BLAW - Chapter 15: Breach and Remedies

When Quasi Contract Is Used

- When no contract exists - When a contract exists but is unenforceable - Partially performing party can recover value of services when contract is unenforceable

Common Uses of Liquidated Damages Provisions

- construction contracts - sale of goods - loan contracts -contracts with entertainers and professional athletes

To determine whether a particular provision is for liquidated damages or a penalty, the court must answer two questions:

1. At the time the contract was formed, was it apparent that damages would be difficult to estimate in the event of a breach? 2. Was the amount set as damages a reasonable estimate and not excessive? If the answers to both questions are yes, the provision normally will be enforced If either answer is no, the provision usually will not be enforced

Types of Damages:

1. Compensatory (to cover direct losses and costs) 2. Consequential (to cover indirect and foreseeable losses) 3. Punitive (to punish and deter wrongdoing) 4. Nominal (to recognize wrongdoing when no monetary loss is shown) 5. Liquidated

Two-step process to determine whether a breach of contract has resulted in compensatory damages:

1. Must be established that there is a contract between the parties and that the contract has been breached 2. It must be proved that the breach caused damages

To recover on a quasi contract theory, the party seeking recovery must show the following:

1. The party conferred (granted) a benefit on the other party 2. The party conferred the benefit with the reasonable expectation of being paid 3. The party did not act as a volunteer in conferring the benefit 4. The party receiving the benefit would be unjustly enriched if allowed to retain the benefit without paying for it

Damages

A breach of contract entitles the nonbreaching party to sue for monetary damages

Contract Provisions Limiting Remedies

A contract may include provisions stating that no damages can be recovered for certain types of breaches or that damages will be limited to a maximum amount A contract may also provide that the only remedy for breach is replacement, repair, or refund of the purchase price In addition, a contract may provide that one party can seek injunctive relief if the other party breaches the contract

Contracts for Personal Services Ex: Nicole contracts with a surgeon to remove a tumor on her brain. If he refuses to perform the surgery, the court will not compel (nor would Nicole want) him to perform

A court cannot ensure meaningful performance in such a situation

Incorrect Written Statement of the Parties' Oral Agreement

A court will reform a contract when two parties enter into a binding oral contract but later make an error when they attempt to put the terms into writing Usually, the court will allow into evidence the correct terms of the oral contract, thereby reforming the written contract

Remedies in Equity

A remedy allowed by courts in situations where remedies at law are not appropriate. Remedies in equity are based on settled rules of fairness, justice, and honesty, and include injunction, specific performance, rescission and restitution, and reformation

Nominal Damages

A small monetary award (often one dollar) granted to a plaintiff when no actual damage was suffered Nominal damages awards are often small, such as one dollar, but they do establish that the defendant acted wrongfully Most lawsuits for nominal damages are brought as a matter of principle under the theory that a breach has occurred and some damages must be imposed regardless of actual loss

To remodel his home in Connecticut, Richard Viola hired J. S. Benson of J. S. Benson Woodworking & Design as his contractor. Over a period of five years, Viola paid Benson more than $500,000 to fabricate and install windows and doors, nearly $50,000 for the purchase of lumber, $10,000 to ship and store the lumber, as well as $111,000 toward the contract price. Nevertheless, Benson failed to complete the project and would not give Viola the lumber that he had purchased despite repeated requests. Viola eventually sued Benson for breaching the contract.

A state court held that Benson had breached the contract and ordered him to pay $848,000 in damages. The damages awarded included additional amounts to reimburse Viola for attorneys' fees, rental costs (because he was unable to live in the home), and property taxes.

Penalty

A sum specified in a contract not as a measure of compensation for its breach, but rather as a punishment for a default The agreement as to the amount will not be enforced, and recovery will be limited to the actual damages Although a penalty specifies a certain amount to be paid in the event of a default or breach of contract, it is designed to penalize the breaching party, not to make the innocent party whole If a court finds that a provision calls for a penalty, the agreement as to the amount will not be enforced, and recovery will be limited to actual damages

Reformation Ex: If Carson contracts to buy a forklift from Yoshie but the written contract refers to a crane, a mutual mistake has occurred

Accordingly, a court could reform the contract so that the writing conforms to the parties' original intention as to which piece of equipment is being sold

Recission

An action to undo, or cancel, a contract—to return nonbreaching parties to the positions that they occupied prior to the transaction

Liquidated Damages

An amount, stipulated (specified) 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 A liquidated damages provision in a contract specifies that a certain dollar amount is to be paid in the event of a future default or breach of contract. (Liquidated means determined, settled, or fixed.)

