Professional Documents
Culture Documents
Id:
A09323211
Business
Law
I
Part
Two
-‐
Essays
Question
1.a:
Specific
Performance
Question
1.b:
In
this
contract
breach
scenario,
Good
Faith
is
the
injured
party
that
is
seeking
specific
performance
from
the
defaulting
party
Kreative.
The
contract
called
for
Kreative
to
install
Duravit
sinks.
However,
Koehler
sinks
were
installed
instead.
If
this
were
a
case
involving
a
contract
for
the
sale
of
real
property,
the
courts
would
have
granted
specific
performance
out
of
Kreative.
However,
since
this
contract
called
for
a
service
to
be
performed
by
Kreative
for
Good
Faith,
a
court
of
equity
will
not
rule
in
favor
of
Good
Faith
for
a
specific
performance
remedy.
Question
1.c:
If
Good
Faith
were
to
seek
monetary
damages
as
remedies,
compensatory
damages
could
be
awarded
to
place
the
injured
party
(Good
Faith)
in
a
position
as
good
as
the
one
it
would
have
occupied
had
the
other
party
(Kreative)
performed
under
contract.
Monetary
damages
can
be
awarded
only
for
losses
that
are
foreseeable,
established
with
reasonable
certainty,
and
unavoidable.
The
amount
is
computed
as
follows:
Compensatory
Damages
=
Loss
of
Value
+
Incidental
Damages
+
Consequential
Damages
–
Loss/Cost
Avoided
by
Injured
Party
The
Loss
of
Value
=
Value
of
Promised
Performance
–
Value
of
Actual
Performance.
For
this
scenario,
the
Loss
of
Value
is
$75,000
because
this
is
the
total
amount
lost
in
market
value
of
the
building.
Incidental
damages
are
damages
that
arise
directly
out
of
the
breach.
In
this
case,
the
incidental
damages
are
the
costs
to
replace
the
sinks
in
all
of
the
condo
units
($125,000).
Consequential
damages
include
lost
profits
and
injury
to
person
or
property
resulting
from
defective
performance.
From
the
details
of
this
case,
it
can
be
inferred
that
there
were
no
consequential
damages
to
Good
Faith
($0).
Costs
avoided
include
any
loss
that
the
injured
party
(Good
Faith)
has
avoided
by
not
having
to
perform.
From
the
details
of
this
case,
it
can
be
inferred
that
there
were
no
costs
avoided
by
Good
Faith
($0).
Based
on
the
above
information,
Compensatory
Damages
Good
Faith
could
receive
=
$75,000
+
$125,000
=
$200,000
However,
since
there
is
already
a
liquidated
damages
clause
in
the
contract,
Good
Faith
would
receive
$100,000.
Question
2.d
A
tort
occurs
when
a
duty
owed
by
one
person
to
another
is
breached
and
proximately
causes
injury
or
damage
to
the
owner
of
a
legally
protected
interest.
The
law
provides
protection
against
intentional
harm
to
the
person.
Destiny
is
personably
liable
for
the
following
torts
against
Sam:
• Assault:
Sam
could
argue
that
she
felt
imminent
bodily
harm
as
Destiny
marched
towards
her.
• Battery:
Sam
could
argue
that
while
forcibly
being
escorted
to
the
office
there
was
offensive
contact
by
Destiny
• False
Imprisonment:
By
being
detained
in
an
office
for
5
hours,
Sam
could
argue
that
there
was
intentional
confinement
against
her
will.
• Defamation:
Sam
could
argue
that
when
Destiny
falsely
accused
her
of
writing
the
letter
in
front
of
everyone
in
the
cafeteria,
it
diminished
her
reputation
and
the
respect
to
which
she
was
held.
Destiny,
being
the
general
partner,
acts
as
the
agent
Good
Faith.
However,
based
on
the
facts
provided,
Good
Faith
did
not
authorize
Destiny
to
forcibly
detain
Sam
and
was
not
negligent
or
reckless
in
failing
to
prevent
the
above
torts
(i.e., b/c it knew
that Destiny was prone to violence).
Good
Faith
is
not
liable
for
any
of
the
torts.
If
Good
Faith
were
found
liable
for
any
of
the
torts,
the
limited
partners
would
be
liable
only
up
to
the
value
of
the
assets
that
they
put
into
the
company.
The
General
Partner
would
be
liable
for
any
short-‐fall
in
damages
owed.
Question
2.e
Krazy
is
an
employee
agent
of
the
principal
Kreative.
This
relationship
is
a
consensual
agency
relationship
in
which
the
agent
acts
as
a
representative
or
on
behalf
of
the
principal
with
power
to
affect
the
legal
rights
and
duties
of
the
principal.
An
employee
is
an
agent
whose
principal
controls
or
has
the
right
to
control
the
manner
and
means
of
the
agent’s
performance
of
work.
In
addition,
Sam
is
an
employee
agent
of
the
principal
Good
Faith.
The
fake
letter
was
written
by
Krazy
in
order
to
imply
that
Sam
had
actual
authority
to
change
the
terms
of
the
contract
for
Good
Faith.
In
this
contract
between
Kreative
and
Good
Faith,
Krazy
was
acting
as
an
agent
with
actual
authority
to
install
the
sinks
on
behalf
of
the
disclosed
principal
Kreative.
Krazy
was
negligent
and
did
commit
fraud
when
he
wrote
the
fake
letter
from
Sam.
However,
it
was
not
foreseeable
that
this
would
cause
the
harms
by
Destiny
against
Sam.
Therefore,
neither
Krazy
nor
Kreative
would
be
found
liable
for
the
harm
caused.
If
for
some
reason,
Krazy
was
deemed
personally
liable,
Kreative
would
not
need
to
indemnify
Krazy
because
he
did
not
act
within
the
scope
of
his
actual
authority.
Question
3.f
Good
Faith
is
a
limited
partnership
in
which
Destiny
is
the
general
partner
who
manages
the
company
and
Hope
and
Faith
are
limited
partners.
As
a
general
partner,
Destiny
has
unlimited
liability
for
the
partnership’s
debts
while
limited
partners
have
limited
liability
for
the
partnership’s
debts.
Each
of
the
partners
owes
the
following
duties
to
one
another:
Duty
of
loyalty,
duty
of
obedience,
duty
of
care,
duty
to
inform,
and
duty
to
account
to
the
partnership.
In
this
scenario,
it
can
be
implied
that
Faith
is
also
a
general
partner
since
her
name
is
part
of
the
legal
name
of
the
entity.
It
can
also
be
implied
by
Hope’s
conduct
in
making
management
decisions,
that
she
too
is
a
general
partner.
As
a
result
of
this,
all
3
partners
are
equally
liable
for
the
$500,000
debt
owed
to
Benevolent
Bank.