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Chapter 13 Contracts: Breach and Remedies. Damages. Compensatory Damages. Compensate injured party for damages actually sustained. Sale of Goods : difference between the contract and market price. Sale of Land : same as sale of goods.
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Damages • Compensatory Damages. • Compensate injured party for damages actually sustained. • Sale of Goods: difference between the contract and market price. • Sale of Land: same as sale of goods. • C0nstruction Contracts: depends on when and who breaches.
Damages • Consequential Damages. • Foreseeable damages the breaching party is aware--or should be aware—of that cause damage as a consequence of the original injury. cause the injury party additional loss. • Punitive Damages. • Designed to punish the wrongdoer and deter similar activity in the future. • Nominal Damages. • No financial loss.
Mitigation of Damages • When breach of contract occurs, the innocent injured party is held to a duty to reduce the damages that he or she suffered. • Duty owed depends on the nature of the contract. • Case 13.1 Parker v. Twentieth Century Fox Film Corp (1970).
Rescission and Restitution • Rescission. • A remedy whereby a contract is canceled and the parties are restored to the original positions that they occupied prior to the transactions. • Restitution. • Both parties must return goods, property, or money previously conveyed.
Specific Performance • An equitable remedy calling for the performance of the act promised in the contract. • Remedy in cases where the consideration is: • Unique; • Scarce; or • Not available remedy in contracts for personal services.
Reformation • Equitable remedy allowing a contract to be reformed, or rewritten to reflect the parties true intentions. • Available when an agreement is imperfectly expressed in writing.
Recovery Based on Quasi Contract • Equitable theory imposed by courts to obtain justice and prevent unjust enrichment. • A benefit was conferred to the other party. • Party conferring did so with the reasonable expectation of being paid. • The benefit was not volunteered. • Retaining benefit without paying for it would result in unjust enrichmentof the party receiving the benefit. • Quantum meruit.Case 13.2 Maglica v. Maglica (1998).
Election of Remedies • Doctrine created to prevent double recovery. • Nonbreaching party must choose which remedy to pursue. • UCC rejects election of remedies. • Cumulative in nature and include all the available remedies for breach of contract. • Case 13.3 Palmer v. Hayes (1995).
Contract Provisions Limiting Remedies • Exculpatory clauses. • Provisions stating that no damages can be recovered. • Limitation of liability clauses. • Provisions that affect the availability of certain remedies.