Specific Performance

An equitable remedy in which a court orders the parties to perform as promised in the contract This remedy normally is granted only when the legal remedy (monetary damages) is inadequate This remedy is attractive to a nonbreaching party because it provides the exact bargain promised in the contract Normally, however, specific performance will not be granted unless the party's legal remedy (monetary damages) is inadequate Monetary damages ordinarily are adequate in sales contracts because substantially identical goods can be bought or sold in the market Only if the goods are unique will a court grant specific performance

Restitution

An equitable remedy under which a persons are restored to their original position prior to loss or injury, or placed in the position they would have been in had the breach not occurred To rescind a contract, both parties generally must make restitution to each other by returning goods, property, or funds previously conveyed If the property or goods can be returned, they must be. If the property or goods have been consumed, restitution must be made in an equivalent dollar amount. Essentially, restitution involves the recapture of a benefit conferred on a defendant who has been unjustly enriched by that benefit

Reformation

An equitable remedy used when parties have imperfectly expressed their agreement in writing Reformation allows a court to rewrite the contract to reflect the parties' true intentions

Employment Contracts Ex: Susan works as a librarian at Barnett University. When Susan is fired, she claims that she has been terminated in retaliation for filing an employment discrimination claim. Suppose that Susan succeeds in her employment discrimination claim but that Barnett can show that she has failed to take another librarian position when several comparable positions were available

Barnett can assert that she has failed to mitigate damages. In that situation, any compensation she is awarded for wrongful termination will be reduced by the amount she could have obtained from other employment

Yes. A state intermediate appellate court affirmed the judgment of the trial court. The landlord had materially breached the lease, and its rescission was an appropriate remedy. Cipriano breached its duties to the Munawars regarding payment of their share of the real estate taxes. Cipriano's breach consisted of its overcharges of the Munawars' share of the taxes and the landlord's refusal to explain the calculation of this assessment. Cipriano had "ample opportunities" to make this explanation and failed to do so. The overbilling and the failure to explain it were voluntary and intentional. The breach was material—the overcharges were about 130 percent of the Munawars' actual pro rata share. And rescission would restore the parties to their status quo before the lease.

Cipriano argued that it would lose the benefit of its lease with the Munawars. But the purpose of rescission "is not to give the breaching party the benefit of the bargain that it would have had but for its breach." Here, before the lease, Cipriano had an empty store. As a result of the rescission, the landlord would once again have an empty store that it could lease to another party.

Clara Lee contracted to purchase Rosalina Robles's dental practice in Chicago, Illinois, for $267,000. Nearly half of the practice's market value was attributed to the business's good reputation. After Lee took over the practice, however, Chicago Magazine and other local media revealed that one of the dentists at Robles's practice had treated underage prostitutes in the offices after hours. Federal authorities were investigating that dentist for this and other misconduct.

Clara Lee contracted to purchase Rosalina Robles's dental practice in Chicago, Illinois, for $267,000. Nearly half of the practice's market value was attributed to the business's good reputation. After Lee took over the practice, however, Chicago Magazine and other local media revealed that one of the dentists at Robles's practice had treated underage prostitutes in the offices after hours. Federal authorities were investigating that dentist for this and other misconduct.

If the buyer breaches when the seller has not yet produced the goods, ---

Compensatory damages equal the seller's lost profits on the sale, not the difference between the contract price and market price

Contracts for Personal Services

Contracts for personal services require one party to work personally for another party Courts normally refuse to grant specific performance of personal-service contracts One reason is that ordering parties to perform personal services against their will would amount to a type of involuntary servitude

Covenants Not to Compete

Courts may reform contracts involving written covenants not to compete, or restrictive covenants Such covenants are often included in contracts for the sale of ongoing businesses and in employment contracts The agreements restrict the area and time in which one party can directly compete with another party If a covenant not to compete is for a valid and legitimate purpose, but the area or time restraints are unreasonable, some courts will reform the restraints by making them reasonable and will then enforce the entire contract as reformed Other courts will throw out the entire restrictive covenant as illegal

