Contracts II - Expectation Damages Pol: Non-breaching party...

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Expectation Damages Cost of Comp. v. Δ in Market Val. Excuse of Condition Pol: Non-breaching party entitled to benefit of bargain; to be situated as if no breach . (Direct and Consequential Loss of Bargain) + (Reliance Costs) – (Avoidable Costs) – (Loss Avoided from Breach). Direct – foreseeable, cause, calculable Consequential – foreseeable, cause, calculable Cost of Completion : -Use when lower than Δ market val. OR -When performance is central to K; OR -Breach is intentional OR ( pol: breacher shouldn’t determine ) -Completion woudn’t req gross waste -Pol: give peeps idiosyncratic value sought Δ in Market Val . -Incidental OR unintentional AND waste - Pol: Avoid giving windfalls for “completion” of things no longer worth it -Forfeiture : excuse to condition enforcement of which would result in harsh deprivation or windfall -Materiality : can’t be material (ct may fudge) -Fault : SPLIT: some no fault; others only negligenc -Impact : SPLIT: some require NO impact to non- breacher; Others balance impacts - Pol: discourage rent seeking (money for nothin’) -Wrongful Prevention : bad faith avoid/prevent condit. -Estoppel : reliance on other party saying cond. Met -Waiver : Wvr of immaterial condition by party owed -Waiver of material cond. req’s consideration Consequential Damages Foreseeable w/in reasonable contemplation of both parties, @time of K - Pol: Limitation allows for efficient breach, -want peeps to breach if cost of performance is higher than expected benefit to both parties -Criticism: Eff.Brch doesn’t see non-econ factors; imperfect info; marginal cost of breach may subsume savings Causation – Proximate Calculation – must be reasonably calculable
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