CH 20: Breach of Contract and Remedies

specific performance

action brought to compel the adverse party to perform a contract on the theory that merely suing for damages for its breach will not be an adequate remedy.

remedy

action or procedure that is followed in order to enforce a right or to obtain damages for injury to a right.

reservation of rights

assertion by a party to a contract that even though a tendered performance (e.g., a defective product) is accepted, the right to damages for nonconformity to the contract is reserved.

consequential damages

damages the buyer experiences as a result of the seller's breach with respect to a third party, also called special damages.

punitive damages

damages, in excess of those required to compensate the plaintiff for the wrong done, that are imposed in order to punish the defendant because of the particularly wanton or willful character of wrongdoing; also called exemplary damages.

breach

failure to act or perform in the manner called for in a contract.

valid

legal.

direct damages

losses that are caused by breach of a contract.

nominal damages

nominal sum awarded the plaintiff in order to establish that legal rights have been violated although the plaintiff in fact has not sustained any actual loss or damages.

injunction

order of a court of equity to refrain from doing (negative injunction) or to do (affirmative or mandatory injunction) a specified act. Statute use in labor disputes has been greatly restricted.

anticipatory breach

promisor's repudiation of the contract prior to the time that performance is required when such repudiation is accepted by the promisee as a breach of the contract.

exculpatory clause

provision in a contract stating that one of the parties shall not be liable for damages in case of breach; also called a limitation-of-liability clause.

limitation-of-liability clause

provision in a contract stating that one of the parties shall not be liable for damages in case of breach; also called an exculpatory clause.

liquidated damages

provision stipulating the amount of damages to be paid in the event of default or breach of contract.

waiver

release or relinquishment of a known right or objection.

anticipatory repudiation

repudiation made in advance of the time for performance of the contract obligations.

liquidated damages clause

specification of exact compensation in case of a breach of contract.

compensatory damages

sum of money that will compensate an injured plaintiff for actual loss.