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George Mason School of Law

George Mason School of Law. Contracts II Reliance/Restitution/Punitives This file may be downloaded only by registered students in my class, and may not be shared by them F.H. Buckley fbuckley@gmu.edu. Next day. This week. Reliance Restitution Punitives Lost-volume seller.

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George Mason School of Law

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  1. George Mason School of Law Contracts II Reliance/Restitution/Punitives This file may be downloaded only by registered students in my class, and may not be shared by them F.H. Buckley fbuckley@gmu.edu

  2. Next day

  3. This week • Reliance • Restitution • Punitives • Lost-volume seller

  4. The measure of damages • If damages are meant to compensate for a wrong, just what is the wrong? • Failure to perform: Expectation damages • Inviting detrimental reliance: reliance damages

  5. The interplay of the measures of damages • When might reliance damages exceed expectation damages? • When might damages be limited to the reliance measure?

  6. Could reliance damages exceed the expectation measure? • When would a Π want more than expectation damages?

  7. Could reliance damages exceed the expectation measure? • When would a Π want more than expectation damages? • Bad bargains

  8. Could reliance damages exceed the expectation measure? • When would a Π want more than expectation damages? • Bad bargains • Restrictions on the expectation measure • Uncertainty • Forseeability

  9. The measure of damages • When would the Π prefer reliance damages? • Should the Π have the option in such cases?

  10. Freund at 95 • Semble reliance damages not to exceed the expectation interest, or else a windfall

  11. When should the Π be limited to reliance damages?

  12. When should the Π be limited to reliance damages? • Contracts with Physicians • Hawkins v. McGee at 892

  13. When should the Π be limited to reliance damages? • Hawkins v. McGee at 892 • Was the doctor negligent?

  14. When should the Π be limited to reliance damages? • Hawkins v. McGee at 892 • Was the doctor negligent? • Had he been negligent, what would the damages have been?

  15. When should the Π be limited to reliance damages? • Hawkins v. McGee at 892 • Was the doctor negligent? • Had he been negligent, what would the damages have been? • Return of doctor’s fee • Pain and suffering from the operation • Difference between the before-and-after hand

  16. When should the Π be limited to reliance damages? • Hawkins v. McGee at 892 • Was the doctor negligent? • In short, reliance damages • Return of doctor’s fee • Pain and suffering from the operation • Difference between the before-and-after hand

  17. When should the Π be limited to reliance damages? • Hawkins v. McGee at 892 • What did the court award?

  18. When should the Π be limited to reliance damages? • Hawkins v. McGee at 892 • What did the court award? • The difference between the hand as promised and the hand after the operation less the doctor’s fee

  19. When should the Π be limited to reliance damages? • Hawkins v. McGee at 892 • What did the court award? • The difference between the hand as promised and the hand after the operation less the doctor’s fee • I.e., The expectation interest

  20. Why a different result in Sullivan v. O’Connor at 890?

  21. Why a different result in Sullivan v. O’Connor at 890? • What did the judge instruct the jury?

  22. Why a different result in Sullivan v. O’Connor at 890? • What did the judge instruct the jury? • Out of pocket expenses incident to the operation • Damages for the way in which the nose was made worse • Pain and suffering for the third operation • Loss of earnings too uncertain

  23. Why a different result in Sullivan v. O’Connor at 890? • What didn’t the Π ask for the difference between the nose as promised and delivered?

  24. Why a different result in Sullivan v. O’Connor at 890? • What didn’t the Π ask for the difference between the nose as promised and delivered? • Was this really a case which denied the expectation measure?

  25. Why a different result in Sullivan v. O’Connor at 890? • What didn’t the Π ask for the difference between the nose as promised and delivered? • Can one generalize this to all non-commercial cases, as Fuller and Perdue argue at 894?

  26. Why a different result in Sullivan v. O’Connor at 890? • What didn’t the Π ask for the difference between the nose as promised and delivered? • Can one generalize this to all non-commercial cases, as Fuller and Perdue argue at 894? • What is the link between Pond v. Harris and Smith v. Sherman in n. 6?

