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7 Cards in this Set
- Front
- Back
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What are the requirements for rescission and restitution in response to a breach of contract? [Gannet v Register]
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The injured party MUST:
(1) inform the breaching party of their intention to rescind AND (2) return any benefit they have received AND (3) do so within a "reasonable" time AND (4) NOT affirm the contract through any conduct |
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In the context of buying a business, if the seller breaches and the buyer wishes to rescind, must the buyer allow the business to fail to avoid "affirming" the contract?
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NO. There is a business survival exception that allows the buyer to reasonably operate the business so that whoever eventually is determined to be the owner is not damaged by the needless failure of the business.
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Why might an injured party prefer rescission and restitution to damages?
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If the value of the contract is NEGATIVE, the injured party will prefer rescission because restitution is valued at ZERO and that is still better than NEGATIVE/LOSS
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What factors might determine whether an injured party is employing a business survival exception or affirmiing the contract through the exercise of ownership over the business? [Gannet v Register]
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The following might indicate affirmation rather than business survival steps:
(1) Major changes made to the business w/o consultation to the other party (2) Unnecessary or unreasonable steps beyond what is required to maintain the business in its status quo ante |
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How can the doctrine of election of remedies be described as a special doctrine of estoppel?
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If the injured party has changed the breaching party's position in reliance of the deal (i.e., if they have exercised such control over the benefits of the contract that they are of a different nature than the breaching party entered into) [Gannet]
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Is demonstrable pecuniary injury required to entitle an injured party to restitution as a remedy for breach of contract?
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No. The new restatement rejects the idea that pecuniary injury is required because the party against whom a contract is breached is ALWAYS considered "injured" by the breaching party. [Earl v Saks]
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What are two value-based ways to formulate damages?
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(1) Value Promised/Expected - Value Delivered = Damages
(2) Value Paid - Value Delivered = Damages |
