Business Law: Remedies

Restitution + Quasi-Contract

A court may award restitution, even in the absence of a contract, where one party has conferred a benefit on another and it would be unjust for the other party to retain the benefit.

Specific Performance

A court will award specific performance, ordering the parties to perform the contract, only in cases involving the sale of land or some other asset that is unique.

Mitigation of Damages

A party injured by a breach of contract may not recover for damages that he could have avoided with reasonable efforts

Remedy

A remedy is the method a court uses to compensate an injured party.

Injunction

An injunction is a court order that requires someone to do something or refrain from doing something.

Compensatory damages

Compensatory damages are those that flow directly from the contract.

equitable remedies

Court-ordered action that directs parties to do or not to do something

When is Specific Performance used by a court?

Courts use this equitable remedy when money damages would be inadequate to compensate the injured party.

legal remedies

Expectation and reliance interest money damages became known as legal remedies

Reliance interest + Promissory Estoppel

In promissory estoppel cases, a court will generally award only reliance damages.

Equitable Interest

In some cases, money damages will not suffice to help the injured party. Something more is needed, such as an order to transfer property to the injured party (specific performance) or an order forcing one party to stop doing something (an injunction).

Punitive Damages

Punitive damages are designed not to compensate the injured party but to punish the breaching party.

Restitution

Restitution is a common remedy in contracts involving fraud, misrepresentation, mistake, and duress

Reliance Interest.

The injured party may be unable to demonstrate expectation damages, but he may still prove that he expended money in reliance on the agreement and that in fairness he should receive compensation.

Restitution Interest

The injured party may be unable to show an expectation interest or reliance. But perhaps she has conferred a benefit on the other party. Here, the objective is to restore to the injured party the benefit she has provided.

Reliance Interest

The reliance interest is designed to put the injured party in the position he would have been in had the parties never entered into a contract.

restitution interest

The restitution interest is designed to return to the injured party a benefit that he has conferred on the other party, which it would be unjust to leave with that person.

incidental damages for seller

UCC: Most courts hold that the seller of goods is not entitled to consequential damages

incidental damages for buyer

UCC: the buyer is entitled to consequential damages provided that the seller could reasonably have foreseen them

interest

a legal right in something

Reformation

a process in which a court will partially "re-write" a contract.

liquidated damages clause

a provision in the contract that declares in advance what one party will receive if the other side breaches.

permanent injunction

after trial, it appears that the plaintiff has been injured and is entitled to an injunction, the trial court will make its order

Nominal Damages

are a token sum, such as one dollar, given to a plaintiff who demonstrates that the defendant breached the contract but cannot prove damages.

Consequential Damages

are those resulting from the unique circumstances of this injured party. the injured party may recover consequential damages only if the breaching party should have foreseen them when the two sides formed the contract.

Seller's Remedies: if seller acted in good faith

awarded the difference between the original contract price and the price she was able to obtain in the open market

Seller's Remedies

buyer breaches a sale of goods contract, the seller generally has at least two remedies

Liquidated Damages

clause, a provision stating in advance how much a party must pay if it breaches A court will generally enforce a liquidated damages clause if (1) at the time of creating the contract it was very difficult to estimate actual damages, and (2) the liquidated amount is reasonable.

preliminary injunction

order issued early in a lawsuit prohibiting a party from doing something during the course of the lawsuit

expectation damages

the money required to put one party in the position she would have been in had the other side performed the contract.

Incidental damages

the relatively minor costs that the injured party suffers when responding to the breach.

Buyers remedies: cover

to make a good faith purchase of goods similar to those in the contract. The buyer may then obtain the difference between the original contract price and her cover price.

Expectation Interest

to what the injured party reasonably thought she would get from the contract. The goal is to put her in the position she would have been in if both parties had fully performed their obligations.