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Contracts
SUNY Buffalo Law School
Miller, Teresa A.

Contracts
2/6/07
 
I. Remedies
            A. Why Remedies Important?
1. When courts enforce contracts they are giving a remedy to some party
2. Courts are following a theory of what they think contracts mean
3. Looking at the remedy = finding goal of contracts
4. Determining the remedy helps find the theory behind contract and the             breach
5. Reveals underlying purposes of contract law
            B. Public vs. Private Law
                        1. Tort vs. Contract – contract is private
                        2. Contracts – when they are making an agreement it only binds them
3. Source of the obligation – only two parties entering into an exchange of promises
4. Basis for recovery in lawsuit – Courts are bound to abide by agreement made and how it was breached, as long as it is legal
5. Remedy is very specific to the agreement made
 
 
Economic Losses                                                                                       Equitable
Expectance                                 Reliance                                                       Restitution
As good as position                  Out Of Pocket expenditures                              Specific performance
Distrib. justice                              Restoring Status quo ante                              Quantum mernit
                                                  Putting the non breaching party back           Disgorging unjust enrichment
Expectation interest
                              i.      Definitions
1.     Expectation interest – The interest in getting the value you would have gotten if the contract had been performed, or in other words, getting damages such that you’d be in the same position that you’d be in if the promise hadn’t been broken.
2.     “One is entitled to recover an amount that will put one in as good a position as one would have been in had the contract been performed.”
3.     This gives the injured party the “benefit of the bargain”.
4.     It is based on the actual value the contract would have had to the injured party if the contract had been performed.
 
     Reliance interest
                                i.      Definitions
1.     Reliance interest – the interest in getting back the value you lost because you were counting on the contract to be performed
2.     “The interest a nonbreaching party has in recovering costs stemming from that party’s reliance on the performance of the contract.” – Black’s 7th
3.     This attempts to put the injured party in the position it would have been in if the contract had never been made.
4.     It’s a cost that came out of the plaintiff’s pocket but didn’t go into the defendant’s pocket.  It might have gone to a third party, for example, Hawkins’s hospital fees.
1.     Reliance is a lot harder to prove than expectation, and so if you want to ensure good contracts from a policy standpoint it’s more practical to use expectation.
2.     When we don’t get what we’re promised, our feelings are hurt.  There is an interest in protecting against the stress of broken promises that is best enforced with expectation damages.
Restitution interest
                                                  1.      Restitution interest – the interest in getting the money back that you paid while trying to do your part of a contract
                                                  2.      With restitution you’re merely taking the benefit away from the defendant that the plaintiff gave him/her.
 
 
Hawkins v. McGee
Facts: McGee is a doctor and Hawkins was his patient.  Hawkins paid McGee to perform surgery on his hand.  Hawkins testified that McGee guaranteed

ave inappropriate instructions to the jury.  The court ordered a new trial where the right jury instructions would be given.
 
v      Parties à Dr. McGee (surgeon), George Hawkins (patient)
v      Causes of Action
Ø       Assumpsit – breach of warranty, guarantee
Ø       Negligence – dismissed at the trial court level, without exception
v      McGee’s motion for nonsuit (dismissal) on both counts
Ø       Denied for assumpsit claim
Ø       Granted for negligence claim
v      Jury Trial Verdict for plaintiff è $3000
v      Motion for Directed Verdict on assumpsit claim
Ø       Denied
v      Motion to set aside verdict on grounds?
Ø       Denied for all but excessive damages
v      Damages reduced to $500
v      Plaintiff appealed this verdict
Ø       Grounds for appeal à doesn’t want to remit everything except for $500
v      Trial Court looking back now, at facts surrounding deterioration of hand
v      Judge Branch looks forward, at promise made between the parties, and tries to measure the difference between the value of the hand as promised and the value of the hand as delivered
v      Can’t give recovery for pain and suffering because that was assumed to have occurred anyways within the basis of the contract
Ø       What you are willing to go through to get the better hand à within contract
v      Issues
Ø       Is there a contract?
Ø       Is there a legally enforceable agreement?
What distinguishes the basis in tort v. contract?