Contracts Flash Cards.txt

Bridge to nowhere. Mitigation/not piling on damages. Plaintiff does not recover avoidable costs.

Sunflower seed breach. P is to buy from D and then re-sell to 3P. (Market price goes way up). D says P can only sue for how much he would have marked up the seeds to the 3P. Ct. disagrees�cost of cover is better. We want to use UCC 2-713 b/c it would put P in the same shape he would have been in had BOTH contracts been performed.

Mitigation of damages in employment. General rule: recovery by wrongly-terminated employee is promised salary less how much the employee actually earned through other employment OR how much the employer proves the employee could have earned. Caveat: Employee doesn�t have to take a very different or inferior job.

Remedying defects. General rule: express conditions must be strictly adhered to. In this case, however, cost of completion would require tearing down and rebuilding the whole house vs. market value difference=$0.00. We normally care about personal value to the P, but it�s not dispositive in cases of (1) imperfect performance or (2) changed circumstances (Groves).

P leases land for 10 years and D agrees to turn it back over restored (�uniform grade�). Great Depression happens. Ct awards price of completion here. (1) doesn�t want to reward faithless contractors, and (2) doesn�t want to reduce P�s power to contract for the future.

Strip mining and D failed to do restorative work. HUGE diff between market value change and cost of completion. Court applies R1st test and awards difference in mkt value

Broken mill shaft. Damages must be foreseeable or agreed upon contractually. Hadley approach says BOTH parties must foresee damages (diff from R2d).

Building dome on P�s land. D breaches and P�s land value doesn�t go up. Must foresee that (1) damages could occur and that (2) D would be liable for said damages. Allows an assumption of risk in contract.

Book and Bottle Store. Anticipated lost profits despite no history. Some courts don�t allow this.

Liquidated damages clause: If D cancels lease, D has to pay P pro-rata reimbursement for any improvement costs and 25% of P�s gross-receipts for one year. Ct: looks too much like a penalty.

More likely to uphold stipulated damages clause if (1) dmgs are hard to calculate and (2) parties tried reasonably to fix fair compensation (3) stipulated dmgs bears reasonable relation to probable damages and (4) stipulated dmgs aren�t really disproportionate to anticipated dmgs. Ct. holds that stip dmgs clause is ok here.

Soda and tobacco. Parole evidence. Additional non-conflicting term. (1) Is writing integrated? (2) is it completely integrated? (3) if yes to both, no evidence of conflicting or additional terms is allowed Holding: contract embraces field of alleged oral contract, so evidence is inadmissible.

Jurisdiction? Is writing integrated? Completely integrated? Clear on its face? Ambiguous or vague terms? Is the topic in dispute addressed in the written contract?

Traynor lets everything in (if ya know what I mean), even stuff that contradicts a �default term�

Mutual mistake. Mistake must be mutual�if so, parole evidence will be allowed to show mutual mistake. Even if terms are different.

What is chicken? Term is ambiguous. P didn�t meet its burden of proof in showing it�s interpretation is more plausible.

Peerless ships. Latent ambiguity with no way to choose between terms. There is no OBJECTIVE way to choose between meanings.

NY case. Parole evidence in interpreting terms. If there is no ambiguity as to meaning of term, cannot allow in interpretive parole evid. 4 corners approach.

More Traynor. Can�t let judge�s �linguistic background� limit possible interpretations. No �perfect verbal expression.� Must include all evidence to DETERMINE IF TERM IS AMBIGUOUS. If it is not, no PE to determine alt. meaning. If it is, let it all in.

Order of performance; , the work must be substantially performed before payment can be demanded.

Must assume mutuality of promises. Constructive condition of exchange.

Misplaced wall when building home. Essential purpose of contract, substantial performance.

Divisibility of performance. Was there a benefit to P? Several distinct items? Prices apportioned?

Restitution for BREACHING party. Servant quits working for his boss 3 months before the year long contract is up. Sues for benefit conferred.

Restitution for breaching party. Give them market value of what they�ve done to materially enrich other party less damages.

Tomato on billboard.

Implied duty not to prevent other party from performing. This ct. says that short of outright prevention, you have not breached this implied duty. Other party is not excused from their performance.

You should only tell the breaching party what the breach was if you want to allow the breaching party to cure, BUT after doing this, you can only give the reason that you gave them to terminate the contract if the breaching party relied to its detriment on that statement � you can still sue for damages based on other justifications.

R2d � 45

Losing Contracts; can only recover restitution damages if it?s going to be a losing contract.

Lost volume seller?. To prove it is a lost volume seller, ? has to show (1) that it could have produced the breached units in addition to its actual volume, (2) that it would have been profitable to product both units, AND (3) that it probably would have made the second sale absent the breach.