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Contracts and Advanced Sales > Remedies > Flashcards

Remedies Flashcards

1
Q

What is anticipatory repudiation?

A

A party to the K clearly and unequivocally states that they will not perform on the K before performance is due.

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2
Q

What can the non breaching party do when the breaching party repudiates?

A
  1. treat the repudiation as a breach and sue immediately for damages. BUT, if the non breaching party already fully performed and simply waiting on payment, they cannot sue early.
  2. ignore the repudiation, demand performance, and see what happens
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3
Q

Can a party retract its repudiation?

A

Yes, provided the other party has not commenced a lawsuit or acted in reliance on the repudiation (by materially changing its position).

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4
Q

UCC Anticipatory Repudiation

A

When there are reasonable grounds for insecurity about the other side’s performance, you can demand adequate assurance. If the other party fails to respond within a reasonably time, treat this as a repudiation.

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5
Q

Money Damages

What is the goal of expectation damages and how are they measured?

A

the goal is to put a party in the same economic position it would be in if the contract has been performed as promised

they are measured by comparing the value of the performance w/o the breach to the value w/ the breach

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6
Q

Expectations damages

Mickey contracts with Pabst to buy a keg of beer for $100. Mickey repudiates the contract, and Pabst sells the keg to a liquor store for $80. What are Pabst’s expectation damages?

A

$20

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7
Q

Expectations damages

Same facts but no one else wants to buy this beer and Pabst cannot resell the keg at any price. What are Pabst’s expectation damages?

A

$100

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8
Q

Mickey contracts with Pabst to buy a keg of beer for $100. Mickey gets the keg but breaches the contract by refusing to pay. The current price for a keg of Pabst has risen to $110. What are Pabst’s expectation damages?

A

$100

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9
Q

Mickey contracts with Pabst to buy a keg of beer for $100. Pabst fails to deliver the keg, and Mickey has to buy her keg from Blatz for $120. What are Mickey’s expectation damages?

When Pabst refuses to deliver, can Mickey buy a keg of Utopia Beer for $25,000 and sue Pabst for $24,900?

A
  1. $20
  2. No, cover must be similar
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10
Q

Mickey contracts with Pabst to buy a keg of beer for $100 (paid up front). When Pabst delivers the keg, it is only half-full but Mickey is desperate to have her beer and keeps the half keg. It can be shown that a half keg of Pabst costs $60 at the corner liquor store. What are Mickey’s expectation damages?

Can Mickey send the keg back instead?

A
  1. $60
  2. Yes
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11
Q

Limitations on Expectation Damages

Must be proven with…

A

reasonable certaintly

Common fact patterns involve brand new or unproven business ventures which have difficulty proving what their lost profits would be.

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12
Q

Limitations on Expectation Damages

Are unforceable consequential damages recoverable?

A

Not recoverable unless the breaching party had some reason to know about these damages.

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13
Q

Limitations on Expectation Damages

Differentiate the two categories of damages

A

General damages – damages are the types of losses almost anyone
would suffer if there was a breach. Includes incidental damages , such as the cost of storing rejected goods, finding a new buyer, or finding a replacement vendor.

Consequential Damages – losses that are unique or special to this plaintiff.

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14
Q

Limitations on Expectation Damages

Consequential damages can be limited or excluded entirely unless this would be…

A

unconscionable

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15
Q

Limitations on Expectation Damages

What limitation on consequential damages is prima facie unconscionable? What isn’t?

A

Limitation of consequential damages for injury to the person in the case of consumer goods is prima facie unconscionable but limitation of damages where the loss is commercial is not.

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16
Q

What is the mitigation principle?

A

Must take reasonable steps to mitigate damages. the law will calculate damages as if the party did mitigate.

D bears burden of proving mitigation failure. Mitigation efforts must be reasonable similar to the OG K.

17
Q

What is a loss volume profits problem (LVP)?

A

Usually, when a paying party breaches, the seller needs to mitigate by reselling the foods or services to another person

With retailers that sell this type of product all the time, the seller may argue for LVP. This is where they sue for the profit that they would have made on the sale.

18
Q

LVP

Outrigger contracts to sell Mickey a speedboat for $15,000 which
costs Outrigger $10,000 to buy from the manufacturer. The following week Mickey repudiates the sale. The very next day, Will Ferrell walks in to buy the same boat for $15,000. Mickey argues that Outrigger’s damages are zero because it fully mitigated her breach with the sale to Ferrell. Is she right?

If Outrigger does get LVP, how should these be calculated?

A
  1. No, as long as Outrigger can show it had lots of boats and not many
    buyers
  2. 5,000
19
Q

. Other Remedies

What are liquidated damages and when are they available?

A
  1. State in the K as an explicitly negotiated amount due upon breach.
  2. OK as long as the amount is not a penalty because it is unreasonably large
20
Q

. Other Remedies

A buyer may request specific performance if…

A

the goods are unique, or in other proper circumstances like money damages being inadequate for some reason

21
Q

. Other Remedies

What is replevin?

A

remedy where the buyer can recover specifically identified goods
when she cannot cover a breach by the seller after making reasonably efforts

22
Q

Other remedies

Mickey contracts for 500 pints of Fireball whiskey for $5,000. The
whiskey is specifically identified from a special month of production. Fireball breaches and Mickey cannot locate similar whiskey elsewhere. Can Mickey get her whiskey?

A

Yes, replevin

23
Q

Other remedies

A buyer can also assert replevin where partial payment has been made and the seller goes insolvent within ________________ of the payment

A

10 days

24
Q

Other remedies

What is the right of reclamation and when is it available?

A

An equitable remedy that arises when an unpaid seller tried to reclaim goods that were sold on credit when the buyer is insolvent

to assert:
1. the buyer is insolvent as the time of receipt of the goods
2. the seller must demand the return of the goods within 10 days of receipt (or within a reasonable time if the buyer misrepresented his solvency to the seller in writing within three months before delivery); and
3. the buyer still has the goods

25
Q

Other Remedies

Goods in transit—

A

The seller may stop goods that are in transit if it learns that the buyer is
insolvent or if the buyer fails to make a payment that is due. The goods may not be stopped once the buyer (or its bailee) receives the goods

Contracts and Advanced Sales (9 decks)

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