Remedies Flashcards
(8 cards)
Expectation Interest (inlcuding direct, incidental, & consequential)
Expectation Interest
The normal measures of damages is expectation damages. Generally, the party injured by a breach of contract has a right to damages based on the party’s expectation interest. Such damages are intended to give him the benefit of his bargain (by putting him in a position as he would have been in had the contract been performed).
Consequential damages are when a plaintiff suffers damages that go beyond the loss of the benefit of her bargain.
Causation, Certainty, and Foreseeability
Causation, Certainty, and Foreseeability
To be awarded consequential damages, the nonbreaching party must show causation, foreseeability, and unavoidability. Thus, consequential damages are not recoverable for loss that the party in breach did not have reason to foresee.
Liquidated Damages & Penalties and Limitation of Remedies
Liquidated Damages & Penalties and Limitation of Remedies
Liquidated damages are a variety of actual damages. Parties to a contract use liquidated damages where actual damages, though real, are difficult or impossible to prove. A liquidated damages caluse is considered to be a penalty only if it is plainly or grossly disproportionate to the probable loss anticipated when the contract was executed. If the clause is a penalty, it is unenforceable because of unconscionability.
Avoidable Consequences and Mitigation of Damages
Avoidable Consequences
In addition to foreseeability, consequential damages can be limited for reasons related to mitigation or avoidability. As a general rule, a party cannot recover damages for loss that the party could have avoided by reasonable efforts. Affirmative steps to avoid loss are not required, however, if they would involve undue risk, burden, and humiliation.
Rescission and Reformation
Rescission and Reformation
Rescission is the cancellation of the contract between the parties, usually as a result of a mutual or unilateral mistake. Reformation is a court order effectively rewriting contract documents to correct mistakes. It may require clear and convincing evidence to persuade a court that the writing is wrong.
Specific Performance and Injunction
Specific Performance and Injunction
Specific performance is an equitable remedy where the court orders a breaching party to perform that which they promised to perform under the contract. In lieu of specific performance, the party may seek an injunction. A party seeking an injunction must show irreparable harm, likelihood of success on the merits, and that a balancing of interests favors them.
Reliance and Restitution Interests
Reliance and Restitution Interests
A party is entitled to restitution for any benefit that he has conferred by way of part performance in excess of the loss that he has caused by his own breach. Reliance damages may be recovered where the nonbreaching party has incurred expenses in reasonable reliance upon the defendant’s performing her contractual obligations.
Remedial Rights of Breaching Parties
Remedial Rights of Breaching Parties
A breaching party will not be able to recover under the contract. However, the breaching party is entitled to recover under quasi-contract for the reasonable value of his services minus any damages the aggrieved party will suffer due to the breach.
