Yile Xu – K Essay 4

The UCC governs contracts for goods and the common law governs contracts for service.
Here, sending out messages is service. Therefore, common law applies.

There was an enforceable written contract between TAMU Tech and SOS, the contract
term was from March 1 to March 15.

1. What rights, if any, does SOS have against TAMU under contract law?

Under common law, a breach need not actually occur for the responsible party to be
liable. In the case of an Anticipatory Breach, an actual breach has not yet occurred, but one of
the parties has indicated that they will not fulfill their obligations under the contract. This can
occur if the breaching party explicitly notifies the other party that they will not fulfill their
obligations.
If the promisee claims anticipatory breach, they are obliged to do everything in their
power to mitigate damages from the promisor's failure to perform. The promisee can seek
compensatory damages for the promisor's breach of contract.
Here, because of equipment failure, on March 1, TAMU notified SOS that it would be
unable to send out any of the agreed-upon messages. TAMU notified SOS that they would not
fulfill their obligation under the contract. And the promise, SOS has tried everything to find
the alternative provider to mitigate damages. The only provider with available capacity was
LBI.
Therefore, it is an Anticipatory Breach. And promisee can seek compensatory damages for
the promisor's breach of contract.

Under common law, compensatory damages cover the loss the nonbreaching party
incurred as a result of the breach of contract. General damages cover the loss directly and
necessarily incurred by the breach of contract. Consequential damages cover any loss
incurred by the breach of contract because of special circumstances or conditions that are not
ordinarily predictable.
Here, SOS spent $250 on telephone calls and faxes to get new provider. And SOS agreed
to pay LBI $12,000 for its service of distributing 20,000 messages. SOS was paying
$0.6/message. TAMU’s price was $0.5/message. Payment for any increase in the cost was
$0.1X20,000=$2,000.
Therefore, SOS has rights to recover $2,000+$250=$2,250.

2. What rights does SOS have against TAMU if TAMU failed to timely deliver because
TAMU’s president was an opponent of SOS?
Under common law, an Actual Breach of Contract refers to a breach that has already
occurred, meaning the breaching party has either refused to fulfill their obligations by the
due date or they have performed their duties incompletely or improperly.

1
 Under common law, if there is a situation that involves both contracts and purposeful or
“egregious” fraud, then punitive damages may be awarded as well. The amount of punative
damages might be contingent on the other damages awards, such as the amount of
compensatory or monetary damages.

Here, if TAMU failed to timely deliver because TAMU’s president was an opponent of SOS,
TAMU purposefully entered a fraud contract that TAMU intended to refuse to fulfill its
obligation. Here, SOS spent $250 on telephone calls and faxes to get new provider. And SOS
agreed to pay LBI $12,000 for its service of distributing 20,000 messages. SOS is no longer the
leading force in Metropolis environmental politics. Donations to SOS are down, and support
for environmental causes in Metropolis appears to be waning.

Therefore, SOS can seek $12,250 and all the loss of support for environmental causes if
TAMU failed to timely deliver because TAMU’s president was an opponent of SOS.