Remedies Flow Chart

Remedies Flow Chart What did P seek to gain from the contract/performance? value? Intangible benefits to argue for specific relief? Difficult to calculate like Epstein’s research assistant hypo? Limiting $ damages: Avoidable loss? Avoided costs? Unforeseeable loss? Uncertain loss? UCC

Remedies

Equitable – when remedy at law is inadequate** §360

Legal DAMAGES

Remember, theme is to compensate P for its loss, not punish D, not reward P

Argue efficient breach for ct to provide substit remedy rather than specific relief?

SPECIFIC RELIEF

Injunction 357(2) Is there a liquidated Damages Clause in the contract? §356

Walgreen: usually needs to show injunction but if temporary, just show was inadequate

Yes No

awarded ONLY if:  Contract is clear (can k away?!)  Seek intangible benefits  Difficult to find substitutes §360(b)  Difficult to calculate damages with reas. Certainty §360(a)  Uniqueness makes it imposs to assess damages §2-716(1)

Are liquidated damages fair estimate of expectation damages? Cf. O’brian; Reasonable? Under UCC2-718 Leerjet No Look to Expectation Damages which are benefit of bargain, intended to put victim where would be if k had been performed §345: Are they either:  $0 or negative in amount;  Uncertain (i.e., new venture) Hollywood; or  Excessive given circumstances? No

Expectation Damages awarded to put victim where he would be had contract was performed. (general expec, incidental=natural/direct costs, consequential [not always. Cf. RoC 351 Hadley – needs to have been communicated. /UCC 2-715(2) Heim x-ray case – Consequential damages not recoverable if reasonably can prevented by cover, but doctor ok b/c relied on seller’s promises to fix. Don’t say “foreseeable consequential cost” for UCC, but ok in RoC case]**) Cf. Panorama (defective roof, P showed new would be cheaper than repair, so cost of replacement) - reasonable $ of completing performance - remedying defects (O.W.Grun color roof, fixing wouldn’t solve issue so new roof cost) - could ask repair $, new roof, new roof $ Cf. Hawkins’s diminution in value (promised- now). Peevy: where breach incidental and full performance work would give disproportionate econ benefit to P, damage is diminution in $ instead of $ of completion)

Specific Performance 357(1)

Yes

Court will enforce liquidated damages

(land lease Van wagner says its not uniqueness but uncertainty in calculating damages/finding substitute)

Shouldn't be too high vs. freedom to contract

Yes

Reliance damages awarded to put victim he would be had the contract never been made. 349/2-715(1) If jx treats PE as 17(2) contract, may award expec damages. But In jx that doesn’t treat PE as K law, may only give reliance instead of expec damages. These can include:  Cost of preparation/performance minus breaching party’s showing w/ reasonable certainty that non-breaching party would have incurred had K performed (avoided costs)  Difference between market $ and value as is

NOTE:  Can’t be disproportionate to probable loss in value of property (PeevyHouse)  No punitive damages Peevy’s Economic benefit test: If construction /bdg contract, if defect can be repaired without undue expense, cost of performance is proper measure of damages, but if defect can’t be remedied without cost disproportionate to the end to be attained, diminution in value rule

Contracts Page 1