Contracts - Remedies barbri amp
In the case of breach of contract, which of the following does not describe a duty owed by the nonbreaching party to prevent avoidable damages?
A seller must resell the goods if possible when the buyer is in breach of a sale of goods contract Under Article 2, when a buyer refuses to accept goods or repudiates the contract, a seller MAY resell the goods, but is not required to do so. Market damages are available if the seller does not resell. If an employer breaches a contract, the employee must try to find a comparable job in the same locale. Unless it will increase the damages, when an owner breaches, a builder is under a duty to cease work on a project. Unless it will increase, rather than decrease damages, a manufacturer is under a duty to cease work when the party for whom the goods are being manufactured breaches the contract.
In the case of a sale of goods contract, if the standard measure of damages does not adequately compensate a seller for the buyer's breach because the seller can manufacture or obtain as many goods as he can sell, he may recover damages based on ____________.
Lost profits In the case of a sale of goods contract, if the standard measure of damages does not adequately compensate a seller for the buyer's breach because the seller can manufacture or obtain as many goods as he can sell, the seller is a lost volume seller and may recover damages based on lost profits. Generally, the lost profit is measured by the contract price with the breaching buyer minus the cost to the seller. The difference between the contract price and the market price and the difference between the contract price and the resale price are the standard measures of a seller's damages. Neither measure will adequately compensate a lost volume seller.
Expectation damages are also known as:
Benefit of the bargain damages "Benefit of the bargain" damages is another name for expectation damages, i.e., those damages sufficient for the plaintiff to buy a substitute performance. Reliance damages put the plaintiff in the position she would have been in had the contract never been formed. Consequential damages consist of losses resulting from the breach that any reasonable person would have foreseen would occur from a breach at the time of entry into the contract. Incidental damages may be granted in an action for breach of contract for the sale of goods for expenses reasonably incurred by the buyer in inspection, receipt, transportation, care, and custody of goods rightfully rejected, and other expenses reasonably incident to the seller's breach, and by the seller in storing, shipping, returning, and reselling the goods as a result of the buyer's breach.
__________ damages consist of losses resulting from the plaintiff's particular circumstances that any reasonable person would have foreseen as a probable result of breach.
Consequential Compensatory damages attempt to put the nonbreaching party where she would have been had the promise been performed, so far as money can do this. Expectation, consequential, incidental, and reliance damages are all forms of compensatory damages. Consequential damages are special damages over and above standard expectation damages. These damages result from the nonbreaching party's particular circumstances and are recoverable only if a reasonable person would have foreseen them as a probable result of breach. Note that in contracts for the sale of goods, only a buyer may recover consequential damages. Expectation damages are the standard measure of compensatory damages. Expectation damages are based on an "expectation" measure or what is sufficient for the nonbreaching party to buy a substitute performance. This type of damages is also known as "benefit of the bargain" damages. Reliance damages award the plaintiff the cost of her performance. They are designed to put the plaintiff in the position she would have been in had the contract never been formed. A plaintiff may elect to recover damages based on a reliance measure rather than an expectation measure when expectation damages will be too speculative to measure. Incidental damages include expenses reasonably incurred by the buyer in inspection, receipt, transportation, care, and custody of goods rightfully rejected and other expenses reasonably incident to the seller's breach, and by the seller in storing, shipping, returning, and reselling the goods as a result of the buyer's breach.
A liquidated damage clause will be enforceable only if:
Damages were difficult to estimate at the time the contract was formed and the amount agreed upon was a reasonable forecast of compensatory damages in the case of breach The parties to a contract may stipulate what damages are to be paid in the event of a breach. These liquidated damages must be in an amount that is reasonable in view of the actual or anticipated harm caused by the breach. A liquidated damage clause will be enforceable if damages were difficult to estimate at the time the contract was formed and the amount agreed upon was a reasonable forecast of compensatory damages in the case of breach. If the above requirements are met, the plaintiff will receive the liquidated damages amount. Most courts hold this is so even if no actual money or pecuniary damages have been suffered. Thus there is no requirement that the amount agreed to be a reasonable reflection of the compensatory damages at the time of breach and it is also not necessary that compensatory damages are now difficult to determine.
