REMEDIES
I. Expectation Damages-getting what you contracted for. Put you where you would have been had the contract been performed. Receive benefit of bargain including profits
· Expectation damages are = to value of promised performance (K price) minus whatever benefits the other party receives from not having to complete his own performance
A. Costs of Completion v. decrease in value –
1. when ∆ defectively performed usually can get cost of remedying the defective performance – substitute performance
-but if cost of remedying is clearly disproportionate to the loss in market value from defective performance, π will only recover loss in market value
2. economic waste-when defect is minor and remedying it would involve economic waste such as destruction of building
a. Jacob & Youngs v. Kent – reading pipe
-gets diff b/ween the two pipes
B. substitute value- money to fulfill value of contract; paid value you lost, $ that substitutes the performance value; performance may not be possible
1. subjective value
a. (can) not prove it; “personal value”
2. objective value
a. can prove it; market value
C. substitute performance- money to have performance done by someone else; to pay for completion.
1. Hawkins v. McGee (Hairy Hand)- Expectation damages put party where they would have been with perfectly completed K, received substitute value b/c no substitute performance was available.
a. Special K – guaranteed a perfect result that is why there was a breach
b. no substitute performance was available so court awarded substitute value
2. Sullivan – substitute value- only get it if it can be proved.
a) Rule- Damages cannot be speculative!
b) court awarded reliance b/c expectation damages would have been excessive and she could not prove what she spent
c) reliance will follow when restitution is not available and when expectancy cannot be proven
3. Groves v. Wunder- exception: no substitute value given (12,000). Was given substitute performance (60,000) b/c
a) Presumption-used in certain types of cases. Presumption that the substitute value can be up to the value of the substitute performance.
b) Even though the common rule is that wh
, but in these terms : diminution in the market price of the property or the reasonable cost of completing performance or of remedying the defects if that cost is not clearly disproportionate to the probable loss in value to him
D. duty to mitigate- make reasonable effort to limit losses resulting from the other party’s breach. Not doing so precludes the party from collecting damages that might have been avoided. *you must attempt to mitigate or you will lose everything you would have received in damages. (no need to incur substantial expenses or inconvenience to mitigate), use alternative sources
-mitigation extends to employment contracts on both employer and employee
1. Acme Mills-wheat; no SV no SP
a) Get nothing if could have mitigated and helped breacher but did not
b) good guy has a duty to help the breacher
c) if he could have gone out and purchase the wheat for cheaper should have done it