Fraud or Mutual Mistake

Courts order reformation most often when fraud or mutual mistake is present

Incidental damages

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

Compensatory Damages

Damages that compensate the nonbreaching party for the loss of the bargain These damages compensate the injured party only for damages actually sustained and proved to have arisen directly from the loss of bargain caused by the breach of contract They simply replace what was lost because of the wrong or damage, and, for this reason, are often said to "make the person whole"

Covenants Not to Compete Ex: Cardiac Study Center, Inc., a medical practice group, hired Dr. Robert Emerick. Later, Emerick became a shareholder of Cardiac and signed an agreement that included a covenant not to compete. The covenant stated that a physician who left the group promised not to practice competitively in the surrounding area for a period of five years. After Cardiac began receiving complaints from patients and other physicians about Emerick, it terminated his employment.

Emerick sued Cardiac, claiming that the covenant not to compete that he had signed was unreasonable and should be declared illegal. Ultimately, a state appellate court reformed the geographic and temporal restraints, and held that the covenant as reformed was both reasonable and enforceable. Cardiac had a legitimate interest in protecting its existing client base and prohibiting Emerick from taking its clients

Equitable Remedies

Equitable remedies include rescission and restitution, specific performance, and reformation

Quasi Contract Ex: Ericson contracts to build two oil derricks for Petro Industries. The derricks are to be built over a period of three years, but the parties do not create a written contract. Therefore, the writing requirement will bar the enforcement of the contract. After Ericson completes one derrick, Petro Industries informs him that it will not pay for the derrick

Ericson can sue Petro Industries under the theory of quasi contract Ericson can sue in quasi contract because all of the conditions for quasi-contractual recovery have been fulfilled. Ericson conferred a benefit on Petro Industries by building the oil derrick. Ericson built the derrick with the reasonable expectation of being paid. He did not intend to act as a volunteer. Petro Industries would be unjustly enriched if it was allowed to keep the derrick without paying Ericson for the work. Therefore, Ericson should be able to recover in quantum meruit the reasonable value of the oil derrick that was built, which is ordinarily equal to the fair market value

Compensatory Damages Ex: Jane wires Roy, her financial advisor, $34,980 to purchase an allocation of FluidCoin's initial cryptocurrency offering. Roy does not invest these funds as agreed, instead commingling them with funds used for his personal acquisition of FluidCoin. Jane sues Roy, seeking $34,980 in compensatory damages

Finding breach of contract, a court awards Jane the $34,980 plus attorney's fees and litigation costs, with interest

Consequential Damages or Special Damages

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

Enforceability Ex: Kent State University v. Ford Gene Ford signed a five-year contract with Kent State University in Ohio to work as the head coach for the men's basketball team. The contract provided that if Ford quit before the end of the contract term, he would pay to the school liquidated damages in an amount equal to his salary ($300,000), multiplied by the number of years remaining on the contract. Laing Kennedy, Kent State's athletic director, told Ford that the contract would be renegotiated within a few years.

Four years before the contract expired, however, Ford left Kent State and began to coach for Bradley University at an annual salary of $700,000. Kent State filed a suit in an Ohio state court against Ford, alleging breach of contract. The court enforced the liquidated damages clause and awarded the university $1.2 million. Ford appealed, arguing that the liquidated damages clause in his employment contract was an unenforceable penalty.

Randall contracts to perform certain services exclusively for Hernandez during the month of March for $4,000. Hernandez cancels the contract and is in breach. Randall is able to find another job during March but can earn only $3,000

He can sue Hernandez for breach and recover $1,000 as compensatory damages. Randall can also recover from Hernandez the amount that he spent to find the other job

After construction has been completed in construction contract

If the owner breaches after construction has been completed, the contractor can recover the entire contract price, plus interest

Before performance has begun in construction contract

If the owner breaches before performance has begun, the contractor can recover only the profits that would have been made on the contract. (Profits equal the total contract price less the cost of materials and labor.)

