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26 Cards in this Set
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Restitution |
Factors to Determine whether or not there was a quasi-contract: (1) The benefit to me (2) Expectation of the benefactor to be paid (3) Common practice/usage of trade (4) Knowledge on my part that the benefit is not being conferred gratuitously (5) Ease on benefactor's part of making a contract and on my part of saying "no" |
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Two Defenses to a Quasi-Contract |
Gratuitous: compensation isn't due because it was something that was meant to be free Officiousness: Forced on you when you didn't want it in the first place |
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Three Interests to Protect in Contract Law |
Expectation Interest Reliance Interest Restitution Interest |
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Expectation Interest |
The anticipated profit from entering into an agreement enforceable by law |
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Reliance Interest |
Restore the plaintiff to the status quo, or where they were before. For example, out-of-pocket expenses |
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Restitution Interest |
Goal is to prevent unjust enrichment by restoring to the plaintiff any benefit the plaintiff has conferred onto the defendant before the breach |
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§347 Measure of Damages, In General |
The injured party has a right to damages based on his 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 breach, less (c) any cost or other loss that he has avoided by not having to perform |
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Measuring Expectation Damages (Expectancy) |
Example: D promises to sell P a boat for $5,000. P can get a boat on the market like this for $7,000. If D breaches his promise, P is entitled to $2,000 in damages, the difference between the K price agreed upon, and the price needed to buy a comparable boat somewhere else.
Ie. the difference between what is promised and what is received |
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Measuring Reliance Damages |
Goal is to put the plaintiff in the position they were in before the promise was made (out-of-pocket). -Out of pocket -Change in appearances -Pain and suffering The damages must be reasonable |
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§349. Damages Based on Reliance Interest |
Can recover for 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 performed |
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Limitations of Damages: Certainty |
Generally, if damages are too speculative they will not be awarded. Considerations: (1) The fact that the breach caused the type of injury that plaintiff alleges (causation limitation) (2) The extent to which the plaintiff suffered from the breach (dollar amount of damages caused) (3) Both causation and amount (assessment) Liquidate damages can also be part of the assessment |
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§356. Liquidated Damages and Penalties |
Damages for breach can be stipulated in the agreement but only at an amount that is reasonable in light of the anticipated or actual loss caused by the breach and the difficulties of proof of loss. A term fixing unreasonably large liquidated damages is unenforceable on grounds of public policy as a penalty |
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Factors Determining Reasonableness of Liquidated Damages |
(1) Anticipated or actual loss caused by the breach: it is reasonable to the extent that it approximates the actual loss that has resulted from the particular breach, even though it may not approximate the loss that might have been anticipated under other possible breaches. (2) Difficult of proof of loss: The greater the difficulty either of proving that loss has occurred or of establishing its amount with the requisite certainty, the easier it is show that the amount is reasonable. |
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Foreseeability of Damages |
Damages out of a breach of K are reasonable if they are in the normal course of what the parties would have reasonably expected. The loss needs to flow naturally from the breach, or there needs to be special circumstances constituting damages |
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Avoidability of Damages |
Cannot continue performance if you have enough reliable information to know that you will not get paid, and you should not keep working on a project. Aggrieved party should not move forward if they are aware of a breach |
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§351. Unforeseeability and Related Limitations on Damages |
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 K was made. Loss may foreseeable as a probable result because it follows from the breach: (a) in the ordinary course of events, or (b) as a result of circumstances, beyond the ordinary course of events, that the party in breach had reason to know 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 circumstance justice so requires in order to avoid disproportionate compensation |
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§353. Loss Due to Emotional Disturbance |
Recovery for emotional disturbance will be excluded unless the breach also caused bodily harm or the contract or the breach is of such a kind that serious emotional disturbance was a particularly likely result |
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Restitution Damages where there is no contract: Quasi Contract |
Sometimes the law is willing to provide restitution damages where no contract is formed between the parties (doctor saves your life on the side of the road)
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Situations where Restitution Applies |
(1) Quantum Meruit: the value of services rendered to another (limited in cases where attorney's are present) (2) Quantum Valebant: the value of property delivered to another (3) Money had and received: Money held by one person but belonging to another |
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Where Restitution is Used |
(1) As an independent theory of recovery when there is no enforceable K because of the lack of mutual assent or some other formation defect (quasi contract) (2) As an alternative method to measure damages, or as independent remedy, for a party not in breach of an enforceable contract (3) As an independent Remedy for a party who has breached an enforceable K (4) As an independent theory of recovery when a K in unenforceable because of some defect such a lack of requisite writing (statute of frauds, impossibility, mistake, or incapacity) |
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§371. Measure of Restitution Interest |
If a sum of money is awarded to protect a party's restitution interest, it may as justice requires be measured either by (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 been increased in value or his other interests advanced |
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§357. Availability of Specific Performance |
An injunction against breach of a K duty will be granted in the discretion of the court against a party who has committed or is threatening to commit a breach of duty if: (a) the duty is one forbearance, or (b) the duty is one to act and specific performance would be denied only for reasons that are inapplicable to an injunction |
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§359. Effect of Adequacy of Damages on Specific Performance |
Specific performance or an injunction will not be ordered if damages would be adequate to protect the expectation interest of the injured party |
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§360. Factors Affecting Adequacy of Damages |
In determining whether the remedy in damages would be adequate, the following circumstances are significant: (a) the difficulty of proving damages with reasonable certainty (b) the difficulty of procuring a suitable substitute performance by means of money awarded as damages, and (c) the likelihood that an award of damages could not be collected |
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§362. Effect of Uncertainty of Terms on Specific Performance |
Specific performance or an injunction will not be granted unless the terms of the K are sufficiently certain to provide a basis for an appropriate order |
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§366. Effect of Difficulty in Enforcement of Supervision on Specific Performance |
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 to the advantages to be gained from enforcement and to the harm to be suffered from its denial |
