remedies

Question 1

money damages

Answer 1

compensate P for economic loss NOT To punish - NO PUNITIVE DAMAGES

Question 2

GENERAL RULE - loss expectation

Answer 2

expectation interest - put back in same position as if K had been performed OF WHATEVER WAS PROMISED.

looking for AFTER THE FACT expectations

Question 3

Reliance Interest

Answer 3

put plaintiff is same economic position as if K had never happened

Question 4

P k’s to paint O’s house for $1000 payable in advance. O pays 1000. P does not paint the house. O hires another painter who charges 1400. What are O’s expectation damages?

Answer 4

1400 - puts O in the same position she would have been in had the job been completed. EXPECTATION INTEREST.

Question 5

P k’s to paint O’s house for 1000 payable when P completes work. P anticipates making 200 profit from the K, O breaches and P has started work and used up 50 of paint. Expectation damages?

Answer 5

250. Expected to gain 200 and 50 paint was used – but they give you what you should have had the K been completed.

Question 6

reliance = change in position…

Answer 6

between the start and the end of the deal?

Question 7

restitution interest

Answer 7

put D in same economic position as if K had never happened (UNJUST ENRICHMENT). take it away.

Question 8

P k’s to paint O’s house for $1000 payable in advance. O pays 1000. P does not paint the house. O hires another painter who charges 1400. What are restitution damages?

Answer 8

TAKE AWAY 1000 in restitution damages.

Question 9

when is reliance and restitution different?

Answer 9

Reliance = P’s spending (maybe she spent on other things that DIDN’t go to D for payment)

Restitution = takes away D’s unjust gain (maybe he only got X and P spent on other things. Take away ONLY what D unjustly received)

Question 10

P k’s to paint O’s house for 1000 payable when P completes work. P anticipates making 200 profit from the K, O breaches and P has started work and used up 50 of paint. Restitution Damages?

Answer 10

FAIR MARKET VALUE OF THE WORK DONE. Wasted paint doesn’t matter, look at the D’s enrichment.

Question 11

Art 2 damages

Answer 11

refelcts general K law damage philosophy of Expectation remedy

1. who breached
2. who has goods

4 possible Art. 2 fact patterns.

Question 12

1. Seller Breach, Buyer keeps the goods

Answer 12

Damages = (Fair Market value had good been delivered perfectly) - (FMV that the goods were actually delivered in)

Question 13

2. Seller Breach, seller keeps the goods

Answer 13

buyer gets the market price at the time of discovery of the breach MINUS the contract price.

ex. B k’s to buy carpet from S for $5000. S n ever delivers, at time of breach carpet worth $6600 for comparable carpeting. B can recover $1600.

Question 14

3. Buyer breach, buyer has the goods

Answer 14

Seller keeps the K price.

ex. S sells carpet to B for K price of $800. Buyer received and does not pay. B owes $800. Doesn’t matter what the market value of it is at the time delivered.

Question 15

4. Buyer breach, seller has the goods

Answer 15

K price minus market price at time of delivery

OR

K price minus resale price

OR

provable lost profits.

Question 16

4A example: C k’s to sell car to BG for $1000. BG breached. sells to EV for $800. damages?

Answer 16

1000 - 800 = 200 puts in the same position he though he’d be in.

Must be in good faith and commercially reasonable.

Question 17

4B example: C k’s to sell car to BG for $1000. BG breached. sells to EV for $1000. damages?

Answer 17

ZERO. NO DAMAGES.

Question 18

4B. S leathers K’s to sell leathers to D for 1000. ASsume that it’s inventory that’s regular inventory. D breached. S sells the very same items to J for 1000. Can S recover any damages from D?

If so, how much? What if S’s profit margin is 20% of the sales price?

Answer 18

YES (lost volume seller rule - different from just one item being sold)

how much? WTF.

20%? 20% x K price = 200.

Question 19

incidental damages (General)

Answer 19

costs incurred in dealing with the breach ALWAYS recoverable

cost of finding replacement deal

ex. S makes K with O, but breaches. O has to spend money to advertise for 20. S owes that 20 to O as incidental damages.

NO FORESEEABILITY - any reasonable person will know it.

Question 20

Foreseeable consequential (Special) damages

Answer 20

MUST BE FORESEEABLE - but special to P’s circumstances, recoverable ONLY if D had reason to know at time of K formation that it would happen.

Look for P telling D about special circumstances at the time K is formed.

Question 21

avoidable damages

Answer 21

no recovery for damages that could have been avoided without undue burden on the P. Burden of pleading and proof on D.

D must prove that you sat on your ass and no self-help.

this is DEFENSE

Question 22

certainty limitation

Answer 22

judgment call whether its a reasonable to think damages would actually occur

ex: P is a new business…not proven that P would make any money.

Question 23

liquidation damages (penalty clause)

Answer 23

look for K clause fixing amount of damages – issue will be validity, concern is whether it’s too high.

look for

1. damages were difficult to know at time of K (new store?)
2. provision is reasonable to know (judgment)

anytime liquidated damages at BIG lump sum - say it’s invalid and incongruent to damages.

Question 24

limitation of remedies

Answer 24

look for K provision limiting amount that can be recovered.

Question 25

S sells widgets to K. K provides that if widgets are defective, B’s recovery is limited to return of amount paid.

Answer 25

VALID.