I. Remedies for Breach
A. Remedies for breach of K are designed to provide relief to the aggrieved party.
Four fundamental assumptions made by cts enforcing promises:
a. Relief of promisee is to redress breach
b. Relief granted to promisee should attempt to put promisee in the position they would have been in had the promise been performed
c. The appropriate form of relief is substitutional rather than specific.
d. Punitive damages cannot be awarded for a breach of K
B. Nature of Relief: Generally, relief for breach of K is either specific, as when it secures to the promisee that which was promised, or substitutional, as when it gives something as a substitute for that which was promised.
a. Equitable relief- If money damages cannot adequately compensate the aggrieved party and the determination of damages would be too speculative, it may be appropriate for the court to grant equitable relief.
i. Specific performance- generally only granted when damages are inadequate to put you in the same place you would have been in had K been performed and the goods or item is unique (inability to replace in the marketplace)
UCC 2-716- Specific performance for the buyer- specific performance may be decreed when the goods are unique.
Unique: land, art, limited edition autos, antiques.
Note: Scarcity is seldom enough characteristic to warrant SP
Counter-arg: If there’s any way that the person could get another item like the desired item, then you could argue that it’s not sufficiently unique. Cts are more prone to offer SP when the ct finds it difficult to determine damages.
ii. Injunction- an injunction directs a party to refrain from doing a particular act. The classic illustration of the use of an injunction in a K case involves the employee who has breached an employment K. In this situation, the ct will rarely award specific performance, since, among other difficulties, ordering the employee to perform smacks of involuntary servitude. What the ct. will often do, however is to prevent the employee from working for a competitor.
Benefits of substituting an injunction for damages:
1st it shifts the burden of determining the cost of the D’s conduct from the ct to the parties. Thus, both parties could agree on an amt. for dissolving the injunction.
Costs of substituting an injunction for damages:
Bi-lateral monopoly- arises when 2 parties can only deal w/ each other. Continuous supervision of the 2 parties is costly
K price-market price for seller; market price-k price for
(incidentals and consequentials)-Cost avoided-Loss avoided
a. Incidentals-those things that go along with performance; ancillary to performance itself (phone costs, overhead, shipping-fosters performance but not part of performance)
b. Consequentials-not part of deal or performance but comes as a result of performance (loss profits)
c. Avoided Costs and Losses-often incidental; not having to go get car, etc.
d. Have to account for part performance: loss of value + incidentals and consequentials + costs expended-costs avoided.
(1) Loss in Value- Difference b/t the value to the injured party of performance that should have been received & the value of what was actually received.
a. Loss in value is measured by:
i. K value
ii. FMV of product/work
iii. Difference in Value
(ex-if he does not sell you the 68 volvo-the difference would be what he had to pay from what Barnes was going to sell it for)
b. Examples of Loss in Value: