Transcript Chapter 15 Contracts: Breach and Remedies Learning Objectives What is the difference between compensatory and consequential damages? What are nominal damages? What is the usual measure of.

Chapter 15
Contracts: Breach
and Remedies
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?
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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.
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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
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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.
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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.
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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
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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.
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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.
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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
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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
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