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13 Cards in this Set
- Front
- Back
Fundamental Assumption #1
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The law is mainly concerned with the relief of promises to redress breach, NOT with forced performance or punishment.
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Nominal Damages
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all victims of breach are entitled, they are awarded as a declaration of P’s rights. (breach proven but no damage done)
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Compensatory Damages
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given to relieve breach, to protect the expectations, reliance, and restitution interests of the aggrieved party.
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Punitive Damages
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damages given with purpose to punish (not in contracts) never given, unless accompanied by a tort. Unless- breach of fiduciary duty, or excessive bad behavior. Starting to be allowed in insurance insureds cases.
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Fundamental Assumption #2
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Relief usually protects a promisee’s expectation interest. Party contracts because they expect to receive benefit.
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Expectations Interest
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a. Puts the aggrieved party in the position they would be in if the promise had been fulfilled.
b. Expectation damage if: injury is worse than if the promise had been preformed. |
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Reliance Interest
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a. Puts the aggrieved party in the position they would be in if the promise were never made.
b. Reliance damage if: injury if worse than before the promise was formed c. Usually couples with recovery for malpractice |
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Restitution Interest
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a. Puts the promisor back in the position they would be in if the promise were never made (disgorgement of unjust enrichment/profits)
b. Restitution damages if: promisor is unjustly enriched (if they benefited at the aggrieved party’s expense.) c. No out of pocket expenses, only money/benefits given to the promisor. |
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Fundamental Assumption #3
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Appropriate form of relief is compensatory ($) rather than specific (injunction – court order directing performance of promise)
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Pareto Efficiency
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Scarce resources need to be allocated to where they can reach their highest value.
Reallocation of resources is efficient only if it will make an economic unit better off w/o making another unit worse off. (Then it is said to be pareto efficient/ pareto superior). |
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Pareto Efficiency
(Economic Breach) |
breaking a contract when you would gain more than the penalty for breach. (argument – you could develop reputation as aggressive publisher, it was already custom anyway) done for the good of society.
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Pareto Efficiency
(Transaction Costs) |
look for a way to get around them (negotiating settlement out of court or for the lower end seller to buy and then resell to higher)
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Pareto Efficiency
(criticism) |
economic analysis is too simple. Not every buyer acts in a rational way…there are also social values and emotions that come into play. This analysis is limited-only based on money (Look at long-term value of breaching a contract – could develop reputation as contract breacher, no one would trust. Damage measure might also affect other parties’ reliance on contract ($ on advertising, etc)
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