Contracts II Reliance/Restitution/Punitives George Mason School of Law
Download
Report
Transcript Contracts II Reliance/Restitution/Punitives George Mason School of Law
George Mason School of Law
Contracts II
Reliance/Restitution/Punitives
F.H. Buckley
[email protected]
1
The measure of damages
If damages are meant to compensate
the innocent party for the wrong done
him, what is the wrong when the
other party breaches?
Failure to perform: Expectation damages
Inviting detrimental reliance: reliance
damages
2
The measure of damages
When would the Π prefer reliance
damages?
3
The measure of damages
When would the Π prefer reliance
damages?
Whenever these exceed the expectation
award
4
The measure of damages
When would the Π prefer reliance
damages?
Whenever these exceed the expectation
award
Limits on expectation damages
Uncertainty
Foreseeability
Or bad bargains?
5
The measure of damages
When would the Π prefer reliance
damages?
Whenever these exceed the expectation
award
Should the Π have the option in such
cases?
6
Freund
What are the three kinds of damages
that are considered?
The Expectation Interest
The Reliance Interest
Semble not to exceed the expectation
interest, or else a windfall
7
The measure of damages
When should the Π be limited to
reliance damages?
8
The measure of damages
When should the Π be limited to
reliance damages?
Contracts with Physicians
Hawkins v. McGee
9
The measure of damages
When should the Π be limited to
reliance damages?
Contracts with Physicians
Hawkins v. McGee
10
The measure of damages
When should the Π be limited to
reliance damages?
Contracts with Physicians
Why a different result in Sullivan v. O’Connor?
11
The measure of damages
When should the Π be limited to
reliance damages?
Contracts with Physicians
Hawkins v. McGee
Why a different result in Sullivan v. O’Connor?
What would the two measures give?
What difference in pain and suffering claims?
12
The measure of damages
When should the Π be limited to
reliance damages?
Contracts with Physicians
Hawkins v. McGee
Why a different result in Sullivan v. O’Connor?
What would the two measures give?
What difference in pain and suffering claims?
Is this available in commercial cases?
13
The measure of damages
When should the Π be limited to
reliance damages?
Contracts with Physicians
Hawkins v. McGee
Why a different result in Sullivan v. O’Connor?
What would the two measures give?
What would restitution give?
14
The measure of damages
Kizas v. Webster
Robert Stack as Eliot Ness
15
The measure of damages
Kizas v. Webster
The FBI attracted college graduate 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.
16
The measure of damages
Kizas v. Webster
So what do you think of the takings
argument?
17
The measure of damages
Kizas v. Webster
So what do you think of the takings
argument?
Reversed on appeal
18
The measure of damages
Kizas v. Webster
So what do you think of the takings
argument?
If it would succeed, what kind of damages?
19
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?
20
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?
Uncertainty
FBI’s right to terminate
21
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?
22
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.
23
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?
So what they get is 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
24
Anglia v. Reed 902
Robert Reed, The Brady Bunch
25
Anglia v. Reed
What was the problem with
expectation damages?
26
Anglia v. Reed
What was the problem with
expectation damages?
If expectation damages are
speculative, could any reliance
damages be awarded?
27
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
28
Restitution
The forms of action:
Trespass
Action on the case
Negligence
Assumpsit
Quasi Contract
Money had and received
29
Restitution or Unjust
Enrichment
A general principle of restitution out
of Quasi Contract, Money had and
received, breach of fiduciary duty
Based on Δ’s unjust retention of a
benefit as against Π, and not on Π’s
reliance losses.
30
Restitution
Suppose that, without asking you
permission, I put orange aluminum
siding on your house. Can I recover
the cost of doing do from you?
31
Restitution
Bailey v. West p. 5
What should the Πs have done with the
horse?
32
Restitution
Bailey v. West p. 5
What should the Πs have done with the
horse?
