contracts - 7. remedies.txt

• 1) Compensatory
• 2) Liquidated
• 3) Punitive - unavailable for K actions
• 4) Restitution
• 5) Equitable Relief

• put nonbreaching party in position he would have been had promise been performed
• purpose is to compensate P, not punish D for breach. No punitive damages for breach
• 1) expectation damages (benefit of the bargain)
• 2) incidental damages (costs incurred in dealing with breach, finding a replacement; always recoverable)
• 2) reliance damages (cost of plaintiff's performance)
• 3) consequential damages (special damages)
• Note: P must subtract avoidable damages

• Bar essay: write this
• 1) The purpose of money damages is to compensate.
• 2) In CA, money damage rules are based on protection of the non-breaching party’s expectation interests.
• 3) That means that a person making a contract expects that it will be performed without breach.
• 4) That means money damages are based on the amount of money required to put the plaintiff in the same economic position as if the contract had been performed without breach.
• Formula: ($ value of performance w/o breach) – ($ value of performance w/breach)

• 1) special damages arising from P’s special circumstances,
• 2) which D knows of at time of K,
• 2) only if foreseeable

• no recovery for damages that could have been avoided w/out undue burden on P
• [Continuing to perform after the other party’s breach, not recov.]
• [Turning down other, comparable opportunities, not recov.]
• This is a defense, thus BOP on Defendant, NOT P’s duty to mitigate

(FMV if perfect) – (FMV as delivered)

(Mkt price at time of breach [or reasonable replacement price, whichever is greater]) – (K price)

(K price)

• (K price) – (resale price [mkt price @ delivery])
• UNLESS: lost volume seller rule applies

• 1) supply of goods unlimited
• 2) damages = provable lost profits
• Ex: Seller contracts to sell leather clothing to D for $1,000.
• (Assume that D is buying goods that are part of Seller's regular inventory – “off the rack” so to speak.)
• D breaches. Seller sells the very same items to Buyer2 for $1,000.
• Seller can recover lost profits from D.

• contract provision that sets the amt of damages; concern is penalty is too high, against public policy as a punishment
• Requirements:
• 1) Damages were difficult to calculate at the time the K was formed
• 2) Amount must be a reasonable forecast of damages, and NOT a penalty

• Certainty Limitation: Damages must be established with reasonable certainty
• so if new business, try RELIANCE recovery (below)

puts P back in same position as if no K

• Quasi-contract relief
• Measured by value of the benefit conferred:
• 1. Benefit of the bargain: contract price minus “cover” price
• 2. Net benefit received: reasonable value of breaching party’s services less damage incurred due to the breaching party’s failure to perform

• establishes ceiling. If unconscionable- not allowed.
• Concern is penalty is too low

• Type of equitable remedy
• Requires
• 1) valid K
• 2) satisfaction of P's conditions/Performance
• 3) inadequate remedy at law [money damages not adequate]
• 4) feasibility

• 1) Judicial administration concern of enforcing specific performance – how would the court enforce the order to require player to play for the team he didn’t want to? Owner tells the judge he missed 3 shots last night
• 2) balance judicial administration vs. difficulty of determining money damages

• 1) Ks for real estate sales (but NO specific performance when there’s a 3rd party bona fide purchaser from seller that will be harmed by specific performance)
• 2) Goods if UNIQUE (antique, art, custom-made)
• 3) NEVER SP for services K, but court has discretion to grant injunctive relief to compel someone to not work for a competitor

[limited] right of unpaid seller to get its goods back

• 1) Buyer must have been insolvent at the time the goods received,
• 2) Seller demands return of goods within 10 days of receipt of goods, and
• 3) Buyer has goods at the time of demand.

• 1) identified goods
• 2) FULLY PAID for goods
• 3) seller who becomes insolvent within 10 days

• Cancels K for:
• 1) mistake
• 2) fraud
• 3) duress
• 4) breach

modifying a written agreement to reflect the parties' agreement