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55 Cards in this Set

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Subject to the lmitations in §§350-353, the injured party has a right to damages based on is expectation interest as measured by
(a) the loss in value to him of the other party’s performance caused by its failure or deficiency plus
(b) any other loss, including incidental or consequential loss, caused by the breach, less
(c) any cost or other loss that he has avoided by ot having to perform
Measure of Damages in General
(1) The injured party has a right to damages for any breach by a party against whom the contract is enforceable unless the claim for damages has been suspended or discharged
(2) If the breach caused no loss or if the amount of the loss is not proved under the rules stated in this Chapter, a small sum fixed without regard to the amount loss will be awarded as nominal damages.
Availability of Damages
The judicial remedies available for the protection of the interests stated in §344 include a judgment or order
(a) awarding a sum of money due under the contract or as damages
(b) requiring specific performance of a contract or enjoining its non performance,
(c) requiring restoration of a specific thing to prevent unjust enrichment
(d) awarding a sum of money to prevent unjust enrichment
(e) declaring the rights of the parties, and
(f) enforcing an arbitration award.
Remedies avialable
Judicial Remedies under the rules stated in this Restatement serve to protect one or more of the following interests of a promise:
(a) his “expectation interest,” which is his interest in having the benefit of his bargain by being put in as good position as he would have been in had the contract been performed
(b) his “reliance interest” which is his interest in being reimbursed for loss caused by reliance on the contract by being put in as good a position as he would have been in had the contract not been made, or
(c) his “restitution interest,” which is his interest in having restored to him any benefit that he has conferred on the other party.
purpose of remedies
1. except as stated in subsection(2) a promise to perform all or part of a conditional duty under an antecedent contract in spite of the non-occurrence of the condition is binding, whether the promise is made before or after the time for the condition to occur, unless
a. occurrence of the condition was a material part of the agreed exchange for the performance of the duty and the promisee was under no duty that it occur; or
b. uncertainty of the occurrence of the condition was an element of the risk assumed by the promisor
2.If such a promise is made before the time for the occurrence of the condition has expired and the condition is within the control of the promisee or a beneficiary, the promisor can make his duty again subject to the condition by notifying the promisee or beneficiary of his intention to do so.
a. the notification is received while there is still a reasonable time to cause the condition to occur under the antecedent terms or an extension given by the promisor; and
b. reinstatement of the requirement of the condition is not unjust because of a material change of position by the promisee or beneficiary; and
c. the promise is not binding apart from the rule stated in subsection 1.
Promise to perform a duty in spite of non-occurence of a condition
An express promise to pay all or part of an indebtedness of the promisor discharged or dischargeable in bankruptcy proceedings begun before the promise is made is binding.
Promise to Pay indebtness discharged in bankruptcy
(1) If a breach delays the use of property and the loss in value to the injured party is not proved with reasonable certainty, he may recover damages based on the rental value of the property or on interest on the value of the property
(2) If a breach results in defective or unfinished construction and the loss in value to the injured party is not proved with sufficient certainty, he may recover damages based on.
a. The diminution in the market price of the property caused by the breach or
b. The reasonable cost of completing performance or of remedying the defects if that cost is not clearly disproportionate to the probable loss in value to him
(3) If a breach is of a promise conditioned on a fortuitous event and it is uncertain whether the even would have occurred had there been no breach, the injured party may recover damages based on the value of the conditional right at the time of the breach.
Alternative to loss in value of performance
As an alternative to the measure of damages stated in §347, the injured party has a right to damages based on his reliance interest, including expenditures made in preparation for performance or in performance, less any loss that the party in breach can prove with reasonable certainty the injured party would have suffered had the contract been formed.

-may use this when he cannot prove his profit with reasonable certainty
-or when he would have had a loss rather than a profit under the contract
Damages bsed on reliance interest
(1) Except as stated in Subsection (2), damages are not recoverable for loss that the injured party could have avoided without undue risk, burden or humiliation
(2) The injured party is not precluded from recovery by the rule stated in Subsection (1) to the extent that he has made reasonable but unsuccessful efforts to avoid loss.
