contracts outline

contracts outline - EXPECTATION DAMAGES How calculated o...

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EXPECTATION DAMAGES How calculated? o Lost profits + Reliance Expenditures o Overhead expenses ( fixed)( P’s advantage) o Cost of completion vs. Diminution in value Disproportionate ( cost of comp. > loss in value to P) Remedial work incidental to main purpose of K (Peevyhouse Economic Waste minor defect Construction K ‘destruction of built material/economically inefficiency’ o ) o Focus on economic waste ’deprives owner to get what he bargained for’ Willfulness/Bad faith Cost of completion not dim. value Punitive damages if bad faith/tort Emotional distress – handling of dead bodies, burial Construction K v. Non-construction K Construction K cost of completion Non construction K diminution in value Reasonable Certainty * P can only recover for losses which he can establish with “ reasonable certainty * Likely amount of profits not just that there would be profits o Profits from new business Speculative Similar previous business/experience in industry o Punish D not P for uncertainty D’s breach hard for P to establish lost profits o Profits depend on public Sporting/entertainment (Dempsey) Evidence of profits made from similar ventures o Cost of completion unknown Contractor uncertain of cost of comp. after D repudiates o Expectation damages: K price – cost of completion o UCC 2-715 Comment 4 No need for mathematical certainty but rather ‘reasonable under the circumstances” Forseeability o Consequential Damages Limits damages courts will award (Hadley v. Baxendale ) UCC 2-715 Can only recover damages if… 1. Arise naturally – forseeable by any reasonable person ( direct/general damages) 2. In contemplation of both parties when K was made( special/consequential damages) Mitigation - (Rockingham County v. Luten Bridge Co . ) o P reasonable efforts to mitigate ( expense/inconvenience/reputation/break other K) losses/expenses trying to mitigate can recover if reasonable o Personal Service K substantially different/inferior ( Parker v. 20 th Century Fox ) 1
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o Sales K : ( 2-706 & 2-712) UCC 2-706 & 2-712: aggrieved seller/buyer to act reasonably, in good faith, within reasonable time when making substitute transaction Buyer o UCC 2-715 bars buyer from obtaining cons. Dam. That could’ve been prevented o Cover $ - K$ + consq. $ (UCC 2-712(2)) Spike in price Seller ( less duty to mitigate) Resell –-> resell $- K $ [2-706(1)] Not resell –->market $ - K $ at place/time for tender [2-708(1)]OR lost profits Unable to resell [2-709(1)(b)] – customized goods 2-704: complete manufacture of specially ordered goods RELIANCE DAMAGES *Courts can award expenditures made in preparing to perform K & of actually part performance When used? o
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This note was uploaded on 07/14/2011 for the course CONTRACTS I taught by Professor Jacobson during the Summer '11 term at Yeshiva.

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contracts outline - EXPECTATION DAMAGES How calculated o...

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