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Contracts II
Southern Illinois University School of Law
Robertson, RJ

R.J. Robertson — Contracts II — Spring 2011
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
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
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