Avoidability as a limitation on damages
(1) Damages are not recoverable for loss that the party in breach did not have reason to foresee as a probable result of the breach when the contract was made
(2) Loss may be foreseeable as a probable result of a breach because it follows from the breach
1. in the ordinary course of events, or
2. as a result of special circumstances, beyond the ordinary course of events, that the party in breach had reason to know
(3) A court may limit damages for foreseeable loss by excluding recovery for loss of profits, by allowing recovery only for loss incurred in reliance, or otherwise if it concludes that in the circumstances justice so requires in order to avoid disproportionate compensation. (if the amount of the damages are grossly disproportionate and the absence of the expressed portion of the risk and it’s a noncommercial context courts will often say that it is unforeseeable, which means unjust)
unforeseeability/related limitations on damages
Damages are not recoverable for loss beyond an amount that the evidence permits to be established with reasonable certainty
Uncertainty as a limitation on damages
punitive damages are not recoverable for a breach of contract unless there is a tort where such is recoverable
punitive damages
1) Damages for breach by either party may be liquidated in the agreement but only at an amount that is reasonable in the light of the anticipated or actual loss caused by the breach and the difficulties of proof of loss. A term fixing unreasonable large liquidated damages is unenforceable on grounds of public policy as a penalty.
2) A term in a bond providing for an amount of money as a penalty for non-occurrence of the condition of the bond is unenforceable on grounds of public policy to the extent that the amount exceeds the loss caused by such non-occurrence
liquidated damages and penalties
A party is entitled to restitution under the rules stated in this Restatement only to the extend that he has conferred a benefit on the other party by way of past performance or reliance
Requirement that benefit be conferred
If a sum of money is awarded to protect a party’s restitution interest, it may as justice requires be measured by either
A. the reasonable value to the other party of what he received in terms of what it would have cost him to obtain it from a person in the claimant’s position, or
B. the extent to which the other party’s property has increased in value of his other interests advanced.
measure of restitution interest
1) specific restitution will be granted to a party who is entitled to restitution except that;
a. specific restitution based on a breach by the other party under the rule stated in §373 may be refused in discretion of the court if it would unduly interfere with the certainty of title to land or otherwise cause injustice and
b. specific restitution in favor of the party in breach under the rule stated in §374 will not be granted

2) A decree of specific restitution may be made condtional on return of or compensation for anything that the party claiming restitution has received.
3) In specific restitution, with or without a sum of money, will be substantially as effective as restitution in money in putting the party claiming restitution in the position he was in before rendering any performance, the other party can discharge his duty by tendering such restitution before suit is brought and keeping his tender good.
specific restitution
(1) subject to the rules stated in §§359-69, specific performance of a contract duty will be granted in the discretion of the court against a party who has committed or is threatening to commit a breach of the duty
(2) Subject to the rules stated in §§359-69, an injunction against breach of contract duty will be granted in the discretion of the court against a party who has committed or is threatening to commit a breach of the duty if
a. The duty is one of forbearance, or
b. The duty is one to act and specific performance wuld be denied only for reasons that are inapplicable to an injunction
availability of specific performance and injunction
(1) specific performance or an injunction will not be ordered if damges would be adequate to protect the expectation of the injured party
(2) the adequacy of the damage remedy for failure to render on part of the performance due does not preclude specific performance or injunction as to the contract as a whole
(3) specific performance or an injunction will not be refused merely because there is a remedy for breach other than damages, but such a remedy may be considered in exercising discretion under the rule stated in §357
Effect of adequacy of Damages
1. a promise to pay all or part of an antecedent contractual or quasi-contractual indebtedness owed by the promisor is binding if the indebtedness is still enforceable or would be except of a statute of limitations
2. the following facts operate as such a promise or unless other facts indicate a different intention
a. a voluntary acknowledgment to the obligee admitting the present existence of the antecedent indebtedness; or
b. a voluntary transfer of money, a negotiable instrument, or other thing by the obligor to the oblige, made as interest on or part payment of or collateral security for the antecedent indebtedness; or
c. a statement to the oblige that the statute of limitations will not be pleaded as defense
promise to pay indebtedness;effect on statute of limitations
If the requirement of consideration is met, there is no additional requirement of
(a) a gain, advantage, or benefit to the promisor or a loss, disadvantage, or detriment to the promise; or
(b) equivalence in the values exchanged; or
(c) “mutuality of obligation”
Adequacy of consideration mutuality of obligation
A promise or apparent promise is not consideration if by its terms the promisor or purported promisor reserves a choice of alternative performances unless
(a) each of the alternative performances would have been consideration if it alone had been bargained for; or
(b) one of the alternative performances would have been consideration and there is or appears to the parties to be a substantial possibility that before the promisor exercises his choice events may eliminate the alternatives which would not have been consideration
illusory and alternative promises
(1) a conditional promise is not consideration if the promisor knows at the time of making the promise that the condition cannot occur
(2) a promise conditional on a performance by the promisor is a promise of alternative performances within §77 unless occurrence of the condition is also promised
conditional promise
(1) forbearance to assert or the surrender of a claim or defense to which proves to be invalid is not consideration unless
a. the claim or defense is in fact doubtful because of uncertainty as the facts or the law; or
b. the forbearing or surrendering party believes that the claim or defense may be fairly determined to be valid
(2) the execution of a written instrument surrendering a claim or defense by one who is under no duty to execute it is consideration if the execution of the written instrument is bargained for even though he is not asserting the claim or defense and believes that no valid claim or defense exists
settlement of claims
(1) to constitute consideration, a performance or a return promise must be bargained for
(2) a performance or return promise is bargained for if it is sought by the promisor in exchange for his promise and is given by the promise in exchange for that promise.
