BUS311_chapter_06

BUS311_chapter_06

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Unformatted text preview: ving intentional and egregious breaches. The purpose of punitive damages is to incentivize the defendant and others in a similar position to not act this way in the future, as well as to punish this defendant for the present behavior. Example 6.18. Ralph, famous consumer rights attorney, bought a reserved seat for a specific flight on Alpha Airlines. Alpha never disclosed that they were overbooking (selling more seats than were on the flight). When Ralph checked in for the flight, Alpha said there was no more room on the plane. Ralph sued, and won. Because Alpha had placed him on another flight that left only 40 minutes later, he was awarded just $1 in nominal damages, since he didn’t seem to have suffered economic harm. However, because the court felt that Alpha was acting fraudulently with this nondisclosure practice, and because the court felt that Alpha and other airlines needed to be more honest in their dealings with consumers, Ralph was also awarded $1 million in punitive damages. Specific Performance There are instances in which money damages are simply not sufficient compensation in an action for breach of contract. In such situations, a court has the power to force the breaching party to actually perform the contract as promised. For a party to successfully seek specific performance as a remedy, she must show that the following circumstances exist: 1. The subject matter of the contract is unique, and a replacement is not readily obtainable; 2. Money damages would not properly compensate the nonbreaching party for her loss. Contracts for which courts typically award specific performance include real estate and contracts involving the sale of art, antiques, and other rare commodities that are unique or very difficult to replace. No two pieces of real estate are the same, even though they may be of similar value and location, and the same holds true for artwork, rare coins, rare stamps, antiques, and similar articles. Personal service contracts, however, are not...
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This test prep was uploaded on 04/09/2014 for the course BUS 311 taught by Professor Parker during the Spring '10 term at Ashford University.

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