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31 Cards in this Set
- Front
- Back
- 3rd side (hint)
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Priority among damages
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Expectation damages: Automatic if provable to a reasonable degree of certainty
Reliance damages may be avaiable, unless D can prove the expectation damages are less than reliance damages Restitution may be available, which may require material breach, but not capped by expectation. |
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Damages in contract
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Expectation
Reliance Restitution |
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Expectation
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The rightful position is the position P would have occupied if the contract had been perfomed.
Recovering the benefit of the bargain, e.g., any expected profit |
No expectation damages in torts.
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Expectation
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A contract creates rights to which P becomes entitled, and this contractual entitlement is what P loses when D breaches.
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Restitution (UCC-2-718)
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The buyer, despite his breach, may have restitution of the amount by which his payment exceeds reasonable liquidated damages in the K or 20% of the value of the buyer's
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Seller's remedies (2-708(1))
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Non-acceptance or repudiation by the Buyer:
KP - MP + Incidental - Expenses saved because of buyer's breach |
MP determined at the time and place for tender
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Seller's Remedies (2-708(2))
Lost-volum seller |
If the remedy under 708(1) is inadequate,
Profit + Incidental |
Unlimited supply
Unlimited demand |
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Seller's Remedies (2-706)
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Seller resells the goods and recovers KP - Resale P + Incidental - Expenses saved because of buyer's breach
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Seller's Remedies (2-709)
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Sue for the Price if the buyer keeps the goods but fails to pay
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Seller's Remedies (2-702 and 2-704)
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If seller discovers that buyer is insolvent, seller can stop delivery or reclaim the goods.
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Reliance damages-limit
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If D can prove that P would have lost A as P expected from the performance of the contract, the rule is that the expected loss mut be substracted from any reliance recovery.
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Efficient breach
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Profitable violations of law shoud be encouraged so long as violators compensate thier victims
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Damages for breach of warranty (2-714(2))
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FMV of th goods accepted - the value of the goods as warranted.
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Danger: warranted performance
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Buyer's remedies under UCC
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No cover: KP - MP + Consequential + Incidental (2-713)
Cover: KP - the cover price Consequential + Incidental (2-712) Accepted: Value of goods accepted - Value of goods as warranted (2-715) Specific performance if the goods are unique or the buyer is otherwise unable to cover. (2-716) |
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Consequential damages
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Buyer may recover consequential damges that the seller had reason to know about at the time of contracting and that the buyer could not reasonably avoid.
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Reasonable certainty
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Cannot be based on mere speculation and must be proved to a reasonable degree of certainty
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Pareto efficiency
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Each party better off
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Kaldor-Hick efficiency
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The parties as a whole better off, even some parties may be worse off
Repeats of Kaldor-Hick often lead to Pareto efficiency (random) |
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The Coase Theorem
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Who is the cheapest cost avoider?
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The Coase Theorem
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If there is zero transaction cost, then any leagal rule leads to efficient results.
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The parties bargains to get an efficient result.
However, diefferent legal rules may result in different distribution of wealth. |
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Externality
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Reciprocal nature of externalities
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Compensatory damages force the other party to internalize th damages
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Buyer's cover
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In good faith and commercially reasa
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Seller's resale
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In good faith and commercially reasonable manner
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Consequential & incidental damages-Special pleading rule
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Special damage must be specially pleaded
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Buyer's incidental damages
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Reasonable expenses incident o the delay or breach
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Buyer's consequential damages
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The damages that the seller at the time of contracting had reason to know and which could not reasonably be prevented by cover or otherwise
Injury to person or property proximately resulting from any breach of warranty |
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Seller's incidental damages
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Commercially reasonable expenses
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Consequential damages for failure to pay
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Limited to the principal owed plus interest at eh prevailing legal rate.
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The case is distinquishable from the instant case.
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Mitigation
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If P could reasonably mitiage, but did not, then the damages are as if mitigated.
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Contract-Cost to completion v. difference in value
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You get cost to completion, unless grossly disproporitonal to difference in value
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Constract-which market?
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The vaule (whole sale) you purchased the goods, not the value you sold (retail)
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