damages?

Answer 9

The standard measure plus consequential damages. This gives a monetary substitute for the promised but undelivered performance.

Question 10

If there is no fixed term for employment, how long does the employment relationship last?

Answer 10

It is terminable at the will of either party

Question 11

What is the standard measure if an employer breaches?

Answer 11

The employee is given lost wages subject to a duty to mitigate. This includes all fringe benefits like promised bonuses, vacation pay, pension contributions, etc.

Question 12

What happens if an employer breaches his contract with regard to mitigation?

Answer 12

– if employee mitigates: he gets the difference between his lost wages and his new salary
– if he doesn’t mitigate: he gets the difference between his lost wages and what the court decides he could have gotten through reasonable mitigation

Question 13

What is the duty to mitigate with regard to an employer breaching contract?

Answer 13

The employee must make reasonable efforts to find similar work in the same area. But he doesn’t have to relocate

Question 14

If an employee could be employed at numerous places (Ie: he’s a surgeon and one hospital he works at doesn’t renew his staff privileges, but he has privileges at five other hospitals), how does the duty to mitigate work?

Answer 14

This is like a lost volume seller. He is not required to offset his income if he can show that he would’ve been able to perform those other surgeries even if he had privileges at the offending hospital.

Question 15

What happens when there has been an improper termination of a tenured or indefinite employment contract by the employer?

Answer 15

Project the anticipated level of compensation for similarly situated employment for each year until the plaintiff would have retired, then project the anticipated earnings based on the plaintiff’s good faith attempt to get new employment, subtract the anticipated earnings, reduce the difference for each year to it’s worth as of the date of filing, and take the sum.

Question 16

Why is reinstatement not usually given in employment breach situations?

Answer 16

Because personal relationships are hard. The factors the court will consider are:

• frequency of openings
• whether the plaintiff will be employed during the waiting period
• whether the reinstatement would create friction with other employees
• whether circumstances have changed to make reinstatement inequitable to the employer

Question 17

What is the standard measure for breach of an employment contract by the employee?

Answer 17

The employer gets the extra cost to hire a replacement, including: any cost associated such as advertising, training, etc.

Question 18

What is the point of remedies for construction contracts?

Answer 18

These are meant to put the non-breaching party in the position he would’ve been in had the breach not happened

Question 19

What is the standard measure for when a contractor breaches a construction contract?

Answer 19

• diminution in the market price of the property caused by the breach, OR
  – reasonable cost of completing performance or remedying defects if the cost isn’t clearly disproportionate to the probable loss in value

Question 20

When you’re trying to figure out what the remedy would be for a breach of a construction contract by the contractor, what do you have to consider?

Answer 20

Whether the breach was uncompleted work or work that was improperly done

Question 21

What is involved in the Reading pipe case with regard to a contractor breaching a contract?

Answer 21

In that case it would’ve been economically wasteful to tear down the house just to put in a different type of pipe, so the remedy was diminution in market value of the property instead of the reasonable cost to complete performance or remedy the defects.

Question 22

If you had a certain type of siding installed on your house, but it was done wrong and one part of the siding was darker than the other, what would be the remedy?

Answer 22

The court will likely give you the cost to replace the siding because the purpose of the contract was to have a beautiful exterior with a specific look

Question 23

What is the difference between the remedy if a contractor breaches a contract but he substantially performed or there was incomplete performance?

Answer 23

– substantial performance: he can get the contract price minus the amount that the owner needs to cure the gap between his substantial performance and full performance.
- incomplete performance: the remedy is the additional cost to the owner to complete the performance

Question 24

If a contractor intentionally breaches a contract, even if he substantially performed, as long as the breach was without any justification, what happens?

Answer 24

All recovery by the contractor is barred

Question 25

When is the timing for determining remedy with regard to a contractor breaching a contract?

Answer 25

The date of the breach.

Question 26

If there was incomplete performance by a contractor to a construction contract, what are other things that the owner can also recover?

Answer 26

• lost rental value if the breach prevented the owner from renting the place out
  – lost profits if the owner intended to sell

Question 27

Is it possible to get specific performance as a remedy for a contractor’s breach?

Answer 27

Sometimes the court will order this but it is rare because courts do not like to retain oversight

Question 28

If there was a contract to build a house for $100,000, but the contractor walked off the job halfway, what would the owner get as a remedy?

Answer 28

The cost to get a new builder to finish the job.