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Chapter 15 Contracts: Breach and Remedies PowerPoint Presentation
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Chapter 15 Contracts: Breach and Remedies

Chapter 15 Contracts: Breach and Remedies

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Chapter 15 Contracts: Breach and Remedies

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  1. Chapter 15Contracts: Breachand Remedies

  2. Learning Objectives • What is the difference between compensatory and consequential damages? • What are nominal damages? • What is the usual measure of damages in a breach of contract? • When will rescission and specific performance be granted as remedies?

  3. Damages • Compensatory Damages: • Compensates injured party (Plaintiff) • Plaintiff must prove actual damages caused by breach. • Calculation of Amount: • Generally: difference between Defendant’s promised performance and actual. • Sale of Goods and Land: difference between the contract price and market.

  4. Damages • Consequential (Special) Damages • Foreseeable damages that result from breach of contract. • Caused by other than breach of contract. • Punitive (Exemplary) Damages • Deter wrongdoer; set example. • Nominal Damages

  5. Damages • Mitigation of Damages • Injured party has a legal duty to mitigate damages. • Liquidated Damages vs. Penalties • Liquidated: fixed, certain dollar amount agreed to by parties, paid in the event of breach. LD’s are enforceable. • Penalty: designed to penalize a party. Generally not enforceable.

  6. Rescission & Restitution • Rescission: cancel or undo a contract. • Available for fraud, mistake, duress and failure of consideration. • Restitution: recapture the benefit conferred on the defendant that has unjustly enriched her. • Parties must return goods, property or money.

  7. Specific Performance • Equitable Remedy granted when damages are insufficient remedy • Always unique property. • Requires performance in contract. • Not granted for personal services. • Advantage: No need to calculate damages

  8. Reformation • Parties imperfectly expressed their intentions. • Court re-writes the contract to reflect parties’ true intentions. • Usually applies most often to fraud or mutual mistake.

  9. Recovery for Quasi Contract • Quasi Contract is fictional, created to prevent unjust enrichment • Plaintiff must show: • Benefit was conferred on the other party. • Party conferring benefit expected to be paid. • Party seeking recovery did not volunteer. • Retaining benefit without payment would be unjust enrichment.

  10. Provisions Limiting Remedies • Limit damages for breach of contract or limit remedies to: • Replacement • Repair or • Refund of the purchase price • Exculpatory Clauses may not be enforced

  11. Election of Remedies • Usually, the non-Breaching party has several remedies available • Common law requires injured party to choose the remedy (what she wants) • Prevents double recovery