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4 Cards in this Set

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UCC 2-716(1)
The applicable rule is UCC § 2-716(1), which provides, "Specific performance may be decreed when the goods are unique or in other proper circumstances."
B, a collector of Seabiscuit memorabilia, has a contract to buy from S a saddle that was once worn by Seabiscuit for $10,000. S then breaches the contract, telling B he has the saddle but plans to ship it to another buyer in a couple of weeks.

Can B get a court order requiring S to sell the saddle to B?
YES. The same rule, UCC § 2-716, applies. Because B will not be able to obtain the saddle on the market, the remedy at law -- damages -- would not be adequate to compensate B for the loss. Therefore the court will probably grant the equitable remedy of specific performance.
For example, B has a contract to buy 10,000 widgets from S for $10,000. S then breaches the contract, telling B he had the widgets but was going to ship them to another buyer in a couple of weeks. When S breached, B went to the widget market and bought 10,000 widgets for $12,000. However, because of the delay caused by S, B's assembly line had to stop for three days and he lost $3,000.

Is S responsible for the damages?
Definitely the $2000 but the $3000 only if B can prove that a reasonable person in S's shoes would have known that loss was likely to occur.
The loss of $2000 is a direct loss, and the loss of $3000 is a consequential loss. If you have studied Hadley v. Baxendale, you know that the first type of loss is always recoverable because it always results from the breach. But the second type of loss is recoverable only if the non-breaching party can prove that a reasonable person in the shoes of the breaching party would have known at the time of making the contract that the loss would likely result from breach. We call this the principle of foreseeability.
For example, Seller agrees to sell her house to Buyer for $100,000 and Buyer gives Seller a $5,000 down payment. Seller then correctly claims that the contract is an oral contract that is unenforceable under the Statute of Frauds. What remedy does Buyer have against Seller?
Expectancy, Reliance, or Restitution
Buyer may recover the $5000 from Seller on a restitution.
Even though there is no contract, Buyer is entitled to restitution of the money. Because it would be unjust for Seller to keep Buyer's money in this situation, restitution is often called "unjust enrichment."