Breach
Common Law Minor Breach
Aggrieved party gets substantial benefit of the bargain so they must perform but are entitled to damages
Seller's Right to Cure
Seller has right to cure defective shipment within original time for performance by giving notice and tendering conforming goods
UCC Buyer's Damages
(1) cover - difference between contract price and cost of replacement goods
(2) difference between contract price and market price
(3) warranty damages
(4) consequential damages if seller knew of buyer's needs
Construction Contracts (breach by builder)
Before/During Construction: cost of completion plus compensation for delay
Late Completion: value of lost use
Mailbox Rule (and limitations)
An acceptance is effective upon dispatch BUT does not apply if offeror expressly opts out, rejection is sent first, or there is an option contract
Common Law Material Breach
Aggrieved party doesn't receive substantial benefit or bargain so has no duty to perform and has immediate right to damages and other remedies
Anticipatory Repudiation
Party unequivocally indicates they will not perform before time of performance
UCC Seller's Damages
(1) Difference between contract price and resale price
(2) Difference between contract price and market price
(3) Lost profits (lost volume seller)
Measure of Restitution
(1) value of benefit conferred OR
(2) if the benefit is difficult to measure or the result is unfair, the value of detriment suffered by the plaintiff
Nondelegatable Duties
- those involving personal judgement or skill
- those involving special trust in delegator
- those restricted by contract
- those the performance of which by a delegate materially alters the obligee's expectancy
Perfect Tender Rule
If goods or delivery fail to conform to a contract in any way, a buyer may reject all, accept all, or accept any commercial and reject the rest (with an exception for installment contracts
Specific Performance (uses and limitations)
- used when damages are inadequate such as for land or unique goods
- cannot be used for services
Land Sale Contracts
- specific performance OR
- difference between the contract price and fair market value
Recission
Contract voidable/rescinded if:
- mistake of material fact
- misrepresentation of material factor
- duress
- undue influence
- illegality
- incapacity
- failure of consideration
Effect of Provision Prohibiting Assignment of "contractual rights"
Assignor has the power but not right to assign - assignment is effective but obligor can sue for breach
Right to Reject Goods Cut Off
1) indication to seller that goods conform or buyer will keep the goods
2) failure to reject within reasonable time
3) failure to notify seller of rejection in a reasonable time
4) actions inconsistent with seller's ownership
Compensatory Damages (name and explain both types)
Expectation: put the nonbreaching party in the position they would have been had the promise been performed
Consequential: special damages in additional to expectation damages reflecting losses from breach due to particular circumstances (must be foreseeable)
Employment Contracts
Employee Breach: cost to replace employee
Employer Breach: full contract price
Reformation
Writing changed to conform to parties' original intent if there was:
1) an agreement between the parties
2) an agreement to put it in writing
3) a variance between the original agreement and the writing
Effect of Contract Provision Prohibiting Assignment "of the contract"
Only delegation of duties are barred
Revocation of Acceptance
Goods have defect substantially impairing the value AND
1) goods were accepted on reasonable belief thatseller would cure OR
2) goods accepted because discovering defect was difficult or seller assured goods conformed to contract
Enforceability of Liquidated Damages Clauses
Enforceable if:
(1) actual damages difficult to calculate at the time of contracting AND
(2) amount is a reasonable forecast of the likely damages
Construction Contracts (breach by owner)
Before Construction: builder's prospective profits
During Construction: contract price minus the cost of completion
After Construction: full contract price plus interest
Vesting of Third-Party Beneficiary Rights
1) assent by TPB
2) TPB's suit to enforce on the promise OR
3) TPB materially changes position in justifiable reliance
Successive Assignments of Same Rights (irrevocable and revocable)
Revocable: subsequent assignee wins
Irrevocable: first assignee has priority