BUS311_chapter_06

Project billboardassociated press 102612 537 pm

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Unformatted text preview: 1 attacks in New York City). Project Billboard disagreed that the sign violated the contract. The lawsuit was settled when both parties agreed to substitute a dove, the symbol of peace, for the bomb. Project Billboard/Associated Press 10/26/12 5:37 PM Section 6.3 Remedies for Breach CHAPTER 6 contract by rendering the promised performance. Specific performance is only awarded in exceptional cases where money damages would not properly compensate the victim of a breach. The specific remedies are examined in greater detail below. Damages An award of compensatory damages is the most commonly available remedy to the victim of a breach. It is a money award meant to place the nonbreaching party in the same condition he would have been in had the breaching party performed as agreed. Compensatory damages include the cost of curing the breaching party’s defective performance, as well as the cost of any damages suffered by the nonbreaching party that were caused directly by the breach and should have been foreseeable to the breaching party. The following example will illustrate: Example 6.17. Makeesha contracts with Darren to renovate her club. The agreement calls for Darren to finish the work within 30 days of the contract signing. At the end of the 30-day period, Darren has not finished the work and can give no assurance as to when he will be able to complete it. Makeesha is unable to open the club on time and must pay $5,000 to The Screaming Knees, a new group she’d contracted to play at the club’s previously scheduled reopening day. She can also prove that she will lose $2,000 per day in lost profits based on her profits prior to the renovation, and had to pay $7,000 to Jane’s Contracting Co. to finish the work. (Jane’s was the lowest price estimate from three contractors who provided written estimates to complete the work.) Makeesha’s compensatory damages in the above example include the cost of having the new contractor finish the work, as well as all other foreseeable expenses that resulted directly from the breach and were cau...
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