During performance in construction contract

If the owner breaches during performance, the contractor can recover the profits plus the costs incurred in partially constructing the building

Enforceability of Liquidated Damages Provisions Ex: Planned Pethood Plus, Inc. (PPP) borrowed $389,000 from KeyBank with a 10-year loan term and a prepayment penalty clause. The clause stipulated a lump-sum payment formula for early repayment, with a higher penalty for sooner payments. After a year, PPP opted to repay, and KeyBank imposed a prepayment penalty of $40,525.92 (10.7% of the balance). PPP sued, arguing the clause was an unenforceable penalty. The bank claimed it was a reasonable liquidated damages provision. A liquidated damages provision in a contract designates a specific sum for future breaches, while a penalty provision aims to penalize the breaching party. To determine enforceability, two questions are crucial: Were potential damages hard to estimate at contract formation? Is the specified amount a reasonable estimate of potential damages?

In PPP's case, the prepayment penalty aimed to estimate the lender's potential loss due to early repayment. At contract formation, predicting the timing of prepayment was challenging. The formula provided a reasonable estimate of potential losses. As both crucial questions were affirmed, the provision was deemed for liquidated damages and thus enforceable.

Sale of Goods

In a contract for the sale of goods, the usual measure of compensatory damages is the difference between the contract price and the market price

In contract law, damages compensate for:

In contract law, damages compensate the nonbreaching party for the loss of the bargain Often, courts say that innocent parties are to be placed in the position they would have occupied had the contract been fully performed

Recovery Based on Quasi Contract

In some situations, when no actual contract exists, a court may step in to prevent one party from being unjustly enriched at the expense of another party Quasi contract is a legal theory under which an obligation is imposed in the absence of an agreement The legal obligation arises because the law considers that the party accepting the benefits has made an implied promise to pay for them Generally, when one party has conferred a benefit on another party, justice requires that the party receiving the benefit pay the reasonable value for it The party conferring (giving) the benefit can recover in quantum meruit, which means "as much as one deserves

Employment Contracts

In the majority of states, a person whose employment has been wrongfully terminated has a duty to mitigate damages incurred because of the employer's breach of the employment contract In other words, a wrongfully terminated employee has a duty to take a similar job if one is available If the employee fails to do this, the damages received will be equivalent to the person's former salary less the income that person would have received in a similar job obtained by reasonable means The employer has the burden of proving that such a job existed and that the employee could have been hired. Normally, a terminated employee is under no duty to take a job that is not of the same type and rank

HDAV Outdoor, LLC v. Red Square Holdings, LLC continued. Did the district court abuse its discretion by awarding Red Square $45,000 in lost profits? No. The Nevada Court of Appeals affirmed the lower court's ruling and award. "HDAV Outdoor's challenge to the award of lost profits fails." The appellate court acknowledged that damages resulting from a breach of contract must be reasonably foreseeable at the time of the contract. The court recognized that those damages could include an award of lost profits that result from "an inability to timely use equipment as long as the delay is attributable to the breaching party."

In this case, HDAV Outdoor did not deliver the truck by the promised delivery date. Red Square claimed that its inability to use the truck until it was delivered resulted in lost profits. The appellant argued that Red Square had not provided evidence of its costs to offset against the sought-after lost profits. The appellate court explained, however, that an award of delay damages does not require the consideration of such an offset. "Obviously, Red Square was not incurring any costs specifically related to operating the truck because it did not have the truck to operate." Finally, the court pointed out, "Red Square specifically notified HDAV Outdoor that it intended to commence advertising with the truck, and thus it was reasonably foreseeable that any delay in delivering the truck would adversely affect Red Square's profitability."

Restitution Ex: Katie contracts with Mikhail to design a house for her. Katie pays Mikhail $9,000 and agrees to make two more payments of $9,000 (for a total of $27,000) as the design progresses. The next day, Mikhail calls Katie and tells her that he has taken a position with a large architectural firm in another state and cannot design the house. Katie decides to hire another architect that afternoon

Katie can obtain restitution of the $9,000

Remedy at law

Normally monetary damages

Exculpatory Clauses

Provisions stating that no damages can be recovered

Limitation-of-Liability Clauses

Provisions that affect the availability of certain remedies

Punitive Damages

Punitive damages generally are not awarded in lawsuits for breach of contract Because punitive damages are designed to punish the wrongdoer and set an example to deter similar conduct in the future, they have no legitimate place in contract law In a few situations, when a person's actions cause both a breach of contract and a tort, punitive damages may be available

Consequential Damages Ex: HDAV Outdoor, LLC v. Red Square Holdings, LLC HDAV Outdoor, LLC, contracted with Red Square Holdings, LLC, to customize an Isuzu Diesel Eco Max box truck with LED light displays that would allow Red Square to use the truck for mobile advertising. HDAV Outdoor agreed to complete the customization within eight weeks after Red Square delivered the truck. HDAV Outdoor did not finish the job, however, until four and a half months after the eight-week completion date.

