Damages
What are compensatory damages?
(expectation + consequential + incidental damages) - mitigation.
What are incidental damages?
Damages awarded to the nonbreaching party as compensation for commercially reasonable expenses incurred as a result of the other party's breach.
What is the basic prerequisite for specific performance in contracts?
Legal remedies (money damages) must be inadequate, and the court must be able to enforce the order with reasonably definite terms
What does the economic waste doctrine do to the usual “cost of repair/completion” measure of damages?
It limits damages to diminution in value when fixing the defect would require destruction/rebuilding and the repair cost is grossly disproportionate to the benefit gained.
What are expectation damages?
Expectation damages are intended to put the nonbreaching party in the same position as if the contract had been performed. Expectation damages must be calculated with reasonable certainty.
What are liquidated damages?
Damages that are written into the contract
What type of contract is the classic scenario for specific performance and why?
Contracts for the sale of real property, because each parcel of land is considered unique.
What is the core idea behind restitution/unjust enrichment?
A party who has been unjustly enriched at another’s expense must restore the benefit to prevent unfair gain.
What are consequential damages?
Damages that arise out of special circumstances unique to the parties to the contract, rather than arising necessarily from the transaction itself. Consequential damages must be reasonably foreseeable by the breaching party to be recoverable. The plaintiff must prove the dollar amount of the damages with reasonable certainty.
What are punitive damages?
Damages that are to punish the defendant for outrageous behavior
Under the UCC, when is specific performance most likely available for the sale of goods?
When the goods are unique (e.g., art, rare items) or in “other proper circumstances,” such as when cover is impracticable.
What is “quantum meruit,” and when is it commonly awarded?
“As much as deserved”—restitution for the reasonable value of services when no enforceable contract exists (or when a contract is unenforceable but a benefit was conferred).
What are the buyer's remedies under the UCC?
If the seller fails to tender the goods, the buyer may (1) cancel the contract; (2) recover any payments made to the seller for the goods; (3) recover damages; (4) cover - purchase similar goods elsewhere and recover the replacement price minus the contract price; (5) demand specific performance for unique goods; or (6) replevin.
What is the lost volume seller?
A volume seller cannot be made whole through resale at the contract price because they have an unlimited supply of goods and make a profit per item. The lost volume seller is entitled to lost profits if she can show that she would have supplied both the breaching purchaser and the resale purchaser with the goods.
The measure of the lost profit is the list price minus the cost to the dealer or manufacturer.
Name four equitable defenses that can defeat a request for specific performance.
(1) laches (unreasonable delay)
(2) unclean hands (plaintiff’s inequitable conduct)
(3) undue hardship
(4) unconscionability
What’s the difference between expectation damages and reliance damages, and which is tied to promissory estoppel?
Expectation puts the plaintiff in the position as if the contract were performed; reliance reimburses costs incurred in reliance. Promissory estoppel typically supports reliance (sometimes limited expectation if necessary to avoid injustice).
What are the seller's remedies under the UCC?
If the buyer breaches, the seller may (1) recover the full contract price and incidental damages; (2) reclaim the goods when the buyer is insolvent (demand must be made within 10 days of the buyer's receipt of the goods) or check is dishonored; (3) stop the goods in transit.
If the buyer wrongfully rejects, the seller may (1) collect damages; (2) resell the goods; and (3) recover the price if he cannot sell the goods at a reasonable price after a reasonable effort. Also entitled to any incidental damages.
What is the duty to mitigate?
After breach, you must take steps to prevent unnecessary risk, financial loss, or incontinence.
If a buyer seeks specific performance for goods but can readily cover on the market, what is the likely result and why?
Specific performance is usually denied because cover makes damages adequate, so equity won’t compel performance.
In restitution, how do you measure the remedy when the defendant received a benefit from the plaintiff?
The value of the benefit conferred (often measured by defendant’s enrichment or the reasonable value of services/materials), not the plaintiff’s expected profit.