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Unformatted text preview: C ONTRACTS II Professor M. Kniffin St. John’s University School of Law Spring 2002 Remedies For Breach Specific Performance Requirements: 1. Money damages are not adequate to meet expectation damages Examples: • Requirements/Output contracts • Very difficult to cover (not necessarily unavailability of cover, extreme difficulty to cover may satisfy this requirement) • Uniqueness of the subject matter of contract (land, artwork, etc.) 2. Court would not be required to perform extensive supervision 3. Contract terms are clear enough for the court to issue an order • Violation of court orders is criminal offense, courts must be sure that their orders will not put parties into position when they perform under an unclear court order and risk criminal prosecution for not correctly following the order 4. Specific performance will not require the antagonistic parties to perform together • This requirement is generally applicable to personal, not commercial, parties. • In some cases courts will issue an injunction rather than ordering performance to get around this requirement. Example : Court will not force an employee in breach to work under the terms of contract, but will issue an order preventing the employee to work for anyone else Specific performance is an equitable relief , therefore: Even when all four requirements above are satisfied it is up to the court discretion to order the specific performance No jury Clean Hands Rule applies Court’s order to the buyer to pay contract price after the good were delivered is not specific performance – does not need to satisfy the four requirements Money Damages The general principle is that the expectations of the aggrieved party have to be protected by giving that party the benefit of the bargain . The usual remedy for the breach of contract is to put the aggrieved party in the position in which it would have been had the promise been performed by giving the money damages Jeff Goland Page 1 5/13/2009 Buyer’s Remedies (1) Specific Performance (2) Cover Damages – difference between the contract price and the amount spent by the buyer in excess of the contract price in buying substitute product UCC § 2-712 (1) requirement for cover damages: • Cover must be made in good faith • No unreasonable delay in obtaining cover • Cover must be in like goods UCC § 2-712 (2) provides that the buyer may recover “the difference between the cost of cover and the contract price together with any incidental and consequential damages . . . , but less expenses saved in consequence of the seller breach” The aggrieved party is not required to cover Once opted for cover damages buyer can not switch to market formula (3) Market Formula - difference between the market price that would have been paid had the breached party chosen to cover at the time of learning of the breach and the contract price UCC § 2-713 (1) provides that the buyer may recover...
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This note was uploaded on 02/15/2008 for the course LAW 2000 taught by Professor Kniffin during the Spring '02 term at St. Johns Duplicate.
- Spring '02