Expectation Damages
what is the basic rule to compensate a party that has suffered as result of a breach of contract?
he basic rule is: award the non-breaching party enough money to put that party in the same position he or she would have been if the contract had been performed. More precisely, there are three steps:
(1) Figure out what the position of the non-breaching party would have been if the promise had not been breached;
(2) Figure out the position that the non-breacher is presently in as a result of the breach;
(3) Figure how much he or she needs to get from the present position to the position he or she would have been in if the contract had been performed.
This is called the expectation measure of damages.
Something that is generally foreseeable is just foreseeable: true or false
False, it is reasonably foreseeable
Would there be consideration if A and B make a deal that A will watch B's child for $40 this evening, even if A is unaware B will not accept the money?
there is consideration
Mills v. Wyman, 3 Pick. [20 Mass.] 207 (1825), Mills sued D for caring for his son levi, the adult son of the defendant Wyman. Levi became ill and was taken in by P. After the expenses had already been incurred, D wrote to P and agreed to pay, but he never did.
How did the ct rule:
Where bargained-for-exchange is lacking because the benefit to the promisor (if any) was in the past, the promise is unenforceable. Mills demonstrates that this holds true. Whatever service Mills might have performed, it was done in the past without the request of Wyman.
Sarah owes Cindy $ 1500 for some clothes and is about to go into bankruptcy. Immediately before filing her petition Sarah promises Cindy to pay the debt in spite of any discharge that she may get in bankruptcy. Is this enforceable
not enforceable
HAWKINS v. McGee
Dr. Hawkins promised George McGee that he would surgically repair a pencil-thin scar on the palm P's hand. He promised P a perfect hand. The dr. grafted skin onto the palm, but the scar tissue from the skin graft was far more unsightly than the original scar, and -worst of all- the grafted skin grew hair. The operation left P with a hairy hand. Will P receive money for the Dr.'s fees and pain of operation?
No, because he would have experienced those anyway, regardless of the breach.
The Hadley brothers owned and operated a mill; when their shaft broke, they contracted to have the shaft transported from their location at Glouster to the repair facility at Greenwich. The shippers breached the delivery contract by carelessly delaying the delivery. The shaft arrived in six days late. They didn't have a spare. so it lost 6 days of profit. were the loss of profits reasonably foreseeable? why? what damages are they entitled to?
This was not reasonably foreseeable because they were expected to have a spare as most mills do. Those the shippers are not on hook because these particular millers do not. They are not entitled to the 6-day profit but they are entitled to other forms of compensation
Recovery under the material benefit rule may be limited if the value of the later promise is disproportionate to the benefit received.
True or false
True
The Bells, a band, contracted with McBride to provide music for her wedding reception. The Bells were to play from 8:00 pm to midnight. The price agreed on was $ 295. The Bells never showed up, but McBride was able to find a friend who set up some stereo equipment about 9:00 pm. McBride requests the entire cost of the reception in damages, $ 2,643.59. Her damages should be:
the difference in value between a reception with music by the Bells and a reception with stereo music from 9:00 pm.
Larry owes Bill a debt of $ 500 for first editions of all of Bill's books. The debt is barred by the statute of limitations. Larry writes to Bill, "I promise to pay you $ 500 for the debt which I owe." Is this enforceable?
Yes
I Promise to build you a tree house if you pay me. We agree. I get the money but I do not build anything, yet I also harm anything. what are you entitled to?
The difference between a yard with a treehouse in and a yard without.
What are special damages?
"special" damages--if the non-breacher brought the possibility of such damages to the attention of the other party at the time of contracting.
A lost control of her arm after saving her boss D from a car accident. A was promised a 1k per month stipend and a salary at a new more accessible jo b of 41k. Later, A, was reassigned to the new position. After the first month at her new position, A was paid her regular salary of plus stipend. However, the following month A received only her salary but was not paid the stipend. When A requested the additional amount, D refused to pay, saying he changed his mind. Under the majority rule, if A brings a contract action against Budget to recover for the unpaid stipend, which of the following is D's best defense?
D's promise to pay the monthly stipend was nudum pactum (bare promise) in that it did not by its terms purport to bargain for or induce A's decision to return to work.
