Contracts 7: Remedies

• Specific performance: available for real property and "unique" goods
• Seller's right to reclaim: within 10 days after receipt if buyer was involvent when it received the goods, or at any time if buyer misrepresented its solvency to the seller in writing within 3 months before delivery

Generally, only when monetary damages are INADEQUATE to compensate the injured party.

ARTICLE 2 SOG: Specific performance is available only if the goods are UNIQUE or there are "OTHER PROPER CIRCUMSTANCES" (e.g., an inability to buy substitute goods in the market).

SERVICE CONTRACTS: Specific performance is NEVER available, but INJUNCTIVE relief may be.

• From the Buyer
• Generally, NO.

• EXCEPTIONS:
• 1. Buyer was INSOLVENT when it RECEIVED the goods AND seller makes a demand within TEN DAYS after buyer received them.
• 2. Buyer MISREPRESENTED its solvency to seller in writing within THREE MONTHS BEFORE delivery.

• From a Third Party
• NO -- no right to reclaim from an innocent third party

• PUNITIVE damages
• LIQUIDATED damages
• EXPECTATION damages
• INCIDENTIAL damages
• CONSEQUENTIAL damages
• AVOIDABLE damages

You cannot.

The purpose of contract damages is to COMPENSATE, not to PUNISH.

Liquidated damages are damages set out in the contract agreement before breach occurs.

They are upheld if damages were DIFFICULT TO ESTIMATE and are a REASONABLE FORECAST of probable damages.

HOWEVER, they cannot operate as a penalty.

• Common Law: liquidated damages are NOT upheld. All that matters is reasonableness AT THE TIME of the contract agreement.
• Article 2 SOG: liquidated damages are UPHELD. Reasonableness requirement can be met at either the time of the agreement or of breach.

EXPECTATION damages: it puts an injured party in AS GOOD A POSITION as full performance.

• BUYER's damages: cover price - contract price (if buyer covers in GOOD FAITH)
• MARKET damages: market price - contract price (if buyer does NOT cover in good faith or does not cover at all)
• LOSS IN VALUE: value as promised - value delivered (if buyer KEEPS non-conforming goods)
• INCIDENTAL damages: costs to the injured buyer or seller of TRANSPORTING/CARING for goods after a breach and of arranging a substitute transaction

• RESALE damages: contract price - resale price (if seller resells in GOOD FAITH)
• LOST profit: profit it would have made on the initial sale (if seller is a LOST VOLUME DEALER)
• CONTRACT price: (seller cannot resell the goods)
• INCIDENTAL damages: costs to the injured buyer or seller of TRANSPORTING/CARING for goods after a breach and of arranging a substitute transaction

Damages special to THIS plaintiff that were REASONABLY FORESEEABLE to the breaching party at the time of the contract.

seller under Article 2 SOG contract

damages that the injured party could have mitigated with reasonable effort

Injured party's damages will be reduced accordingly.