Reliance damages are appropriately awarded when:
Expectation damages are too speculative to measure Reliance damages may be awarded when expectation damages are too speculative to measure. Reliance damages award the plaintiff the cost of her performance, putting the plaintiff in the position she would have been in had the contract never been formed. Reliance damages are not the standard measure of damages. Expectation damages are the standard measure of damages. Losses resulting from the breach that any reasonable person would have foreseen would occur from a breach at the time of contracting are consequential, not reliance, damages. Expenses incurred by the nonbreaching party incident to the breach are incidental damages. These include expenses for transportation, care, and storage of rejected goods if a seller breaches, and expenses for shipping and reselling if a buyer breaches.
To recover full damages when an employer breaches an employment contract, the employee:
Must make a reasonable effort to find a new position of the same kind in the same locale A nonbreaching party cannot recover avoidable damages. To avoid incurring additional damages, a nonbreaching employee must try to find a comparable position in the same locale. If the breaching employer can prove that a comparable job in the same locale was available, then contract damages against that breaching employer for lost wages will be reduced by the wages that the plaintiff would have received from that comparable job.
Reliance damages ______________.
Put the plaintiff in the position she would have been in had the contract never been formed Reliance damages put the plaintiff in the position she would have been in had the contract never been formed. If the plaintiff's expectation damages will be too speculative to measure, the plaintiff may elect to recover reliance damages instead. Liquidated damages are the damages stipulated to by the parties to a contract. Parties to a contract may stipulate what damages are to be paid in the event of a breach, provided the amount is reasonable in view of the actual or anticipated harm caused by a breach. Consequential damages are damages resulting from the breach that any reasonable person would have foreseen would occur from a breach at the time of entry into the contract. Punitive damages, the purpose of which is to punish a defendant for wrongful conduct, are generally not awarded in contract cases.
In the case of a breach of an employment contract by the employee, the employer may recover:
The cost to replace the employee regardless of whether the breach was intentional The employer is entitled to recover what it costs to replace the employee (i.e., the wages the employer must pay to a replacement employee minus the breaching employee's wages) regardless of whether the breach was intentional. The breaching employee may offset money owed for work done to date. The fair market value of the employee's services is not an appropriate measure of damages for breach of an employment contract.
In the event of a breach by the buyer in a sale of goods contract, possible measures of damages that may be recovered by the seller include:
The difference between the contract price and the market price, the difference between the contract price and the resale price, and lost profits Possible measures of a seller's damages in the event of a breach by the buyer in a sale of goods contract include: the difference between the contract price and the market price, the difference between the contract price and the resale price, and lost profits. In a sale of goods contract, only the buyer may recover consequential damages; they are not available to the seller. Likewise, warranty damages are available only to the buyer and arise when the buyer accepts nonconforming goods.
In the case of a breach of an employment contract by the employer, the measure of the employee's damages is:
The full contract price regardless of when the breach occurs In the case of a breach of an employment contract by the employer, the standard measure of the employee's damages is the full contract price regardless of when the breach occurs.
In a construction contract, if the property owner breaches the contract __________.
before construction has started, the builder is entitled to the profits he would have derived from the contrac In a construction contract, if the property owner breaches the contract before construction has started, the builder is entitled to the profits he would have derived from the contract. He is not entitled to the contract price, because the contract price includes costs that he has not yet incurred. The profits measure puts him where he would have been had the promise been performed. If the owner breaches the contract during construction, the builder's damages are not measured by profits he would have derived from the contract minus the costs of completion. That statement mixes two ways of stating the builder's damages in this situation. If the breach occurs during construction, the builder is entitled to the profits he would have derived from the contract plus any costs he has incurred to date, or the contract price minus the cost of completion. If the owner breaches the contract after completion, the damages measure is not profits he would have derived from the contract plus interest. In this case, the builder has already incurred all of the costs of construction, so the appropriate remedy is the contract price, plus interest.
In a contract for the sale of goods, __________ may recover consequential damages
only the buyer Consequential damages are losses over and above standard expectation damages. These damages flow from the nonbreaching party's particular circumstances and may be recovered only if, at the time the contract was made, a reasonable person would have foreseen the damages as a probable result of the breach. In contracts for the sale of goods, only the buyer may recover consequential damages.
