BLRB18 - Business Law and the Regulation of Business...

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Unformatted text preview: Business Law and the Regulation of Business Regulation Chapter 18: Remedies Chapter By Richard A. Mann & Barry S. Roberts Topics Covered in this Chapter Topics A. Monetary Damages B. Remedies in Equity C. Restitution D. Limitations on Remedies Compensatory Damages Compensatory s Contract damages placing the injured party in Contract as good a position as he would have held had the other party performed; equals loss of value minus cost avoided plus incidental damages plus consequential damages. damages – Loss of Value – value of promised performance minus value of actual performance minus – Cost Avoided – loss or costs the injured party avoids by not having to perform avoids – Incidental Damages – arise directly out of a breach Consequential Damages – not arising Consequential directly out of a breach but arising as a foreseeable result of the breach foreseeable Other Damages Nominal Damages – a small sum awarded where a contract has been breached but the loss is negligible or unproved. unproved. s Reliance Damages – contract damages placing the injured party in as good a position as she would have been in had the contract not been made. made. s Damages for Misrepresentation Damages s s s s Benefit-of-the-Bargain Damages – Benefit-of-the-Bargain difference between the value of the fraudulent party's performance as represented and the value the defrauded party received. value Out-of-Pocket Damages – difference between the value given and the value received. received. Punitive Damages – are generally not not recoverable for breach of contract. recoverable Liquidated Damages – reasonable damages agreed to in advance by the parties to a contract. contract. Limitations on Damages Limitations s s s Foreseeability of Damages – potential loss Foreseeability that the party now in default had reason to know of when the contract was made. know Certainty of Damages – damages are not Certainty recoverable beyond an amount that can be established with reasonable certainty. established Mitigation of Damages – injured party may Mitigation not recover damages for loss he could have avoided by reasonable effort. avoided Remedies in Equity Availability – only where there is no adequate remedy at law. adequate s Types: s – Specific Performance – court decree Specific ordering breaching party to render promised performance. performance. – Injunction – court order prohibiting a party Injunction from doing a specific act. from – Reformation – court order correcting a written Reformation contract to conform with the original intent of the contracting parties. the Restitution Restoration of injured party to position Restoration she was in before the contract was made. s Available to: s – Party Injured by Breach – if other party breaches the contract by nonperformance or repudiation or – Party in Default – for any benefit conferred in excess of the loss caused by the breach the Restitution Statute of Frauds – if a contract is unenforceable because of the statute of frauds, a party may recover the benefits conferred on the other party in reliance on the contract. on s Voidable Contracts – a party who has Voidable avoided a contract is entitled to restitution for any benefit conferred on the other party. the s Limitations on Remedies s s Election of Remedies – if remedies are not inconsistent, a party injured by a breach of contract may seek more than one contract Loss of Power of Avoidance – a party with the power to avoid a contract may lose that power by: power – affirming the contract – delaying unreasonably in exercising the power of delaying avoidance avoidance – being subordinate to intervening rights of 3rd being parties parties Contract Remedies Contract Has the contract been breached? Yes Are legal remedies adequate? Yes Is there a provision for No reasonable liquidated damages? Yes Recovery of liquidated damages Legal Remedies are available Compensatory Damages Reliance Damages Restitution No No No Remedy Equitable Remedies may be available ...
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