(3) The performance may consist of
a. An act other than a promise; or
b. A forbearance, or
c. The creation, modification or destruction of a legal relation
(4) the performance or return promise may be given to the promisor or to some other person. It may be given by the promise or by some other person
requirement of exchange types of exchange
A promise will not be specifically enforced if the character and magnitude of the performance would impose on the court burdens in enforcement or supervision that are disproportionate the advantages to get gained from enforcement and to the harm to be suffered from its denial
effect of difficulty in enforcement or supervision
contracts for personal service or supervision
(1) a promise to render personal service wil not be specifically enforced
(2) a promise to render personal service exclusively for one employer will not be enforced by injunction agasint serving another if it is probable result will compel a performance involving personal relations the enforced continuance of which is undersirable or will be to leave the employee without other reasonable means of making a living
Performance of a legal duty owed to a promisor which is neither doubtful nor the subject of honest dispute is not consideration; but similar performance is consideration if it differs from what was required by the duty in a way which reflects more than a pretense of bargain
performance of a legal duty
(1)Where an offeree fails to reply to an offer, his silence and inaction operate as an acceptance in the following cases only:
(a) where the offeree takes the benefit of offered services with reasonable opportunity to reject them and reason to know that they were offered with the expectation of compensation
(b) where the offeror has stated or given the offeree reason to understand that assent may be manifested with silence or inaction, and the offeree in remaining silent and inactive intends to accept the offer.
(c) Where because of previous dealings or otherwise, it is reasonable that the offeree should notify the offeror if he does not intend to accept.
accpetance by silence or exercise dominion
Manifestation of mutual assent to an exchange requires that each party either make a promise or begin or render a performance
manifestation of mutual assent
An offer is the manifestation of willingness to enter into a bargain, so made as to justify another person in understanding that his assent to that bargain invited will conclude it.
offer defined
A manifestation of willingness to enter into a bargain is not a offer if the person to whom it is addressed knows or has reason to know that the person making it does not intend to conclude a bargain until he has made a further manifestation of assent.
preliminary negotiations
(4) An offeree’s power of acceptance is terminated at the time specified in the offer, or if no times is specified; at the end of a reasonable time
(5) What is a reasonable time is a question of fact, depending on all the circumstances existing when the offer and attempted acceptance are made
(6) Unless otherwise indicated by the language or circumstances, and subject to the rule stated in §49, an offer sent by mail is seasonably accepted if an acceptance is mailed at any time before midnight on the day on which the offer is received
lapse of time
(1) Acceptance of an offer is a manifestation of assent to the terms thereof made by the offeree in a manner invited or required by the offer.
(2) Acceptance by performance requires that at least part of what the offer requests be performed or tendered and includes acceptance by a performance which operates as a return promise
(3) Acceptance by a promise requires that the offeree complete every act essential to the making of the promise.
acceptance of offer defined (promise or performance
(1) Where an offer invites an offeree to choose between acceptance by promise and acceptance by performance, the tender or beginning of the invited performance or tender of a beginning of it is an acceptance by performance.
(2) Such an acceptance operates as a promise to render complete performance
effective of performance by offeree where the offer invites the performance of promises
(1) An offer is binding as an option contract if it
a. Is in writing and signed by the offeror, recites a purported consideration for the making of the offer, and proposes an exchange on fair terms with a reasonable time; or
b. Is made irrevocable by statute.

(2) An offer which the offeror should reasonably expect to induce action or forbearance of a substantial character on the part of the offeree before acceptance and which does not induce such action or forbearance is binding as an option contract to the extent necessary to avoid injustice.
option contract
(1) Where an offer invites an offeree to accept by rendering a performance and does not invite a promissory acceptance, an option contract is create when the offeree tenders or begins the invited performance or tenders a beginning with it.
