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Contracts
West Virginia University School of Law
Roberts, Caprice L.

 
Contracts Outline
Roberts
8:30-9:45 M/W/F
Contract(K): (elements)
1. Offer
2. Acceptance
3. Consideration
4. Legal Matter
5. Legal Age (18+) (majority and capacity)
 
Breach of K: violation of K obligation, by failing to perform promise or by interfering w/ another party’s performance.
 
Prima Facie(L) “meeting the elements.”
 
Cause of Action(COA): “right” to bright suit.
 
Damages: relating to monetary compensation for loss or injury to a person or property. Contractual damages are NOT about punishing, but making a contract dispute “whole.”
 
Restitution Interest: prevention of unjust enrichment of promisor at the expense of the promisee; $ determined by MV, K deemed invalid; do not look to K$. ∆ must have requested services.
                        Quantum Meruit(L) “as much as deserved.” Reasonable value.
 
Reliance Interest(L) “returning to the status quo ante.” Recovering out of pocket expenses. “Puts promisee in as good a position as he was in before promise was made.” Reliance damages usually > restitution b/c they are reimbursed whether or not they benefit ∆. Reliance usually less than expectancy b/c profits are ignored in the calculation of reliance damages.
 
Expectancy Interest: realizing value of expectancy created by another’s promise. “In as good a position as he would have occupied had the defendant performed his promise” Preferred by the courts. Benefit of Bargain (BOB).
EX:Hawkins v. McGee
                              Value Promised
                            – Value Performed
                             $Amount of Damages
 
In any BOK case, always raise ALL $ (Expectancy, Reliance, Restitution), and Remedies in Equity (specific performance); weigh options with $; think of best/worst case scenarios.
 
Diminution: process of removing or taking away.
 
Jury Instructions: Judge defines the applicable rule to the jury (who decides facts).
 
Remedy: “cure the ill.” Legal “fix” for what went wrong (civil or criminal).
 
Foreseeability: ability to reasonably predict future events.
 
Bench Trial: decided by a judge.
 
Jury Nullification: disregarding the law in favor of their own opinions or interpretations, instead of purely deciding the facts (often through compassion for ∏ or ∆).
 
English Rule: loser pays all attorney/court fees.
American Rule: parties pay their own fees.
 
Disposition:
 
Liability for breach of contract is strict (little or no defense).
The U.S. Constitution affords all citizens the right to a trial by jury in civil cases.
In a contract, facts can be relied on, not opinions (estimates or puffery).
 
Conversion: changing from one form to another; being exchanged.
 
“Gross” Negligence: reckless disregard; a conscious, voluntary act of negligence.
 
Punitive/Exemplary Damages: special money sanctions, VERY rare under Contract Law.
 
Efficient Breach: breach of K benefiting defaulter.
 
Goals of Contract Law:
Compensation
            NOT to punish
            Expectancy
            Benefit of Bargain (to ∏)
            ∆ Intent
Damages
Hawkins v. McGee
Expectancy Damages:            Value Promised
                                                – Value Performed
                                                = $ Damages
Example K: Waltz will paint one room for Roberts, who will pay $200 upon completion.
1. Waltz spends $72 in materials to complete contract.

“stop.”
 
Promissory Estoppel: application of the estoppel principle to a promise of future action.
Louise Caroline Nursing Home v. Dix Construction(compensable damages)
∆ K build ∏ nursing home ∏; ∆ BOK before completion; ∏ seeks compensable damages under “benefits of the bargain.” ∏ “suffered no compensable damages as a result of the ∆’s BOK; cost to complete the nursing home was w/in K price less what had been paid to ∆.”
 
IF K$ – $paid to ∆ > cost to complete K THEN $damages = $0. No extra “benefits of its bargain” paid; they would unjustly enrich ∏ (if K can be completed under original K$).
 
Fair Market Value: value of service or goods @ time of breach.
“Cost of Completion:” $ needed to fulfill K and “make K whole.”
Rockingham County v. Luten Bridge(expectancy limitations/ mitigation of damages)
Should ∆ be allowed to recover for completing K even after termination? ∆ “had no right, by persisting in the work, to make the penalty greater than it would otherwise have been” (duty to mitigate damages).
 
Non-defaulting party must do nothing to increase damages flowing from BOK upon notice. Expectancy Damages do not punish, but only exist to make ∏ whole. This case shows the LIMITS.
 
Mitigation of Damages(duty to mitigate): once BOK occurs, non-breaching party may do nothing to aggravate (increase) damages flowing from that breach.