Download Understanding Different Types of Damages and Equitable Remedies in Contract Law and more Slides Civil Law in PDF only on Docsity! BREACH AND REMEDIES
Learning Objectives • What is the difference between compensatory damages and consequential damages? What are nominal damages, and when do courts award nominal damages? Docsity.com Damages • Most Common Remedies: – Damages. – Rescission and Restitution. – Specific Performance. – Reformation. – Recovery Based on Quasi Contract. Docsity.com Damages • Compensatory Damages—designed to compensate nonbreaching party for loss of the bargain. – Damages actually sustained (out-of-pocket), directly arising from breach. – Standard Measure: difference between value of promised performance and value of actual performance. Docsity.com Damages • Compensatory Damages (cont’d). – Incidental Damages: expenses cause directly by breach of contract. – Measurement of Damages: • Sale of Goods: difference between contract and market price. • Sale of Land: specific performance. • Construction Contracts. Docsity.com Damages • 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. Docsity.com Damages • 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. Docsity.com Damages • Liquidated Damages Versus Penalties. – Liquidated Damages: specific amount agreed to be paid as damages in the event of future breach. – Penalties: designed to penalize, generally unenforceable. – CASE 16.1 B-Sharp Musical Productions, Inc. v. Haber (2010). Why was this liquidated damages, and not a penalty? Docsity.com Equitable Remedies • Rescission and Restitution. – 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. Docsity.com Equitable Remedies • Specific Performance. – Equitable remedy calling for the performance of the act promised in the contract. – Provides remedy in cases involving: • Sale of Land. CASE 16.2 Stainbrook v. Low (2006). Why was specific performance an appropriate remedy in this case? • Contracts for Personal Services. Docsity.com Equitable Remedies • 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. Docsity.com Recovery Based on Quasi Contract • When Quasi Contract is Used (cont’d). – When no contract exists. – When a contract exists but is unenforceable. – Partially performing party can recover value of services when contract is unenforceable. Docsity.com Recovery Based on Quasi Contract • Requirements of Quasi Contract. – Benefit was conferred to the other party. – Party conferring benefit reasonably expected to be paid. – The benefit was not volunteered. – Receiving benefit without paying for it would result in unjust enrichment. Docsity.com Contract Provisions Limiting Remedies • Exculpatory and Limitation of Liability clauses. • UCC Allows Sales Contracts to Limit Remedies. • Enforceability of Limitation-of-Liability Clauses: depends on type of breach excused by provision. Docsity.com