J bought a puppy, from D, Inc. for $800, promising to pay $50 per month until paid. J finds herself unable to pay. Afterwards, J sees D. J tells D that she is getting a new job in January and that if D comes to see her in April she will pay D $400 toward the bill for the dog. J later finds herself unable to pay D and refuses to pay. Considering only common law rules, must Jennifer pay the $400? and why? Must she pay 800 0r 400?
es, because Jennifer promised to pay the $400, so she owes 400.
L is induced by P's jewelry shop to promise 20K in return for a diamond necklace worn once by Jane Austen which is a fake. After discovering the fraud L promises to pay P as agreed.
The fraud would be a grounds for avoiding the contract here. But, L's later promise to pay after the fraud is discovered is enforceable unless the promise is unenforceable for some other reason. This fact pattern is based on Restatement § 85 cmt. b, illus. 1.
Alice and Bill contract for Alice to clean Bill's office for $ 20. Alice does a terrible job. She just hides all the trash in a file cabinet and leaves dirt and grime everywhere. Assume Alice's terrible job is a breach of her promise to clean the office. Bill is so upset that he refuses to pay Alice. Alice sues for breach of contract. What are her expectation damages?
He owes alice 20 but he can sue alice for breach of contract.
what is the purpuse of awarding damages
not only to compensate but divide the cost of burdens
n the well known case of Webb v. McGowin, 168 So. 196 (1935, McGowin, an owner of a mill, was saved from death by Webb, an employee. Webb was badly injured when he fell from an upper level of the lumber mill to save McGowin. McGowin promised to pay $15 every two weeks to Webb for life. McGowin paid Webb, but the executors of his estate stopped payments after his death.
''moral obligation is a sufficient consideration to support a subsequent promise to pay where the promisor has received a material benefit, although there was no original duty or liability resting on the promisor." Id. at 198. Although the rule of Webb, often called the "material benefit" rule is a minority rule, Restatement § 86 follows the rule. See also, 3-9 Corbin on Contracts § 9.24.
J bought dog from D. J has not declared bankruptcy. J, though, is contemplating bankruptcy. She offers D $400 in full settlement of a debt of $800. D dissuades J from going into bankruptcy, accepts the offer, receives the money, and closes the account. Was there consideration for D's promise to accept less than $800? See Restatement § 73.
Enforceable! It is sometimes to the promisor's benefit to make this type of deal to induce performance outside of bankruptcy proceedings. This problem is based on Restatement § 73, illustration 6.
Abby loans her friend Brandon, a 19 year old college student, $200 to see him through the end of the semester. After Brandon dies in a car accident, his mother, Carrie promises to pay Abby $200.
unEnforceable
What are the three steps to satisfy the basic rule of damages in the case of a breach of contract.
More precisely, there are three steps:
(1) Figure out what the position of the non-breaching party would have been if the promise had not been breached;
(2) Figure out the position that the non-breacher is presently in as a result of the breach;
(3) Figure how much he or she needs to get from the present position to the position he or she would have been in if the contract had been performed.
This is called the expectation measure of damages.
what does the Hadly Rule exactly say (hint: not just reasonably foreseeable)?
Hadley actually says that
(1) the non-breacher always gets damages arising in the usual course of things--called "general damages"; but
(2) the non-breacher only gets those damages not arising in the normal course of things--called "special" damages--if the non-breacher brought the possibility of such damages to the attention of the other party at the time of contracting.
Can consideration be meritrious in nature
No, because meritrious is sexual relationship whip which is against public policy to be considered a form of consideration
Although a person might be morally obligated to abide by such a promise, it is not typically enforceable as a contract. There are three exceptions to this general rule which find that moral obligation may be sufficient to support the promises:
1. A promise to pay that is discharged by law (statute of limitations and bankruptcy discharges);
2. A promise to perform a previous undertaking that was voidable due to a defense (infancy and incapacitated persons); and
3. A promise to pay for a benefit already received (the ''Material Benefit'' Rule).
The Bankruptcy Reform Act requires certain formalities in any agreement to reaffirm a debt discharged in bankruptcy (called a "reaffirmation agreement"):
(1) the agreement to pay the debt must be made before the discharge;
(2) it must contain a clear and conspicuous statement advising the debtor of the ability to rescind any time prior to bankruptcy discharge or within sixty days after the agreement is filed with the court;
(3) it must be filed with the bankruptcy court, and include certain statements when the debtor is represented by an attorney;
(4) it must state no rescission has occurred; and,
(5) requires court approval in some instances.