R.J. Robertson — Contracts II — Spring 2011
THREE REMDIAL PRINCIPALS OF CONTRACT LAW
END ALL ARGUMENTS WITH THESE PRINCIPALS
Rule Statement: Contract law’s purpose is to compensate the (non-breaching party) through substitution by placing the (non-breaching party) in the position (he/she/it) would have been in if the contract had been performed.
1. Compensation – the “purpose” of the remedy- to compensate the promisee’s loss from the breach
– Not punishment
– Not deterrence
2. Substitution – the “form” of remedy. – Monetary damages
– Not specific
3. Expectation – the “amount” of the remedy – the position the P would be in if the contract would have been performed
– Not reliance
– Not Restitution
Issue Statement: Can (non- breaching party) use (RS § ) to get a remedy from (breaching party) where (breaching party) …. (facts of contract).
Questions to ask for yourself before writing
1. Is contract for:
– the sale of goods,
– service contract, or
– contract for the improvement of land.
2. Which party breached?
3. So, what remedies for that kind of contract where that party breaches.
Remedies for personal services and defective/unfinished construction
1. § 347 (Services)
2. § 348 (Defective or unfinished construction)
Buyer remedies for a breach of contract for the sale of goods
1. Cover § 2-712 (Goods) —– § 347 (Services)
2. Market Value § 2-713 (Goods) —– § 348 (Defective or unfinished construction)
3. Specific Performance § 2-716 (Goods and Personal Services
Seller”s remedies for a breach of contract for the sale of goods
1. Resale 2-706
2. K-Market damages §2-708(1) Lost Profit
3. Action for the price §2-709
4. Lost Volume Seller §2-708(2)
Limitations on damages
1. Avoidability (duty to mitigate)
2. Foreseeability
3. Certainty
4. Causation
REMEDEIS (PERSONAL SERVICES & INCOMPLETE/DEFECTIVE CONSTRUTION)
1. § 347
Injured party has right to damages based on his expectation interest as measured by:
(1) loss in value plus others loss caused by breach minus any other cost or loss avoided by not having to perform.
2. § 348(2)
If breach results in unfinished or defective construction and the loss in value to the injured party is not proved with sufficient certainty, he may recover damages based on:
(1) the decrease of the market price of the property,
(2) the re
s breach
(2) Market price is to be determined where delivery is due
3. SPECIFIC PERFORMANCE — § 2-716
Specific Performance – equitable remedy- no adequate remedy at law
Spec. Perf.- Given when:
§ 2-716
(1) goods are unique or other proper circumstances
1. Unique Good – can’t estimate the market value. Rule ?????
2. Proper circumstances
(a) Sale of Goods- can estimate but buyer unable to cover- evidence of proper circumstances
(b) Proper circumstances Outputs and Requirements contracts- impossible to estimate damages (Quanity?)
(c) Sale of real property- land is unique
Spec. Perf.- Not given when:
1. Most sales of goods- can cover using § 2-712 and § 2-713
2. § 367-1 Personal Service Contracts
– Moral Hazard-(won’t give 100% performance
– 13th Amendment- Involuntary Servitude
– Bickering b/ween parties
3. Contracts with specifications that would cause disputes
Seller’s Remedies (Goods)
§ 2-710 Seller’s Incidental damages
