Expectation Damages

Pol: Non-breaching party entitled to benefit of bargain; to be situated as if no breach. (Direct and Consequential Loss of Bargain) + (Reliance Costs) – (Avoidable Costs) – (Loss Avoided from Breach). Direct – foreseeable, cause, calculable Consequential – foreseeable, cause, calculable

Cost of Comp. v. Δ in Market Val.
Cost of Completion: -Use when lower than Δ market val. OR -When performance is central to K; OR -Breach is intentional OR (pol: breacher shouldn’t determine) -Completion woudn’t req gross waste -Pol: give peeps idiosyncratic value sought Δ in Market Val. -Incidental OR unintentional AND waste -Pol: Avoid giving windfalls for “completion” of things no longer worth it

Excuse of Condition
-Forfeiture: excuse to condition enforcement of which would result in harsh deprivation or windfall -Materiality: can’t be material (ct may fudge) -Fault: SPLIT: some no fault; others only negligenc -Impact: SPLIT: some require NO impact to nonbreacher; Others balance impacts -Pol: discourage rent seeking (money for nothin’) -Wrongful Prevention: bad faith avoid/prevent condit. -Estoppel: reliance on other party saying cond. Met -Waiver: Wvr of immaterial condition by party owed -Waiver of material cond. req’s consideration

Consequential Damages
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
When Sufficient and Necessary -Sufficient: -Value of perf. not much more than cost of perf. -Court must be able to supervise/enforce easily -Cannot cause undue burden on breacher -Not for personal service contract Necessary: -$ remedy inadequate; uniqueness of perf. Limitations: -Not for service K’s unless wildly unique -Pol: no forced labor; practical concerns on enforcement; efficiency of sour grapes perf.

Fraud (5): (in factum: void; in inducement: voidable) -DF makes false statement/representation -DF knows it’s false -Made w/ intention to cause PL to enter K -It actually caused PL to enter K -PL is damaged Misrepresentation(3): [no need intent to deceive] -DF makes false statement or representation -Is material to K (rsnable person in circ. would rely) -Causation: actually caused reliance

Reliance Damages
-Covers expenditures made in reliance on K -Elements: *Reasonable AND *Immitigable -Limitations: -Value of contract: (pol: otherwise unrsnabl) -Losing K: Can be prorated by full loss or proportion of performance completed -DF must show losing K -Pol: Put injrd prty in place as K not formed

Contractually Specific Remedies
Use when (3) or (4): -Injury from breach tough to calculate -Parties meant to provide damages, not penalties -Reasonable estimate of damages @ time of K -“ “ “ “ @ time of Breach [only some cts] -Pol: -Good: better info for eff.brch.;estb. Values -Bad: doesn’t look @ changed context, cost, value

Non-Disclosure -Party made representation misleading or later learns
is false; OR -When nndsc is failure to act good faith & fair dealing -Broad: no metric, some states have affirm form. -pol: want people to invest in socially valuable information -Also when duty of expected trust and loyalty to other party; fiduciary duty (eg: lawyer)

Mitigation/Loss Avoided
-Expectation limited to reasonably unavoidable damages -reasonable: eg: employment K’s: -need not take lower status, diff field job or relocate -Check For: Extra Time/resource for othr job -Volume Loss Seller Exception -Pol: -Not a duty, just a limitation on dmg -Discourages waste of resources, -Avoids moral hazard where nonbreacher has no incentive not to pile on damages on breacher -Burden on DF to show PL could have mitig.

-Separate basis for liability, independent of K -Compensates for unjust enrichment of DF -Computation: -Market val. of performance unjustly retaind or -Amount DF is actually enriched -Limitations: -Breacher is limited to cost of contract -Minus any loss of recipient’s bargain -pol: how much is unjust to keep? -If payment is all that’s left to complete K, no restitution, must sue in K. pol - efficiency -Thus, seller can pretty much not sue on restitution.

Duress/Undue Influence
Duress(3) or (4): [Voidable; void if extreme threat] -Wrongful act of coercion (tortious/criminal/wrongf) -can be economic too -Threat leaves no reasonable alternative than K -must b severe hardship, embarrassment not enough -Causation: actually causes to enter K -Circumstances caused by DF [only some cts] -pol: want capitalization on binds that just happen, don’t want people investing in creating them Undue Influence: unfair persuasion of party under domination of party exercising persuasion -Under domination: justified in not thinking straight -Can also arise from relationship of blind trust - PL is justified in assuming best interests in mind

Anticipatory Breach

Express Conditions


Repudiation by party of K obligations= breach Pol: avoid costs of waiting around for breach -Intention to breach unequivocally communicated or shown through actions -cts req. a lot for action: ie:create imposs. -Material breach -Based on Voluntary act -Remedies: Terminate (sue for dmg); Take action in reliance; Wait around -Request for Assurance: req. reasonable cause -entitled to reasonable assurance (UCC, no assurance = breach; same as CL) -UCC: Reasonable = Industry Standards

-Event, absence of which relieves 1 or both parties of obligations under K. -Formation: language must clearly establish: causal language, only if, until, etc -otherwise court will construe as promise -Pol: avoid harshness of exp. cond. esp if cond is unrelated to dmg -If express cts. will construe as such -pol: if peeps went to trouble to make exp. must be signif., let them have it -Cntrctr Pay when paid = w/in rsnbl time

-Breach of which excuses other party from entire perf. -UNLESS: K is expressly divisible -Cure: must give breacher opportunity to cure -Determining (6): -Can injured party still obtain benefit of K -Will inj. party by compensated for breach -Breacher partially or prepared to performed? -Hardship on/Fault of breacher -Likelihood breacher will perform rest of K -Totality (3): total relief of duty for non-breacher -Material -Impact of delay -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.

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