(2) The offeror’s duty of performance under any option contract so created is conditional on completion or tender of the invited performance in accordance with the terms of the offer.
option contract created by part performance or tender
Unless the offer provides otherwise
(a) an acceptance made in a manner and by a medium invited by an offer is operative and completes the manifestation of mutual assent as soon as put out of the offeree’s possession, without regard to whether it ever reaches the offeror; but
(b) an acceptance under an option contract is not operative until received by the offeror.
time when acceptance takes effect
Acceptance given by telephone or other medium substantially instantaneous two way communication is governed by the principles applicable to acceptances where the parties are in the presence of each other.
acceptance by telephone or teletype
Unless circumstances known to the offeree indicate otherwise, a medium of acceptance is reasonable if it is the one used by the offeror or one customary in similar transactions at the time and place the offer is received.
reasonableness of medium of acceptance
An acceptance sent by mail or otherwise from a distance is not operative when dispatched, unless it is properly addressed and such other precautions taken as are ordinarily observed to insure safe transmission of similar messages
acceptence must be properly dispatched
Where an acceptance is seasonably dispatched but the offeree uses means of transmission not invited by the offer or fails to exercise reasonable diligence to insure safe transmission, it is treated as operative upon dispatch if received with the time in which a property dispatched acceptance would have normally arrived
effect of receopt of acceptance improperly dispatched
A written revocation, rejection or acceptance is received when the writing comes into the possession of the person addressed, or of some person authorized by him to receive it for him, or when it is deposited in some place which he has authorized as the place for this similar communications deposited for him.
what constitutes receipt or revocation, rejection or acceptance
a late or defective acceptance may be effective as an offer to the offeror, but silence will only work as an acceptance to this new offer only in case in 69
effect of receipt by offeror of late or otherwise defective acceptance
An acceptance which requests a change or addition to the terms of the offer is not thereby invalidated unless the acceptance is made to depend on an assent to the change or added terms.
acceptance which requests a change of terms
If an offer prescribes the place time or manner of acceptance its terms in this respect must be complied with in order to create a contract. If an offer merely suggests a permitted place, time or manner of acceptance, another method of acceptance is not precluded.
acceptance of offer whihc states place, time or manner
A reply to an offer which purports to accept it but is conditional on the offeror’s assent to terms additional to or different from those offered is not an acceptance but is a counter offer
purported acceptance which adds qualifications
Where notification is essential to acceptance by promise, the offeror is not bound by an acceptance in equivocal terms unless he reasonably understands it as an acceptance.
effect of equivocal acceptance
An acceptance must comply with the requirements of the offer as to the promise to be made or the performance to be rendered
necessity of acceptanace complying with terms of offer
Except as stated in §69 or where the offer manifests a contrary intention, it is essential to an acceptance by promise either that the offeree exercise reasonable diligence to notify the offeror of acceptance of that the offeror receive the acceptance seasonably.
acceptance by promise; necessity of notification to offer
An offeree’s power of acceptance is terminated when the offeror takes definite action inconsistent with an intention to enter into the proposed contract and the offeree acquires reliable information to that effect
indirect communicatio of revocation
(1) Except as stated in subsection (2) the formation of a contract requires a bargain in which there is a manifestation of mutual assent to the exchange and a consideration.

(2) Whether or not there is a bargain a contract may be formed under special rules applicable to formal contracts or under the rules stated
requirements of a bargain
(1) An offer may invite require acceptance to be made by an affirmative answer in words, or by performing or refraining from performing specified act, or may empower the offeree to make a selection of terms in his acceptance.
(2) Unless otherwise indicated by the language or the circumstances an offer invites acceptance in any manner and by any medium reasonable in the circumstances.
form of acceptance invited
Manifestations of assent that are in themselves sufficient to conclude a contract will not be prevented from so operating by the fact that the parties also manifest an intention to prepare and adopt a written memorial thereof; but the circumstances may show tha the agreements are preliminary negotiations.
existance of a K where the written memorial is contemplated
In case of doubt an offer interpreted as inviting the offeree to accept either by promising to perform what the offer requests or by rendering the performance, as the offeree chooses.
If a contract is not absolutely clear then the beginning of performance acts as an acceptance.
invattion of promise or performance
A manifestation of mutual assent may be made even though neither offer nor acceptance can be identified and even though the moment of formation cannot be determined.
mode of assent: offer/acceptance