Remedies

Question 1

What are the three main interests of a promisee that remedies for breach of contract aim to protect?

Answer 1

• Expectation interest
• Reliance interest
• Restitution interest

expectation damages
designed to provide the non-breaching party the benefit of the bargain

reliance damages
designed to compensate the non-breaching party for losses due to reliance on the contract –> i.e. restore n-b party to position had K never been made

restitution damages
designed to restore benefits conferred to the other party –> i.e. restore breaching party to position had n-b party not partially performed

Question 2

Expectation Damages

Answer 2

the non-breaching party receives the benefit of the bargain by being put in as good a position as if the contract had been performed

Question 3

Reliance Damages

Answer 3

protect the non-breaching party’s interest in being reimbursed for loss caused by reliance on the contract by being put in as good a position as he would have been in had the contract not been made

Question 4

Restitution Damages

Answer 4

restore to the non-breaching party any benefit conferred on the other party

Question 5

What is the default remedy for breach of contract?

Answer 5

Monetary Damages

Money damages are the primary form of relief available to a plaintiff for breach of contract – in the form of expectation, reliance or restitution damages

Question 6

List the types of monetary damages available for breach of contract.

Answer 6

• Expectation Damages
• Reliance Damages
• Restitution

These damages are designed primarily to compensate the injured party for the harm suffered due to the breach.

Question 7

True or False: A plaintiff can recover both expectation damages and reliance damages.

Answer 7

False

P cannot, simultaneously, be compensated for what he would have made had the contract been performed as well as had it never been made

Question 8

What is the most common type of remedy available for breach of contract?

Answer 8

An award for money damages based on the plaintiff’s lost expectations

(expectation damages)

Question 9

What is the formula used to calculate expectation damages?

Answer 9

Expectation Damages = (Loss in Value) + (Other Loss) – (Cost Avoided) – (Loss Avoided)

LV + OL - CA - LA

Question 10

How is Loss in Value calculated?

Answer 10

(The value that the plaintiff should have received under the contract) – (the value that the plaintiff did receive)

value expected - value received

Question 11

What components make up Other Loss?

Answer 11

• Incidental Costs
• Consequential Costs

other loss = (inciental costs) + (consequential costs)

Question 12

INCIDENTAL COSTS

Answer 12

Costs incurred in a reasonable attempt to avoid loss even if unsuccessful.

(e.g., cost of storing rejected goods, finding a new buyer, finding a replacement vendor, etc.).

Question 13

CONSEQUENTIAL COSTS

Answer 13

Foreseeable costs unique to the plaintiff incurred as a result of the breach.

Question 14

Are unforeseeable consequential costs recoverable?

Answer 14

No, unless the breaching party had some reason to know about the possibility of the unforeseeable damages.

Question 15

COST AVOIDED

Answer 15

The value that the plaintiff saves by not having to perform any further.

Question 16

LOSS AVOIDED

Answer 16

The value that the plaintiff recovers by salvaging or relocating resources.

Question 17

True or False: Consequential Costs are always recoverable.

Answer 17

False.

only if foreseeable

Question 18

What are reliance damages?

Answer 18

Expenditures made in preparation for performance or in performance, less any loss that the breaching party can prove with reasonable certainty the plaintiff would have suffered had the contract been performed.

In other words, reliance damages usually consist of nothing more than the expenses that the plaintiff incurred in reliance on the contract

Question 19

When does a plaintiff typically seek reliance damages?

Answer 19

When calculating expectation damages is too speculative.

For example, lost profits of an unproven business venture are often too speculative.

Question 20

What do reliance damages usually consist of?

Answer 20

Expenses that the plaintiff incurred in reliance on the contract.

These expenses are relevant when expectation damages are difficult to ascertain.

Question 21

True or False: Reliance damages can include lost profits from a business venture.

Answer 21

False

Lost profits from an unproven business venture are often considered too speculative to be included in reliance damages.

Question 22

What is the goal of restitution?

Answer 22

To prevent unjust enrichment

Restitution aims to restore the economic balance between parties.

Question 23

What do damages in restitution award the plaintiff?

Answer 23

An amount equal to the economic benefit conferred on the defendant

Question 24

In contract law, when may restitution be available?

Answer 24

• As a remedy for breach of contract
• To prevent unjust enrichment with part performance of an unenforceable contract; AND
• As a remedy for a breaching party who has partially performed before the breach

Question 25

What is a key difference between restitution and reliance damages?

Answer 25

To be entitled to restitution, the plaintiff must have conferred a benefit on the defendant ## Footnote Reliance damages focus on the plaintiff's expenses rather than benefits conferred.

Question 26

What is equitable relief?

Answer 26

A remedy pursued when monetary damages are inadequate, compelling the breaching party to take or refrain from an action. ## Footnote Equitable relief is often sought in situations where monetary compensation would not suffice to address the harm done.

Question 27

What factors do courts consider to determine the adequacy of monetary damages?

Answer 27

* Difficulty of proving damages with reasonable certainty * Hardship to the defendant * Balance of equities * Practicality of enforcement; AND * Mutuality of the agreement ## Footnote These factors help assess whether equitable relief is appropriate in a given case.

Question 28

What is specific performance in contract law?

Answer 28

A legal remedy that compels a defendant to fulfill their contractual duties, potentially through contempt of court. ## Footnote Specific performance is commonly sought when the subject matter involves unique goods or real estate.

Question 29

What is the right of reclamation under UCC § 2-702?

Answer 29

A seller's right to reclaim goods sent to a buyer under specific conditions. ## Footnote This right arises when the buyer is insolvent or when a check is dishonored.

Question 30

Under what conditions can a seller reclaim goods from an insolvent buyer?

Answer 30

* If the buyer is insolvent and the seller makes a demand within 10 days after receipt of goods * If the buyer misrepresented solvency in writing within 3 months before delivery * If the buyer's check is dishonored, upon reasonable demand ## Footnote The 10-day rule does not apply if there was a misrepresentation of solvency in writing w/in 3 months before delivery.

Question 31

What is the duty to mitigate damages?

Answer 31

The obligation of a plaintiff to take reasonable steps to reduce their losses. ## Footnote Failure to mitigate can result in a reduction of the total damages awarded by the court.

Question 32

True or False: The court will not reduce damages if the plaintiff fails to mitigate their losses.

Answer 32

False ## Footnote The court will reduce the total damages by the amount that could have been avoided had the plaintiff taken reasonable steps.

Question 33

when parties incorporate obligations that are in most respects separable into a single document or agreement, can the obligation be treated as separate when calculating damages?

Answer 33

Yes, where the breaching party completely satisfies certain obligations of an agreement while failing to satisfy others, the satisfied obligations can be considered separately from the unsatisfied ones.