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38 Cards in this Set

  • Front
  • Back
Claim for damages of total breach has ____ elements
The elements of a claim for damages for total breach are:
1. Loss in value
2. Other loss
3. Cost avoided
4. Loss avoided
Loss of value
the caused the injured party a loss by depriving the party, at least to some extent, of the value to the injured party of the performance that should have been recieved and the value to that party of what, if anything, actualy was received
Other Loss
the breach may cause the injured party loss other than loss in value, and the party is also entitled to recovery for this,
What limitations is "other loss" subject to?
What type of damages does "other loss" give rise to?
incidental and consequential
Incidental damages
additional costs incurred after the breach in a reasonable attempt to avoid loss
Does the attempt to avoid loss have to be successful?
Conseqential damages
injury to person or property caused by the breach
What is the general principle for loss recovery?
That ALL loss, however characterized, is recoverable.
Does the breach have to be "total" to claim incidental and consequential damages?
No, "other loss" applies regardless of whether or not the injured party chooses to treat the breach as total. It applies for both total and partial breaches.
Cost Avoided
the injured party terminates and claims damages for total breach, the breach has a beneficial effect on that party saving it the further expenditure that would otherwise have been incurred.
Can "cost avoided" be claimed for a partial breach?
No, only useful for TOTAL breach.
Loss Avoided
the injured party claims damages for total breach, and the breach has a further beneficial effect on that party by allowing it to avoid some loss by salvaging and reallocating some or all of the resources that otherwise it would have had to devote to performance of the K.
Example of loss avoided
the injured party is a builder that, after stopping work after terminating a construction K, uses some of the leftover material to on another K.

If an injured party is an employee who, after being wrongfully discharged by an employer, takes other employment, the "loss avoided" is the net amt that has been earned or will be earned for that employment
What is an example of where "loss avoided" will be based on the actual favorable arguments?
if the injured party happens to make especially favorable arrangements to dispose of leftover materials, and thereby avoids more loss that another person might have succeeded in doing.
Which 2 of the 4 elements for a claim of damages for breach are ADVERSE to the INJURED party and therefore INCREASE damages?
loss in value and other loss
Which 2 of the 4 elemets for a claim of damages for breach are BENEFICIAL to the INJURED party and therefore DECREASE the party's damages?
cost avoided and loss avoided
What is formula Farnsworth's formula for a TOTAL breach?
general measure = loss in value + other loss - cost avoided - loss avoided
What is Farnsworth's formula for a PARTIAL brach?
general measure = loss in value + other loss
Rest 2d sec. 346(a) does NOT MEAN that beacause of an assumption of breach.....
that the court necessarily will or should be indifferent to the cause of the nonperformance
Rest 2d sec. 346(a) DOES MEAN that because of an assumption of breach....
that the party agrieved by that non-performance will ordinary be entitled to some remedey, EVEN if only "NOMINAL DAMAGES"
What is the important question in the majority of cases arising out of breach of K?
the WAY in which damages are to be COMPUTED
The 3 principal purposes which may be pursued in awarding K damages are:
1. Restituion Interest
2. Reliance Interest
3. Expectaion Interest
Restitution Interest
The interest protected when P has in reliance on the promise of D conferred some value on D. D fails to perform his promise. The court forces the D to disgorge the value he received from P.
What is the object of Restitution Interest?
The prevention of gain by the defaulting promisor at the expense of the promisee....the prevention of unjust enrichment.
Is it important to note how a suit is calssified, i.e. as contractual v. quasi- contractual, or suit to enforce K v. suit based on rescision of K?
NO, this is IMMATERIAL, these questions relate to the superstrx of the law, not to the basic policies with which we are concerned.
Reliance Interest
The interest protected when P has in reliance on teh promise of D changed his position.
What is the object of Reliance Interest?
To put the P in as good a position as he was in before the promise was made.
Expectation Interest
The interest protected when without insisting on reliance by the promisor, may seek to give the promisee the value of the expectancy which the promise created.
What is the object of Expectation Interest?
To put the P in as good a position as he would have been had D performed his promise.
Which of the 3 interests presents the strongest case for relief? Why?
Restitution Interest b/c it involves a combo of unjust impoverishment w/unjust gain

If, like Aristotle, we regard the purpose of justice as the maintenance of and equilibrium of goods among members of society, the restitution interest presents 2x as strong a claim to judicial intervention as the reliance interest, since if A not only causes B to lose one unit but appropriates that unit to himself, the resulting discrepancy between A and B is not 1 unit but 2.
Who developed the 3 interests that are considered the "modern" approach to K remedies?
Lon Fuller and William Purdue
What is the expectation that the court seeks to protect in its award of K damages?
It has long been the policy for the court to attempt to compute and award damages so as to give the P his expectation he would have realized if K btwn P and D had been fully performed - the "BENEFIT OF THE BARGAIN"
What rule serves as the stated norm in K damages?
Expectation Damages
In which Restatement is the Farnsworth formula incorporated? What is the formula used for?
Rest 2d sec. 347

To calculate damages based on the injury to P's expectation interest.
What questions are asked in attempting to determine a general measure of damages?
1) How are the injured party's expectations to be measured in terms of $?

2) What sum will put the injured party in as good a position as if the K had been performed?
What do "answers to expectation measured in $" and "P's position as if the K had been performed" in order to calculate damages depend on?
Whether the injured party has terminated the K, refused to render any further performance, and is claiming damages for total breach


Has not terminated, stands ready to perform to render any remaining return performance, and is claiming damages for partial breach.