Contracts 2 Outline

Contracts 2 Outline - Contracts 2 w/Kniffin Outline...

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Contracts 2 w/Kniffin Outline Christina Nott Spring 2002 (Edited Version of Ben Neidl's) I. REMEDIES for Breach K damages are not punitive, but compensatory. Most provide expectation damages. Expectation - Put the aggrieved party in the position it would have occupied had the contract been fully performed. Reliance - Put aggrieved party in as good a position as if there had never been a K. (usu. get out of pocket and not lost profits) Restitution – Unjust enrichment – benefit which breaching party has received from other party’s performance. A. Specific Performance (rare, unusual) B. Money Damages (the norm) A. Specific Performance Requirements: (all must be met) 1. Money Damages are NOT ADEQUATE to give expectation. a. Uniqueness (ie: Mona Lisa) b. Damages cannot be calculated accurately (ie: Walgreen v. Sara Creek) c. Cover is difficult or unavailable (Klein v. Pepsi & Automobile cases) d. Land (always considered unique) 2. S.P. would not require too much supervision by the court. (Cts will not grant SP where they would have to supervise a lot. Ie: N.Deleware case, complex construction K; SP reqmt for more workers "impractical if not impossible.") 3. Clarity of terms must be such that a clear SP order could be written. 4. SP would not force antagonistic parties to work together (no involuntary servitude) B. Measuring Expectation 1. BUYER'S DAMAGES COVER: best way to meet expectation. When breach occurs, aggrieved buyer has the right to seek substitute goods. Cover is the difference b/t the K price and the larger cover price. Cts ask: Did the buyer cover? (substitute transaction?) YES: A. Party chooses to COVER : UCC 2-712. (Formula: Diff. b/t K price & cover price). IE: Laredo Hides case. B. Party does NOT choose to COVER : UCC 2-713. Party tx as if they DID cover @ time of learning of the breach. UCC uses MARKET PRICE @ time of breach. (Formula: Diff b/t K price & market price). Incidental Damages (2-715) Includes additional costs incurred after the breach in a reasonable attempt to avoid loss even if unsuccessful (expense of a broker in seeking a substitute or import/deliv prices). Consequential Damages (2-715) 1 Requirements of cover: (1) must be made in good faith (2) must be made without unreasonable delay (3) it must be any reasonable purchase If these requirements are not met then the court goes to the market price formula.
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These are chain reaction damages – may not be direct, but are an indirect result of the breach. Damages that flow naturally from breach or special damages. Other party to the K must be told that a particular type of damages will result (foreseeability). (ie: screwing up another K w/someone else) 2. SELLER'S DAMAGES (more than buyer's) 1. SP (K price assuming goods delivered) 2. Replevin 3. Money Dmgs. a. Resale Formula b. Market Price Formula c. Lost Profits RESALE : UCC 2-706. Diff. b/t K price & resale price No Resale: UCC 2-708. Diff b/t K price & market price @ time and place for tender (delivery date).
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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.

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Contracts 2 Outline - Contracts 2 w/Kniffin Outline...

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