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8 Cards in this Set

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Incidental Damages

Damages that compensate for expenses directly incurred because of a breach of contract, such as those incurred to obtain performance from another source.

Consequential Damages(special damages)

Foreseeable damages that result from a party's breach of contract but are caused by special circumstances beyond the contract itself.

Flow from consequences of a breach

Court may award consequential damages to nonbreching party in the event that the breaching party fails to deliver goods, knowing that the buyer is planning to use or resell those goods immediately; breaching party must know(or have reason to know) that special circumstances will cause the nonbreaching party to suffer an additional loss.

Nominal Damages

A small monetary award(often one dollar) granted to a plaintiff when no actual damage was suffered.

Damages awarded are usually small, usually merely establish that defendant acted wrongfully, and brought as a matter of principle under the theory that a breach has occurred and some damages must imposed regardless of actual loss.

Mitigation of damages

The requirement that a plaintiff must do whatever is reasonable to minimize the damages caused by the defendant.

1. Employment contracts

2. rental agreements

Liquidated damages

An amount, stipulated in a contract, that the parties to the contract believe to be a reasonable estimation of the damages that will occur in the event of a breach.

Frequently used in construction contracts because it is difficult to estimate the amount of damages that would be caused by a delay in completing the work.


A contract clause that specifies a certain amount to be paid in the event of a default or breach of contract but is unenforceable because it is designed to punish the breaching party rather than to provide a reasonable estimate of damages.


An equitable remedy under which a person is restored to his or her original position prior to loss or injury, or placed in the position he or she would have been in had the breach not occurred.

Done by both parties to rescind a contract by returning goods, funds, or property previously conveyed; if consumed, restitution must be made in an equivalent dollar amount.

Recaptures benefit conferred on the defendant that has unjustly enriched him.

Several advantages over damages:

1. available in situations when damages cannot be proved or are difficult to prove

2. used to recover specific property

3. sometimes results in greater overall award.

Not limited to rescissions; parties can seek restitution in tort actions, and other types of actions, such as when funds have been transferred by mistake, fraud, or incapacity.

Specific performance

An equitable remedy granted by the court in which the parties are ordered to perform as promised in the contract. Is normally granted when the legal remedy(monetary damages) is inadequate.

Provides exact bargain promised in the contract.

Avoid problems inherent in a suit for monetary damages, such as collecting a judgement and arranging another contract.

Actual performance may be more valuable to the promisee than monetary damages.

normally only granted when legal remedy is inadequate; thus, sales contracts usually don't qualify for specific performance, but in cases of unique goods, courts may grant specific performance.

1. Sale of Land

2. Contracts for personal services