A. Three Fundamental Assumptions made by courts in enforcing promises:
1. Concerned with relief of breach (compensatory) as opposed to punishment (punitive)
2. Relief granted should be expectational in nature
3. Appropriate form of relief is substitutional rather than specific ex: money not performance
B. Summary of Damages
1. Specific Relief: Injunctions or specific performance. Benefits: a) shifts burden of determining cost of defendant’s conduct to the parties b)prices/costs more accurately determined by mkt that a ct.
2. Substitutional Relief
a) Punitive damages are not allowed
1) Direct (general)-expectancy/reliance/restitution/cover/recover. Flow naturally from the breach of contract.
2) Incidental and Consequential (special)- Damages which do not flow necessarily flow from the breach of contract
c) Nominal- shows who prevailed (not intended to compensate)
3. How do we decide what kind of damages to give?
a) R § 347 Expectation: put the injured party in the position they would have been in had the contract have been performed
b) R§ 349 Reliance: put the injured party in the position they were in before the contract. Used when: (1) it is impossible to measure the plaintiff’s expectation interest accurately and (2) the plaintiff recovers on a promissory estoppel theory.
c) R§373 Restitution: put the breaching party in the position they were in before the contract (limited to the benefits conferred on him by the injured party) Used when (1) a non-breaching plaintiff has partially performed, and the restitution measure is greater than the contract price and (2) a breaching plaintiff has not substantially performed, but is allowed to recover the benefit of what he has conferred on the defendant
d) Cover (UCC § 2-711, 2-712, 2-713, 2-715) Laredo Hides Co. v. H&H Meat Products
1) Sullivan v. O’Connor (found that when doctor breached contract for nose job, found that promise was to enhance beauty and appearance, pain and suffering contracted for is not recoverable, restitution too meager, expectancy too excessive, so applied a kind of reliance)
2) White v. Benkowski (found that punitive damages are not available for breach of contract cases, nominal damages are only awarded if no actual damages or inconveniences have occurred, view evidence in light most favorable to the plaintiff)
a) When deciding if something is a good or a service to decide if the UCC is applicable, use the Predominant Factor test. Is it more like a good or a service. Is it a good with service incidental, or a service with a good incidental.
4. UCC § 2-716 Specific Performance-granted when damages are inadequate
1) Physical uniqueness
2) Other proper circumstances ex: inability to cover
a. Legal remedy has too much uncertainty to calculate
1) Laclede Gas Co. v. Amoco Oil Co. (finding that damages are not adequate for breach of a long term gas contract because amount gas needed, length of time the gas was needed, and the cost of propane were too uncertain to calculate, and that both parties don’t need mutuality of remedy)
at the claim or defense may be fairly determined to be valid (subjective test)
2) Fiege v. Boehm (finding that in order for forbearance to assert a claim to be consideration, must have a reasonable and honest belief, and that since the woman had a reasonable and honest belief that she had a bastardy claim against him, the woman’s forbearance was good consideration)
c. the creation, modification, or destruction of a legal relation
4. R § 79 Mutuality: If the requirement of consideration is met, there is no additional requirement of mutuality or equivalence of value.
IV. Implied Contract
A. Based on the theory of unjust enrichment
B. To recover on a theory of quasi contract the Plaintiff must prove that the Defendant was enriched (received a benefit) and that the retention of the benefit without payment therefor would be unjust
C. Recovery = Restitution
D. Two Kinds:
1. Implied in Law: (Quasi Contract)
a. provides a remedy where none previously existed
b. a legal fiction = not a contract at all, law decides there is a contract
c. Doctrine of Necessaries: 1)food, 2)shelter, 3)clothing and 4)medical care
d. intentions of the parties mean nothing, may not have the consent of both parties
restitution/recovery/damages = a reasonable value