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Contractual Remedy
(discharge,damage,
Equitable relief) (1.Damage 2…
Contractual Remedy
(discharge,damage,
Equitable relief)
1.Damage 1
- $ payable after
wrongdoing
- Generally no entitlement
to receive performance
Expectation damage
- Plaintiff receive the value of expected bnf, but not performance
- = expected (rem.) bnf (market value) - expected (rem.) cost to perform obl
- If bnf < cost (ptf did not expect to earn profit) it cannot recover expectation dmg)
- is forward-looking damage
- Calculate at K date of performance (e.g agreed day of delivery)
- Awarded even if calculation is imprecise (lost chance in beauty contest; Not awarded if calculation is totally speculative (treasure in sunken ship)
- 6 problems :
Cost of cure or Loss of value
- Hard to decide exactly what plaintiff expect to receive from defendant: cost of cure (cost of service) or Loss of value (value of end product of that service)
- Cost of cure: award if legitimate reason for wanting benefit (e.g cost to level land)
- Lost of value: if unreasonable discrepancy between the 2 (e.g market value of leveled land)
Alternative performance
- K allow defendant to perform in various ways (e.g employer terminate employment)
- Damage calculated on the basis of the least onerous option
Emotional Distress (Intangible Loss)
- Loss that does not have any apparent economic value (sadness, anger)
- Damage available if: K was of a type that was created to provide peace of mind (e.g insurance K); the defendant should have known of risk
Remoteness
- A loss is remote if it would be unfair to hold defendant legally responsible for it
- Cannot get compensation for all losses from breach: lost must be caused by breach, lost must not be legally remote from breach
- A loss is NOT remote if defendant, at the time K was created, should have know or actually did know that loss might occur if K was breached.
Mitigation of damage
- Ptf is encouraged to minimize losses
- Ptf only responsible for taking reasonable steps to minimize the loss, ptf entitled to expense incurred in mitigation
- Ptf cannot recover damage for loss that it unreasonably fail to mitigate
1.Damage 2
Account of profits
- Deal with dfd wrongful gains
- Dfd return to as if breach never occurred - no profit
- Account only if legitimate reason to deprive dfd of profit
Nominal damage
- If a breach of K did not result in any loss to ptf or any gain to dfd, court may award nominal damages (small amounts)
Liquidated damage
- Represent a genuine attempt to estimate the value of the loss that may occur from breach (clause in agreement)
- Ptf can recover only the liquidated damage regardless of how much the actual loss is
- Must be distinguished from penalties (which require a pt to pay exorbitant amount if it breach K). NOT genuine attempt to estimate the loss. Court do not enforce penalty (calculate damage without penalty)
Punitive damage
- To punish dfd and discourage other ppl from behaving badly
- Ptf can recover compensatory damage (expectation or reliance) and punitive damage
- 2 requirements:
- Dfd act in harsh, vindictive, reprehensible or malicious manner
- Dfd must commit another independently actionable wrong
Reliance damage
- Represent the monetary value of expense and opportunities that ptf wasted under K
- Look backward to undo the effect of K
- Ptf cannot use reliance damage to avoid a loss that would have occurred if K had been performed ( reliance dmg = cost of resource [e.g down pmt] - loss due to bad bargain)
2.Equitable Relief
Specific performance
- Court order dfd to actually do what they promised
- Req: monetary dmg inadequate: cannot buy substitute (e.g unique land); mutuality: available to both pts
- Not available if:
- Ptf does not have clean hand
- Subject matter is not unique
- Specific p would ham an innocent 3rd pt ..........................
- Subject matter is personal service
- SP would require court supervision
Injunction
- Court order dfd to NOT do sth that is prohibited by K
- Awarded only if monetary dmg would provide an inadequate remedy
- Inj will not be granted if it compel dfd to choose between working for the ptf and not working at all
Exclusion clause
- To exclude or limit lia for breach of K
- Clause shud be unambiguous, read narrowly against drafter
- Pt must provide reasonable notice of its exclusion clause
- Must prove other pt agreed to exclusion clause
- Will not apply to a fundamental breach
Unjust enrichment
- Available only if K is void, voidable, unenforceable or discharged by breach
- Remedy: Restitution (dfd must give back the value of transferred bnf (not actual transferred bnf) they receive from ptf)
- 3 req to claim Restitution:
- An enrichment to dfd (receive bnf from ptf - true market value)
- A corresponding deprivation to ptf (ptf supplied its service: suffer a cor dep of incurred cost - received pmt))
- The absence of juristic reason for dfd enrichment (dfd not willing to perform its obl)
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