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Contracts
University of California, Davis School of Law
Joo, Thomas W.

Contracts Outline
 
Basis for Recognizing an Enforceable Obligation
 
I.                   Definitions of a Contract
a.      Restatement of Contracts (Second) § 1. Contract defined
                                                               i.      A contract is a promise or a set of promises for the breach of which the law gives a remedy, or the performance of which the law in some way recognizes as a duty.
b.      Contract-a legally binding agreement in which the law gives a remedy if you break it, duty to perform
c.      3 Fundamental Assumptions in Enforcing Promises
                                                               i.      The law is concerned mainly with relief of promisees to redress breach and not with punishment of promisors to compel performance
                                                             ii.      The relief granted to the aggrieved promisee should generally protect the promisee’s expectation by attempting to put the promisee in the position in which it would have been had the promise been performed
                                                            iii.      The appropriate form of relief is substitutional, in the form of a judgment awarding money damages to be paid to the aggrieved promisee, rather than specific, in the form of a court order directing the promisor to perform its promise
 
II.                The Meaning of “Enforce”
a.      Expectation damages
                                                               i.      Restatement (Second) of Contracts § 347.
1.        The injured party has a right to damages based on his expectation interest as measured by:
a.        The loss in the value to him of the other party’s performance caused by its failure or deficiency, plus
b.       Any other loss, including incidental or consequential loss, caused by the breach, less
c.        Any cost or other loss that he has avoided by not having to perform.
                                                             ii.      Damages as if the contract hadn’t been broken
                                                            iii.      Doesn’t include return of cost expected to be had if contract had not been breached
                                                           iv.      Also, doesn’t include ill gotten gains of party in breach
                                                             v.      Normal rule of figuring out damages
 
[US Navel Institute v. Charter Communications, Inc. (Berkeley): Plaintiff entered into a licensing agreement with Defendant to publish the paperback copy of Hunt for Red October with the caveat that the Defendant wouldn’t publish any until October 1985. Defendant sent out 1.4 million copies to retailers early (a common trade practice) but selling of the books began on Sept.15, 1985 and was brisk enough to land it toward the top of the bestseller lists by the end of the month. The court of appeals decided that the Plaintiff was not entitled to the profits because there was no copyright infringement but that it was entitled to the compensatory damages for breach of contract.]  
b.      Restitution damages
                                                               i.      Restatement (Second) of Contracts § 371.
1.        If a sum of money is awarded to protect a party’s restitution interest, it may as justice requires be measured by either:
a.        The reasonable value to the other party of what he recei

or: Sullivan entered into an agreement with O’Connor wherein O’Connor promised to perform plastic surgery on her nose and thereby enhance her beauty and improve her appearance. The result of the series of surgeries though was the disfigurement of Sullivan’s nose, pain in body and mind, and damages and expenses. Payments by Sullivan covering O’Connor’s fee and hospital expenses were stipulated at $622.65. The jury found for Sullivan and awarded her $13,500. O’Connor appealed the decision on the basis that the judge shouldn’t have allowed the jury to considered anything outside of Sullivan’s out-of-pocket expenses ($622.65) while Sullivan appealed the judge’s refusal to allow the jury to consider the difference between the promised nose and the one delivered but was willing to waive that exception if the appellate court overruled O’Connor’s exceptions (in other words, she would be happy with what she got). The court overruled the O’Connor’s exceptions.]  
Problem discussing the differences between the 3 damages
Sullivan’s claim:
                Doctor’s fee                                           $300
                Hospital fee/operation                        $100
                Pain and suffering/operation              $3,000
                Value of enhanced appearance                $20,000
                Loss due to disfigurement                        -$10,000