Remedies Outline

Remedies – Allen – Summer 2010

Compensatory Damages
1) Definition
a. We want to use money to put the complaining party in the position that they would have been in had the defendant not committed a wrong
b. Put the plaintiff into the rightful position
c. This is the most common remedy in American litigation
2) Property Law Rules
a. Generally
i. In compensating damages, we look to the market value
1. What a willing buyer and seller would normally exchange
ii. We are usually dealing with a tort claim, but it may be a claim for eminent domain (constitutional law)
iii. Ask yourself:
1. What is the market that we’re looking at?
a. The relevant market can change depending on how you look at the problem
2. What’s the geographic scope of the market?
a. Things may have different values in different areas
3. How much proof do we need?
4. What is the time frame?
a. When the price of property may fluctuate in value, a bright line rule must be developed as to at what exact time we should value the property
b. We don’t want to allow the plaintiff to play with the defendant’s money
i. Don’t want to provide a remedial rule that fluctuates, so for any given piece of property that will change in value over time, the court will or has adopted a bright line rule
c. In an agriculture case
i. We value crops at the time of harvest
d. In investment securities’ case
i. FL – The plaintiff gets the highest value between the time of the wrong and the action is commenced
1. This is very favorable for the plaintiff
ii. Often the rule is the date of the wrong
5. Before you try to take yourself out of the rule, make sure that the rule is not beneficial for you
iv. Exceptions:
1. There are component parts
a. Components of an integrated system
b. An integral part of a whole that can’t function without it
i. If this is shown get actual replacement costs, instead of market value
ii. We do this because of waste
iii. Once in this exception, must apply a different rule
2. There’s no market or this is a special use property
a. Situation in which the loss says there’s no market are exceedingly rare
b. Thus, you can’t place a market value
c. If you fit into this situation, you’re not given a replacement rule
d. Must now convince the judge of an alternate rule because you now have to put a dollar value on something & there’s no market
e. Different situations have different ways to determine the amount based upon the facts
3) Contracts
a. General Rule
i. We are trying to put the plaintiff in the same position if it weren’t for the defendant’s wrong
ii. We use Expectancy damages (place had the K had been fully performed)
1. The plaintiff may, however, chose reliance damages instead
a. This is not economical because in almost every, if not every situation the reliance damages will be included within the expectancy damages
b. Will choose reliance when:
i. The plaintiff can’t prove expectancy or it is too expensive
ii. Or, it’s a losing contract
2. The consequences to this are:
a. The plaintiff may end up with something that looks like a windfall
b. Excessive expectancy
i. Can get the value of something that doesn’t exist or that you haven’t expended anything
iii. If you contract for something at a certain price and then one party breaches, the remedy is market damages, not the contract price
1. You may end up paying a lot more money than expected for the breach if the good you contracted for is worth much more
b. Statutes make a difference
i. Can create rights & remedies that don’t exist in the CL or can alter the CL
ii. First:
1. Look at the organizing principle
a. UCC
i. Organizing principle is buyer/seller
ii. Use this to see how it can be difficult when a statute takes an approach that is very specific
iii. Tries to follow the common law principle, but the more specific you are the more you exclude certain situations
c. If there is a breach for the sale of goods
i. First:
1. Did the buyer or seller breach?
ii. Second:
1. Look to see whether or not the SELLER has made a resale
a. UCC – 2-708 (When there has been no resale)
i. Market price – contract price + incidentals – offsetting benefits = contract result
b. UCC – 2–706 (When there has been a resale)
i. Contract price – resale price + incidentals – offsetting benefits = result
1. ALWAYS ARGUE WHETHER OR NOT RESALE PRICE IS REASONABLE
c. UCC – 2-210
i. The seller is able to recover incidentals, as long as the parties did not contract out
d. The seller can ONLY recover incidentals
iii. Third:
1. Did the buyer cover?
a. UCC – 2-712
i. Must be in good faith
ii. Without delay
iii. At a reasonable price
iv. Will receive: The cost of cover + incidental/consequential – expenses saved by the breach
b. The buyer can recover BOTH incidentals and consequential
iv. Statutory exceptions:
1. Lost volume sellers
a. Look to see whether or not the plaintiff owns just one of an item or an unlimited amount
b. If the plaintiff owns just one & he sells that, he will incur no loss assuming he sells for the same price
c. However, if the plaintiff has an unlimited amount, he will incur a loss because he could have made 2 sales, so he is able to recover for the lost profit as part of his expectation
i. UCC 2-708 allows for this
4) PI
a. To initially calculate personal injury look at market damages
i. Market damages here equal how much you make per hour, how many hours you work, and how many hours you lost out on
1. Look for overtime & such (can be difficult)
b. To calculate pain and suffering:
i. Correctiv