You are on page 1of 2

Expectation Damages Cost of Comp. v. Δ in Market Val.

Excuse of Condition
Pol: Non-breaching party entitled to benefit of Cost of Completion: -Forfeiture: excuse to condition enforcement of which
bargain; to be situated as if no breach. -Use when lower than Δ market val. OR would result in harsh deprivation or windfall
-When performance is central to K; OR -Materiality: can’t be material (ct may fudge)
(Direct and Consequential Loss of Bargain) + -Breach is intentional OR -Fault: SPLIT: some no fault; others only negligenc
(Reliance Costs) – (Avoidable Costs) – (Loss (pol: breacher shouldn’t determine) -Impact: SPLIT: some require NO impact to non-
Avoided from Breach). -Completion woudn’t req gross waste breacher; Others balance impacts
-Pol: give peeps idiosyncratic value sought -Pol: discourage rent seeking (money for nothin’)
Direct – foreseeable, cause, calculable Δ in Market Val. -Wrongful Prevention: bad faith avoid/prevent condit.
Consequential – foreseeable, cause, calculable -Incidental OR unintentional AND waste -Estoppel: reliance on other party saying cond. Met
-Pol: Avoid giving windfalls for “completion” -Waiver: Wvr of immaterial condition by party owed
Consequential Damages of things no longer worth it -Waiver of material cond. req’s consideration
Foreseeable – w/in reasonable contemplation
of both parties, @time of K
-Pol: Limitation allows for efficient breach,
-want peeps to breach if cost of
performance is higher than expected
benefit to both parties
-Criticism: Eff.Brch doesn’t see non-econ
factors; imperfect info; marginal cost of
breach may subsume savings
Causation – Proximate
Calculation – must be reasonably calculable
-New Business Exception

Specific Performance Fraud/Misrepresentation


When Sufficient and Necessary Fraud (5): (in factum: void; in inducement: voidable)
-Sufficient: -DF makes false statement/representation
-Value of perf. not much more than cost of perf. -DF knows it’s false
-Court must be able to supervise/enforce easily -Made w/ intention to cause PL to enter K
-Cannot cause undue burden on breacher -It actually caused PL to enter K
-Not for personal service contract -PL is damaged
Necessary: Misrepresentation(3): [no need intent to deceive]
-$ remedy inadequate; uniqueness of perf. -DF makes false statement or representation
Limitations: -Is material to K (rsnable person in circ. would rely)
-Not for service K’s unless wildly unique -Causation: actually caused reliance
-Pol: no forced labor; practical concerns on
enforcement; efficiency of sour grapes perf.
Reliance Damages Contractually Specific Remedies Non-Disclosure
-Covers expenditures made in reliance on K Use when (3) or (4): -Party made representation misleading or later learns
-Elements: *Reasonable AND *Immitigable -Injury from breach tough to calculate is false; OR
-Limitations: -Parties meant to provide damages, not penalties -When nndsc is failure to act good faith & fair dealing
-Value of contract: (pol: otherwise unrsnabl) -Reasonable estimate of damages @ time of K -Broad: no metric, some states have affirm form.
-Losing K: Can be prorated by full loss or -“ “ “ “ @ time of Breach [only some cts] -pol: want people to invest in socially valuable
proportion of performance completed -Pol: information
-DF must show losing K -Good: better info for eff.brch.;estb. Values -Also when duty of expected trust and loyalty to other
-Pol: Put injrd prty in place as K not formed -Bad: doesn’t look @ changed context, cost, party; fiduciary duty (eg: lawyer)
value
Mitigation/Loss Avoided Restitution Duress/Undue Influence
-Expectation limited to reasonably -Separate basis for liability, independent of K Duress(3) or (4): [Voidable; void if extreme threat]
unavoidable damages -Compensates for unjust enrichment of DF -Wrongful act of coercion (tortious/criminal/wrongf)
-reasonable: eg: employment K’s: -Computation: -can be economic too
-need not take lower status, diff field job -Market val. of performance unjustly retaind or -Threat leaves no reasonable alternative than K
or relocate -Amount DF is actually enriched -must b severe hardship, embarrassment not enough
-Check For: Extra Time/resource for othr job -Limitations: -Causation: actually causes to enter K
-Volume Loss Seller Exception -Breacher is limited to cost of contract -Circumstances caused by DF [only some cts]
-Pol: -Not a duty, just a limitation on dmg -Minus any loss of recipient’s bargain -pol: want capitalization on binds that just happen,
-Discourages waste of resources, -pol: how much is unjust to keep? don’t want people investing in creating them
-Avoids moral hazard where non- -If payment is all that’s left to complete K, no Undue Influence: unfair persuasion of party under
breacher has no incentive not to pile on restitution, must sue in K. pol - efficiency domination of party exercising persuasion
damages on breacher -Thus, seller can pretty much not sue on -Under domination: justified in not thinking straight
-Burden on DF to show PL could have mitig. restitution. -Can also arise from relationship of blind trust
- PL is justified in assuming best interests in mind
Anticipatory Breach Express Conditions Materiality
Repudiation by party of K obligations= breach -Event, absence of which relieves 1 or both -Breach of which excuses other party from entire perf.
Pol: avoid costs of waiting around for breach parties of obligations under K. -UNLESS: K is expressly divisible
-Intention to breach unequivocally -Formation: language must clearly -Cure: must give breacher opportunity to cure
communicated or shown through actions -Determining (6):
establish: causal language, only if, until, etc
-cts req. a lot for action: ie:create imposs. -Can injured party still obtain benefit of K
-Material breach
-otherwise court will construe as promise -Will inj. party by compensated for breach
-Based on Voluntary act -Pol: avoid harshness of exp. cond. esp -Breacher partially or prepared to performed?
-Remedies: Terminate (sue for dmg); Take if cond is unrelated to dmg -Hardship on/Fault of breacher
action in reliance; Wait around -If express cts. will construe as such -Likelihood breacher will perform rest of K
-Request for Assurance: req. reasonable cause -pol: if peeps went to trouble to make exp. -Totality (3): total relief of duty for non-breacher
-entitled to reasonable assurance must be signif., let them have it -Material
(UCC, no assurance = breach; same as CL) -Cntrctr Pay when paid = w/in rsnbl time -Impact of delay
-UCC: Reasonable = Industry Standards -Opportunity given to cure?
Pol: cts often don’t want to force continuation
-Perfect Tender: UCC: May reject goods in any
deviation from contract; accept rules though
-buyer must give right to cure if seller wouldn’t
know significance of diff.

You might also like