Contracts I – Outline www.swapnotes.comPage 1 of 28 Professor Jacobson Fall 2004 CHAPTER 1-REMEDIES FOR BREACH OF CONTRACTSECTION 1-THE GOAL OF CONTRACT DAMAGESHawkins v. McGee-31)Dr. breached oral contract to give perfect or good hand 2)P PHRASE=K DAMAGES PUT THE PROMISE IN THE POSITION HE WOULD HAVE BEEN IN HAD THE PROMISSOR PERFORMED. (1)K damages look to the future hypothetical position he would have been in, while tort damages look to the position in the past and restore that position. 3)Three interests being considered in breach of K cases:i)1-reliance-$ lost for following K ii)2-restitution-$ gained by breaching party iii)3-expectancy-promised future condition 4)Sullivan v. O’Conner-7-Plaintiff was a professional entertainer, had two operations and both failed to enhance her beauty to improve her performance. Reliance measure of damages of $13,5000(1)court says if dr. had been negligent, even though claim is for breach of K, then give the patient K damages. If dr. wasn’t neg, just breach of K, then only give victim torts damages. (2)Law is not rigid and not always hard on dr- need clear and convincing evidence that K existed. Groves v. Wunder-121)Groves was over compensated b/c we know he will not use the $ to level the land. 2)Where $ damages were inadequate to compensate for the breach (P phrase), the remedy of specific performance is available. (1)Have to show market value does not reflect the value of the breach. (2)Advanced v. Wilkes-21-Ugly fountain-reduces land value. But that is what he was supposed to do, so victim gets cost of completion by another contractor. (3)Groves- $ damages overcompensated b/c wouldn’t have done it. 3)WHEN A CONSTRUCTION CONTRACT IS DEFECTIVELY PERFORMED (BREACHED)THEN THE MEASURE OF DAMAGES IS THE COST OF REMEDYING THE DEFECTÆ“REASONABLE COST OF PERFORMANCE.” 4)Coase Theorem-economic theory that Grove will never level the land. In a perfect market, where there are no transaction costs, changing the legal rule governing a certain transaction will not alter the equations of production ( that is to say, it will not cause a reallocation of productive resources) 5)EXPECTANCY COMES IN 2 FLAVORS: 2 WAYS TO PUT THE PROMISSEE IN POSITION HE WOULD HAVE BEEN HAD THE BREACHER PERFORMED. (a)Diminution of Market value= the difference between the value that the product contracted for and the value of the performance that was actually received, if construction and completion would involve unreasonable economic waste (b)Cost of Completion= the reasonable cost of construction and completion in accordance with the contract 6)Court awarded Cost of Completion probably because Wunder willfully breached (cost $60k to create $12K) 7)Peevyhouse v Garland Coal & Mining Co-19-no person can recover a greater amount in damages for breach of an obligation than he would have gained by the full performance.
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