Red Square filed a suit in a Nevada state district court against HDAV Outdoor, alleging breach of contract and seeking damages. Mohamood Razack, Red Square's sales manager, testified that, based on the company's record of past profits, it had lost $12,000 per month in profits because of HDAV's "untimely" work. The district court ruled in Red Square's favor and awarded damages in the amount of $45,000 in lost profits for the delay. HDAV Outdoor appealed, challenging the award.

Arby's Restaurant Group, Inc. Arby's faced a lawsuit from customers after hackers breached its credit card systems, compromising personal information. Plaintiffs argued Arby's failed to enhance security despite awareness of data breaches, claiming an implied contract where businesses promise to safeguard customer information. Arby's contended it couldn't be unilaterally obligated to protect credit card data, asserting its responsibility was solely providing food in exchange for payment.

Rejecting these arguments, a federal court in Georgia ruled that a reasonable jury could find that an implied contract existed between Arby's and the plaintiffs. When customers use a credit card, the court concluded, they intend to share their financial information only with the merchant. If the customers had known that this information was at risk of being stolen, they likely would have taken their business elsewhre

Restitution Is Not Limited to Rescission Cases

Restitution may be required when a contract is rescinded, but the right to restitution is not limited to rescission cases Because an award of restitution basically returns something to its rightful owner, a party can seek restitution in actions for breach of contract, tort actions, and other types of actions

Rental Agreements

Some states require a landlord to use reasonable means to find a new tenant if a tenant abandons the premises and fails to pay rent If an acceptable tenant becomes available, the landlord is required to lease the premises to this tenant to mitigate the damages recoverable from the former tenant The former tenant is still liable for the difference between the amount of the rent under the original lease and the rent received from the new tenant. If the landlord has not taken reasonable steps to find a new tenant, a court will likely reduce any award by the amount of rent the landlord could have received had this step been taken

Restitution offers several advantages over traditional damages. First, restitution may be available in situations when damages cannot be proved or are difficult to prove. Second, restitution can be used to recover specific property. Third, restitution sometimes results in a greater overall award.

TRUE

The function of a quasi contract is to impose a legal obligation on a party who made no actual promise

TRUE

The terms of a contract must be sufficiently definite for a court to determine the amount of damages to award.

TRUE

To avoid the risk of consequential damages, a seller can limit the buyer's remedies via contract

TRUE

Sale of Land Ex: Harmony Development agreed to sell seven acres of a planned subdivision to Jerry Davis for $1.5 million. The contract required Harmony to spend $1.85 million improving the property so that Davis could construct a health club on it. After Harmony made the improvements, Davis informed the company that the subdivision no longer "fit in harmony" with his plans and refused to complete the purchase. Harmony sued for breach of contract

The Wyoming Supreme Court granted specific performance, calling the remedy "a means of compelling [Davis] to do precisely what he should have done without being coerced by a court."

For the nonbreaching party to recover consequential damages, --------

The breaching party must know (or have reason to know) that special circumstances will cause the nonbreaching party to suffer an additional loss

Owens Community College lost its accreditation from the National League for Nursing Accreditation Commission (NLNAC) in July. The college did not inform its nursing students of this development until after classes had started in the fall. Carianne Baird and sixty-one other students from the program filed a breach of contract suit against Owens. An Ohio appeals court determined that a contract existed in which the students paid their fees in exchange for a degree from an NLNAC-accredited institution. By losing that accreditation, Owens breached the contract.

The court also recognized the probability that this breach would harm the plaintiffs' career prospects. Therefore, compensatory damages could be determined by measuring the difference between their future earnings capacity as graduates of an NLNAC-accredited nursing college and their future earnings capacity as graduates of now-unaccredited Owens

Construction Contracts

The measure of damages in a building or construction contract depends on which party breaches and when the breach occurs

Construction Contract Breach by Owner

The owner may breach at 3 diff stages - before performance begun, during performance, or after performance has been completed

Remedy

The relief provided to an innocent party when the other party has breached the contract

