Introduction and Damages - Business Law - Lecture Slides, Slides of Commercial Law

Download Introduction and Damages - Business Law - Lecture Slides and more Slides Commercial Law in PDF only on Docsity! Introduction  General information  Sources of contract Law  Common Law  Case Law  Restatement  Statutory Law  UCC – Articles 2 & 2A; other provisions  Other statutes  Case law Docsity.com Contract Remedies  Why do we enforce contracts?  Expectations and planning  Commercial and historical context  What is the goal of enforcement? Affect behavior or protect expectations?  Efficient breach  Benefit of the bargain  Compare to tort Docsity.com Expectation Damages  Restatement (Second) of Contracts 347 – expectation is measured by –  Loss in value of other party’s performance  + any other loss  - cost or loss avoided Docsity.com Expectation damage elements?  Cost of operation?  Pain and suffering? (additional?)  Embarrassment?  Worsening of condition?  Failure to improve?  Total difference in value? Docsity.com Expectation elements  Loss in value  + Other loss  - Cost/loss avoided  Value of expected improvement  Worsening of condition  Additional costs  Additional pain & suffering  Dr. fee (if not pd.) Docsity.com Peevyhouse v. Garland Coal Garland Coal D Peevyhouses Ps Strip-mine, pay, restore Coal, access What went wrong?? What are damages? Trial court: $5,000 What is issue on appeal? Docsity.com How to measure expectation  What is the loss in value? Possibilities for measurement – Cost to repair -- $29,000/$25,000 Diminution in value -- $300 Which one is expectation??? Which one does the court choose? Docsity.com Rationale  Incidental to contract  Construction contract comparison  Cost disproportionate to value  Economic waste argument  Right to do what want with own property  Effect of willfulness, public policy  What went wrong here??? Docsity.com Useful Life Theory  What is it???  Idea that damages should be prorated to account for the useful life of the subject matter already enjoyed by the plaintiff.  Why not appropriate here?  Not clear that added to useful life  Need to deduct for “not-so-useful” life  Complexity – avoid under-compensation Docsity.com Cost to repair when repair is too costly –  Use actual cost to repair if reasonable and in good faith  If repair is an upgrade:  Give cost to repair for same quality – Plaintiff pays for upgrade  May get entire amount if  No other options available  Upgrade of no real benefit to plaintiff Docsity.com Problem 66 Helen’s Troy $24,000 Build horse Helen’s cost = $20,000 Troy fires Helen – Helen has spent $15,000 Troy has paid her $ 5,000 Salvage value $ 2,000 What are Helen’s expectation damages? Docsity.com Reliance Damages  An alternative to expectation damages  Based on “reliance interest,” including  Expenditures  Made in preparation for performance or  In performance,  Less any loss the party in breach can prove with reasonable certainty. (R2K 349) Docsity.com Sullivan v. O’Connor D surgery P Dr. O’Connor Sullivan pay What was the result of the surgery? What was the cause of action? Who prevailed? What are the possible ways to measure damages? Docsity.com Purposes of Remedies (R2K 344) Interests protected:  Expectation Interest  Benefit of the bargain – position the plaintiff would have been in if K had been performed  Reliance Interest  Reimbursement for losses caused by reliance on the K  Restitution Interest  Restoration of benefits conferred on the other party. Docsity.com Sullivan damages Expectation Reliance Restitution Nose promised - Nose had X Nose had - Nose have X X 1st and 2nd operations X 3rd operation ($, P & S) X X Dr. fee X Docsity.com Sullivan damages Expectation Reliance Restitution Nose promised - Nose had X Nose had - Nose have X X 1st and 2nd operations X 3rd operation ($, P & S) X X Dr. fee X X Docsity.com Anglia Television v. Reed D star P Reed Anglia Television pay Did Reed breach the contract? What are the damages? What is the damage measure? Why??? Docsity.com