  27. Why a different result in Sullivan v. O’Connor at 890? • What didn’t the Π ask for the difference between the nose as promised and delivered? • Could a court award damages for pain and suffering and emotional distress in contract?

  28. The measure of damages • Kizas v. Webster Robert Stack as Eliot Ness

  29. The measure of damages • Kizas v. Webster • The FBI invited college graduates to work as clerical staff because of the possibility of receiving preferential consideration as special agents

  30. The measure of damages • Kizas v. Webster • The FBI invited college graduates to work as clerical staff because of the possibility of receiving preferential consideration as special agents • The FBI stopped the program in 1977 because (1) they weren’t getting qualified people, and (2) the FBI wanted to institute an affirmative action program.

  31. The measure of damages • Kizas v. Webster • So what do you think of the takings argument?

  32. The measure of damages • Kizas v. Webster • So what do you think of the takings argument? • Reversed on appeal

  33. The measure of damages • Kizas v. Webster • So what do you think of the takings argument? • If it would succeed, what kind of damages?

  34. The measure of damages • Kizas v. Webster • So what do you think of the takings argument? • If it would succeed, what kind of damages? • What are the problems with expectation damages here?

  35. The measure of damages • Kizas v. Webster • So what do you think of the takings argument? • If it would succeed, what kind of damages? • What are the problems with expectation damages here? • Uncertainty • FBI’s right to terminate

  36. The measure of damages • Kizas v. Webster • So what do you think of the takings argument? • If it would succeed, what kind of damages? • Do expectation damages place a ceiling on reliance damages?

  37. The measure of damages • Kizas v. Webster • So what do you think of the takings argument? • If it would succeed, what kind of damages? • Do expectation damages place a ceiling on reliance damages? • Albert v. Armstrong at 901

  38. The measure of damages • Kizas v. Webster • So what do you think of the takings argument? • If it would succeed, what kind of damages? • Do expectation damages place a ceiling on reliance damages? • Albert v. Armstrong at 901 • What might have given Armstrong the option to sue for reliance damages, and how were they limited?

  39. The measure of damages • Kizas v. Webster • So what do you think of the takings argument? • If it would succeed, what kind of damages? • Do expectation damages place a ceiling on reliance damages? • Yes—but no proof that a bad bargain and onus was on the FBI

  40. The measure of damages • Kizas v. Webster • So what do you think of the takings argument? • If it would succeed, what kind of damages? • So what are the reliance damages?

  41. The measure of damages • Kizas v. Webster • So what do you think of the takings argument? • If it would succeed, what kind of damages? • So what are the reliance damages? • The difference between what they received as FBI employees (and for a year afterwards) and what they would have received in the labor market, plus dislocation

  42. Reliance damages and uncertainty of the expectation • The expectation interest is sizable but uncertain • The expectation interest is likely trivial but uncertain Cf. Restatement 349, Comment a

  43. Reliance damages and uncertainty of the expectation • Wartzman v. Hightower at 901

  44. Reliance damages and uncertainty of the expectation • Wartzman v. Hightower at 901 • Why a problem with expectation damages?

  45. Reliance damages and uncertainty of the expectation • Anglia v. Reed 902 Robert Reed, The Brady Bunch

  46. Anglia v. Reed • What was the problem with expectation damages? • If expectation damages are speculative, could any reliance damages be awarded?

  47. Anglia v. Reed • What was the problem with expectation damages? • If expectation damages are speculative, could any reliance damages be awarded? • Both pre- and post-contract reliance damages awarded

  48. Restitution or Unjust Enrichment • A general principle of restitution out of Quasi Contract, Money had and received, breach of fiduciary duty

  49. Bailey v. West • When is quasi-contractual liability imposed? • Benefit conferred on defendant by plaintiff • Appreciation by defendant of the benefit • It would be inequitable to permit the defendant to retain the benefit

  50. Restitution • Bailey v. West p. 5 • What should the Πs have done with the horse? • No recovery for officious intermeddler

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