Sale of Land

The remedy for a seller's breach of a contract for a sale of real estate is specific performance, in which the buyer is awarded the bargained-for parcel of property When the buyer is the party in breach, the measure of damages is typically the difference between the contract price and market price of the land The same measure is used when specific performance is not available (because the seller has sold the property to someone else, for instance)

Mitigation of Damages

The requirement that a plaintiff do whatever is reasonable to minimize the damages caused by the defendant's breach of contract

Standard Measure

The standard measure of compensatory damages is the difference between the value of the breaching party's promised performance under the contract and the value of that party's actual performance This amount is reduced by any loss that the injured party has avoided

Medik Laboratories contracts to buy ten model UTS 400 network servers from Cal Industries for $4,000 each, but Cal Industries fails to deliver the servers. The market price of the servers at the time Medik learns of the breach is $4,500

Therefore, Medik's measure of damages is $5,000 (10 × $500), plus any incidental damages (expenses) caused by the breach

Was the liquidated damages clause in Ford's contract enforceable? Yes. A state intermediate appellate court affirmed the lower court's award. The clause was not a penalty. "There was justification for seeking liquidated damages to compensate for Kent State's losses" on Ford's breach. At the time the contract was entered into, determining the damages that would result from a breach was "difficult, if not impossible." The resignation of a head coach from a university's basketball team may cause a loss in ticket sales and a drop in community and alumni support for the team. The university's ability to recruit players may also be affected. Of course, a search for a new coach and coaching staff will be required.

These effects are not easy to measure before they happen, especially considering that such results may be different at different times in a coach's tenure. Kennedy's statement that the contract would be renegotiated indicated that Kent State was interested in the stability of these factors. And in this case, "based on the record, . . . the damages were reasonable." The salary that Bradley was willing to pay Ford showed the cost to Kent State of finding a new coach with his skill and experience. "There was also an asserted decrease in ticket sales, costs associated with the trip for the coaching search, and additional potential sums that may be expended."

Hadley v. Baxendale (1854) established the rule that a breaching party is only liable for consequential damages if it had prior notice of special circumstances causing additional loss to the nonbreaching party. The case involved a broken crankshaft transported by Baxendale for the Hadley family's flour mill. Baxendale's delay in delivery forced the mill's closure, leading Hadleys to sue for lost profits. The court ruled that Baxendale was not liable for damages because the Hadleys had not communicated the specific circumstances of potential profit loss due to the mill's shutdown.

This precedent still applies today, limiting compensation to damages foreseeable in the ordinary course of events following a breach. The rule extends to contracts in the online environment, where a plaintiff must show that the defendant had reason to know specific facts and foresee the alleged injury.

Nominal Damages Ex: Hernandez contracts to buy potatoes from Stanley at fifty cents a pound. Stanley breaches the contract and does not deliver the potatoes. Meanwhile, the price of potatoes falls. Hernandez is able to buy them in the open market at half the price he agreed to pay Stanley. Hernandez is clearly better off because of Stanley's breach

Thus, if Hernandez sues for breach of contract and wins, the court will likely award only nominal damages

Cipriano Square Plaza Corp. v. Munawar Haseeb and Razia Munawar entered into a lease to rent space in a shopping center in Greenbelt, Maryland, owned by Cipriano Square Plaza Corporation. The lease obligated the Munawars to pay a pro rata (proportionate) share of the real estate taxes. The new tenants were assessed with property tax charges shortly after occupying the leased space. Asserting that the amount was excessive, they asked Cipriano for an explanation. The lease required the landlord to provide certain documents (such as tax bills) and explain how the tenants' share was calculated. After repeated requests, the Munawars received a partial reduction but no explanation. They filed a suit in a Maryland state court against Cipriano, alleging a breach of the lease. The court rescinded the deal. Cipriano appealed.

Were the Munawars entitled to rescind their lease?

When is Recission available?

When fraud, mistake, duress, undue influence, lack of capacity, or failure of consideration is present, rescission is available. Rescission may also be available by statute0

Construction Contract Breach by Contractor

When the contractor breaches the contract—either by failing to begin construction or by stopping work partway through the project—the measure of damages is the cost of completion. The cost of completion includes reasonable compensation for any delay in performance. If the contractor finishes late, the measure of damages is the loss of use

Construction Contract Breach by Both Owner and Contractor

When the performance of both parties—the construction contractor and the owner—falls short of what their contract required, the courts attempt to strike a fair balance in awarding damages