Download Business Law: Understanding Contract Remedies and Their Consequences and more Slides Commercial Law in PDF only on Docsity! Business Law Chapter 11: Contract Remedies Docsity.com Introduction to Remedies for Breach of Contract • The right to enter into a contract carries with it an inherent right to sue for breach of that contract. Docsity.com The Contract Provides a Framework for Remedies • Contracts may provide language specifically authorizing certain types of actions for breach, or they may have language that limits the parties’ options. Docsity.com Mutual Remedies • There is no requirement that the parties enjoy identical remedies under a contract. Docsity.com The Necessity of Damages • The law is clear that any breach of a contract, no matter how slight, is actionable. • A minor breach, under most circumstances, would not justify the costs of bringing suit. Docsity.com Jurisdiction • Jurisdiction: The persons about whom and the subject matters about which a court has the right and power to make decisions that are legally binding. Docsity.com “Clean Hands” • This ancient doctrine of equity law requires that before a plaintiff can ask a court for an order sanctioning the other party, the plaintiff must show that he did not do anything wrong. Docsity.com The U.S. System: Legal and Equitable Jurisdiction Together • In the United States, a plaintiff is entitled to request that the court use both forms of jurisdiction in a single case. Docsity.com Specific performance • Specific performance is a court order that requires a party to do that which he has already agreed to do in the contract. Docsity.com Reformation • When a party requests reformation, what the party is actually requesting is that the contract itself be changed to reflect the true intention of the parties. Docsity.com Rescission • Rescission is an action that cancels or voids the contract and places the parties back in the positions they were in prior to the creation of the contract. Docsity.com Quantum valebant • This term means, “as much as it is worth.” • It arises in situations where goods are sold and the parties have not specified the sale price of the goods. Docsity.com Monetary Damages • Damages refer to the monetary, property, or personal losses suffered by the plaintiff. Docsity.com Compensatory Damages • Compensatory damages are designed to restore the plaintiff to his or her original condition, or to reimburse the plaintiff for her expenses. Docsity.com Rule Number One: Damages Must Be Foreseeable • When assessing an award, the damages must be both reasonable and foreseeable as a direct consequence of breach of contract. Docsity.com Rule Number Two: Damages Follow a Breach • The parties understand that an award of damages is possible, should they breach the contract. Docsity.com Rule Number Three: Damages Are Specific • Usually, a court will require a “reasonable degree of certainty” in the final award of damages. Docsity.com Punitive Damages • Punitive damages are rare in contract cases. • An award of punitive damages is the jury’s way of punishing the defendant for some action. Docsity.com Nominal Damages • Nominal damages refer to an award of a small or token amount to a plaintiff. Docsity.com Consequential Damages • Consequential damages are different from compensatory damages in that the final award amount contains not only the amount that would have been obtained under the contract, but also losses tied to a particular contract breach. Docsity.com Liquidated Damages under the UCC • Under the UCC, any agreement between the parties that acts as a liquidated damages provision will be enforced if: Docsity.com 1. The stipulated amount is reasonable in relation to the actual damages incurred. 2. Proving damages without the clause is difficult. 3. The plaintiff would have no other remedy without such a provision. Docsity.com Rights Under Bankruptcy • Does a contract still apply when one party has filed bankruptcy? • No. Docsity.com
