1. Chapter 5: Remedies for Breach
a. Specific Relief
i. Personal services
1. no specific performance for personal services, too hard to judge, difficulty of compelling continued relationships after a lawsuit
2. injunction more likely, but damages still best
a. unique or extraordinary
b. common for sports stars
ii. clean hands, have them when you come to equity
iii. specific wins
1. horse trained by cowboy sparrow, unique value
2. limited edition Corvette
3. car after WWII
4. construction K with conveyance attached
iv. money wins
1. no room for sentimental value, at least to an unwarranted unusual extent,
2. Italian opera singer’s K
a. But see Prussian singer, who was simply injunctioned to not sing elsewhere
3. Delayed construction K (personal services)
v. Causation: may be a requirement for expectation damages, if there’s no alternative product, the bald guy would have been bald anyway
vi. policies
1. for specific
a. Farnsworth on K: it’s the Modern trend
b. Court doesn’t have to figure out worth of stuff
c. Right to contract
2. Against specific
a. Posner efficient breach/valuable allocation of resources
i. Balance pros cons, if even, injunction looses
ii. judges need to be accurate to be efficient policy
b. concerns Laclede
i. no mutuality- no such requirement (that either could win it)
ii. cost of supervision
1. ignored for sake of public policy—prison, constitutional rights
iii. indefinite and uncertain
1. 10-15 years reasonable
vii. UCC
1. Buyer, § 2‐716
a. unique
b. proper circumstances
i. comment two inability to cover
ii. normally goods are fungible
1. not true when the good is unique
c. Klein, the increased cost of replacement does not merit specific performance
viii. Common law
1. § 357 – 359
2. §‐360; three exceptions
a. difficulty in proving damages with reasonable certainty
b. difficulty in procuring substitute
c. likelihood that an award could not be collected
d. § 367 personal services never ever
2. calculating damages
a. Common law damages
i. 344; 347
ii. mathematics
1. Loss of expected return performance
a. Expectation – amount received = damages
2. Other loss
a. Physical harm to person or property
b. expenses incurred during salvage attempt
c. cost of storage
3. cost avoided
a. beneficial effect on the injured party
b. (cost avoided) = (cost of complete performance – reliance)
c. overhead is not “avoided” by pro rata amount by the breach of K, conpare 2-708(2) which includes overhead for a loss volume seller
d. “collateral source” rule deducts collateral, (unemployment) from tort recovery, and split on whether to deduct K winnings.
4. loss avoided
a. reallocation of newly available resources
5. the equation
a. loss in value + other loss – cost avoided – Loss avoided
iii. buyer’s remedies seller’s breach
1. no common law right to recover based on cost of cover, damages are calculated instead from the market price. So have fun in court with that.
iv. Contractor’s breach sub’s remedy
1. restitution, forgoing recovery on the K
2. The impact of quantum meriut is to allow a promisee to recover the value of services he gave to the defendant irrespective of whether he would have lost money on the contract and been unable to recover in a suit on the contract. The measure of recovery for quantum meruit is the reasonable value of the performance see section 347
3. contract price as ceiling? Even if reasonable value exceeds it? Debated.
b. UCC
i. § 2‐711 Buyer’s remedies Seller’s breach
1. in general
a. §2-711
i. fails to deliver, repudiates (§2-610 anticipatory), rightfully rejects, revokes acceptance, may cancel and also get money back
1. cancel, recover damages, & cover and go to §2-712
a. (a code innovation)
2. elect not to cover, no delivery, §2-713 market damages (or buyer’s cover was unacceptable)
a. Damages = market price – K price + incidental and Consequential damages – expenses saved in consequence of breach
b. majority
i. Market dama
tionate standard
2. Kent
a. Grossly and unfairly disproportionate damages will not be given, difference in value
b. Liable for frustrating the purpose of a K
i. purpose to be served
ii. the desire to be gratified
iii. the excuse
iv. the cruelty of enforced adherence
2. Groves v. John Wunder
a. Willfully and fraudulently breaches, cannot sue under K and get substantial performance
3. peevyhouse
a. 346
i. cost of performance is the rule but should not be awarded where the provision breached was incidental to the contract and the cost of performance would be grossly disproportionate.
ii. difference in value should only be awarded to avoid unreasonable waste
4. McCormick, more friendly
a. cost of performance should be the rule if it can be cured without undue expense, given out less than in r 2nd
b. if the expense to fix it is grossly disproportionate to the end attained, go by value rule
b. ucc
i. windfalls
1. naval (not the ucc)
a. without tortuous conduct would tend to punitive
b. consistent with the R2nd, 355 & 356
2. tongish
a. majority
i. Market damages even in excess of actual loss
ii. discourages breach
iii. appropriate for willful breach
b. Minority
i. reduce market values to Plaintiff’s loss
ii. less punitive
iii. works better for accidental breach
3. 2-713 comment 5, no windfalls for buyers, market price damages apply only when buyer has not covered
ii. UCC
1. commercially reasonable misjudgment is permitted when deciding whether to scrap 2-705, resale 2-706
2. 2-715(1) consequentials “not avoidable by cover”
iii. tongish
