Introduction
Most Common Remedies:
§ Damages.
§ Rescission and
Restitution.
§ Specific
Performance.
§ Reformation.
§ Recovery Based
on Quasi Contract.
Damages
Compensatory Damages—direct
losses.
§ Sale of Goods: difference
between contract and market price.
§ Sale of Land:
specific performance.
§ Construction
Contracts: varies.
Consequential (Special)
Damages—foreseeable losses.
§ Breaching party
is aware or should be aware, because the injury party additional loss.
Case 17.1: Hadley v.
Baxendale (1854).
Punitive Damages—punish or deter
future conduct.
§ Generally not
available for mere breach of contract.
§ Usually tort
(e.g., fraud) is also involved.
Nominal Damages—no financial
loss.
§ Defendant is
liable but only a technical injury.
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 17.2: Fujitsu Ltd.
v. Federal Express Corp. (2001).
Liquidated
Damages
Liquidated
Damages.
§ A contract
provides a specific amount to be paid as damages in the event of future default
or breach of contract.
Penalties.
§ Specify a
certain amount to be paid in the event of a default or breach of contract and
are designed to penalize the breaching party.
Case 17.3: Green Park Inn v. Moore (2002).
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.
Note: Rescission
does not always call for restitution. Restitution is called for in some cases
not involving rescission.
Specific
Performance
Equitable remedy calling for the
performance of the act promised in the contract.
Remedy in cases where the
consideration is:
§ Unique (land);
§ 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.
Party seeking quantum meruit
must show the following:
§ 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 enrichment of the party
receiving the benefit.
Election
of Remedies
Doctrine created to prevent
double recovery.
Non-breaching 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.
Waiver
of Breach
A pattern of conduct that waives
a number of successive breaches will operate as a continued waiver.
Non breaching party can still
recover damages, but contract is not terminated.
Non-breaching party should give
notice to the breaching party that full performance will be required in the
future.
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.
