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Remedies For Breach of Traditional and Online Contracts Remedies For Breach of Traditional and Online Contracts
Remedies For Breach of Traditional and Online Contracts Remedies For Breach of Traditional and Online Contracts
by Henry R. Cheeseman
a contractual duty has not been discharged or excused, the contracting party owes an absolute duty (covenant) to perform the duty. of contract If a contracting party fails to perform an absolute duty owed under a contract.
Breach
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Types of Performance
Complete Performance Substantial Performance
Inferior Performance
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Legal Consequence
The contract is discharged. The non-breaching party may recover damages caused by the breach. The non-breaching party may either: (1) Rescind the contract and recover restitution, or (2) Affirm the contract and recover damages.
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Anticipatory Breach
A
breach that occurs when one contracting party informs the other that he or she will not perform his or her contractual duties when due.
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Monetary Damages
A
non-breaching party may recover monetary damages from a breaching party. damages are available whether the breach was minor or material.
Monetary
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Nominal Damages
Liquidated Damages
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Compensatory Damages
Award
of money intended to compensate a non-breaching party for the loss of the bargain. They place the non-breaching party in the same position as if the contract had been fully performed by restoring the benefit of the bargain.
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Compensatory Damages
(continued)
The
Special
types of contracts:
Consequential Damages
Foreseeable
damages that arise from circumstances outside the contract. To be liable for these damages,
The breaching party must know or have reason to know that the breach will cause special damages to the other party.
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Liquidated Damages
Damages
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Liquidated Damages
(continued)
Many
businesses include liquidated damages in their commercial contracts, which help to:
Provide certainty, Avoid lawsuits, and Provide an incentive to enter into contracts.
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Nominal Damages
Damages
awarded when the non-breaching party sues the breaching party even though no financial loss has resulted from the breach. Usually awarded in a small amount such as $1. Cases involving nominal damages are usually brought on principle.
Copyright 2004 by Prentice-Hall. All rights reserved. 16 - 13
Mitigation of Damages
A
non-breaching party is under a legal duty to avoid or reduce damages caused by a breach of contract. extent of mitigation depends on the type contract involved.
The
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Enforcement of Remedies
If
the breaching party refuses to pay the court ordered judgment, the court may issue:
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possession of the possession of the breaching party that he breaching party that he or she owns, and or she owns, and To sell the property at To sell the property at auction to satisfy the auction to satisfy the judgment. judgment.
accounts, or other accounts, or other property of the property of the breaching party that is breaching party that is in the hands of third in the hands of third parties be paid over to parties be paid over to the non-breaching the non-breaching party to satisfy the party to satisfy the judgment. judgment.
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contract contract Fraud Fraud Undue influence Undue influence Mistake Mistake
Restitution Restitution Returning of goods or Returning of goods or property received from property received from the other party to the other party to rescind a contract. rescind a contract. If the actual goods or If the actual goods or property is not property is not available, a cash available, a cash equivalent must be equivalent must be made. made.
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Equitable Remedies
Equitable
remedies are available if there has been a breach of contract that cannot be adequately compensated by a legal remedy. are also available to prevent unjust enrichment.
They
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Specific Performance Court orders the breaching party to perform the acts promised in the contract. The subject matter of the contract must be unique. Reformation Court rewrites a contract to express the parties true intentions. Usually used to correct clerical errors.
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Injunction
Relations
Breach
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tort that arises when a third party induces a contracting party to breach the contract with another party. The following elements must be shown:
A valid, enforceable contract between the contracting parties. Third-party knowledge of this contract. Third-party inducement to breach the contract.
this covenant:
The parties to a contract are held to the express terms of the contract, and They are also required to act in good faith and deal fairly in all respects in obtaining the contract.
A
breach of this implied covenant is a tort for which tort damages are recoverable.
Copyright 2004 by Prentice-Hall. All rights reserved. 16 - 23
Punitive Damages
Damages
Punish the defendant Deter the defendant from similar conduct in the future Set an example for others
Generally,
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