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Chapter 9 Remedies for breach of contract

Chapter 9 Remedies for breach of contract. Breach of k is a party’s failure to perform his or her obligations under a k. A valid k that is breached by either party is still a valid k. So the court enforces a k. (the court is providing a remedy to the non-breaching party.)

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Chapter 9 Remedies for breach of contract

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  1. Chapter 9Remedies for breach of contract • Breach of k is a party’s failure to perform his or her obligations under a k. • A valid k that is breached by either party is still a valid k. So the court enforces a k. (the court is providing a remedy to the non-breaching party.) • Under CISG the court can impose two types of remedies for breach of K: monetary damages & specific performance. Prepaped by Leng kimhok

  2. Monetary Damages: The money that the breaching party pays to the non-breaching party for breach of k. There are two main types of monetary damages expectation damages and reliance damages. • Expectation damages: Monetary damages are made up of two components: compensatory damages and consequential damages. • Compensatory damages (direct loss): The breaching party compensates the non-breaching party for any loss suffered as a result of the breach, such as: profit which the non-breaching party would have earned from that K and any incidental expenses. (Art.74 of CISG) ☻-Study Question # 20 Prepaped by Leng kimhok

  3. Consequential damages: • The breaching party compensates the non-breaching party for any indirect losses resulting from the breach which were reasonably foreseeable by reasonable person at the time the K was formed. • The breaching party is liable for those damages in addition to compensatory damages. • ☻-Study Question # 21 • Remember that the court can award both compensatory and consequential damages if necessary to make the non-breaching party “whole”. Ex: Dina is sued by Neam. • ☻-Study Question # 22 • Sambo also had an obligation to minimize her damages resulting from Saray’s breach. • The court will require the non-breaching party to take reasonable steps to limit the amount of consequential damages. Because Art.77 of CISG,the non-breaching party has an obligation to try to minimize the damages resulting from the other party’s breach. Prepaped by Leng kimhok

  4. Reliance Damages( direct loss): Occasionally, a court will not be able to determine the amount of expectation damages because they are too speculative. • Reliance damages are reimbursement for the costs that the non-breaching party incurred before the breach in reliance on the contractual obligations being fulfilled. • ☻-Study Question#23 • Specific Performance • In certain situations money alone may be insufficient to make the non-breaching party whole. So the court can order the breaching party to carry out its obligations under the K . • ( See example page 76 ) Prepaped by Leng kimhok

  5. Summery monetary damages • Remedies specific performance Prepaped by Leng kimhok

  6. Continued Expectation damages • Monetary damages Reliance damages Prepaped by Leng kimhok

  7. Continued • Expectation damages = compensatory damages + consequential damages Prepaped by Leng kimhok

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