Restitutionary remedies are available in
spite or the absence of consent—but not
if the Π is an officious intermeddler
33
Restitution
Bailey v. West p. 5
What should the Πs have done with the
horse?
Restitutionary remedies are available in
spite or the absence of consent—but not
if the Π is an officious intermeddler
If not, see Leebow at p. 911
34
Restitution
Bailey v. West p. 5
What should the Πs have done with the
horse?
Restitutionary remedies are available in
spite or the absence of consent—but not
if the Π is an officious intermeddler
But that problem doesn’t arise when
restitution is sought as a remedy in
contract
35
George Mason School of Law
Contracts II
Reliance/Restitution/Punitives
F.H. Buckley
[email protected]
36
Zara Contracting
37
Tri-cities Airport, Endicott NY
Zara Contracting
Zara contracts with US gov’t to build
an airport
Zara subcontracts the entire job to Π
Two months after Π begins work,
Zara wrongfully fires it and finishes
the job itself.
38
Zara Contracting
Two months after Π begins work,
Zara wrongfully fires it and finishes
the job itself.
What can Π recover?
Value of work done at contract rate?
39
Zara Contracting
Two months after Π begins work,
Zara wrongfully fires it and finishes
the job itself.
What can Π recover?
Value of work done at contract rate?
Quantum meruit for value of work done
(more than contract rate as the work was
harder than expected)?
40
Zara Contracting
Two months after Π begins work,
Zara wrongfully fires it and finishes
the job itself.
What can Π recover?
Value of work done at contract rate?
Quantum meruit for value of work done
(more than contract rate as the work was
harder than expected)?
What was the benefit unjustly retained by
Zara?
41
Zara Contracting
Two months after Π begins work,
Zara wrongfully fires it and finishes
the job itself.
Quantum meruit for value of work done
(more than contract rate as the work
was harder than expected)?
Contrast Palmer Construction at 909
Qu. Breachers vs. non-breachers
42
Zara Contracting
Two months after Π begins work,
Zara wrongfully fires it and finishes
the job itself.
Quantum meruit for value of work done
(more than contract rate as the work
was harder than expected)?
Contrast Palmer Construction at 909
Qu. Breachers vs. non-breachers
Britton v. Turner?
43
Ventura v. Titan 910
Gov. Jesse Ventura (Ind. MN)
44
Ventura v. Titan
If Ventura had bargained for $X in
royalties, could he recover more than
this in quantum meruit?
45
Ventura v. Titan
If Ventura had bargained for $X in
royalties, could he recover more than
this in quantum meruit?
Is this consistent with Zara?
46
Can restitution damages exceed
expectation damages?
Britton v. Turner 906
What would expectation damages
amount to?
47
Can restitution damages exceed
expectation damages?
Britton v. Turner
What would expectation damages
amount to?
Unlike Zara, Π is in breach here
48
Can restitution damages exceed
expectation damages?
Britton v. Turner
What would quantum meruit give the Π?
49
Can restitution damages exceed
expectation damages?
Britton v. Turner
What would quantum meruit give the Π?
Aliter a temptation to strategic behavior
by the employer?
50
Can restitution damages exceed
expectation damages?
Britton v. Turner
What would quantum meruit give the Π?
Aliter a temptation to strategic behavior
by the employer?
Can the employer bargain around this?
51
Can restitution damages exceed
expectation damages?
Britton v. Turner
What would quantum meruit give the Π?
Aliter a temptation to strategic behavior
by the employer?
Can the employer bargain around this?
“It is easy, if the parties so choose…”
52
Do damages undercompensate?
The American rule of costs chills
meritorious actions (and encourages
frivolous ones)
Small dollar claims might not be
brought
But class actions remedy this
And then some?
53
Do damages undercompensate?
If they do, an argument for punitive
damages?
54
Do damages undercompensate?
If they do, an argument for punitive
damages?
Of course, this assumes that the U.S.
has it right and the rest of the world
is really very backward…
55
Do damages
undercompensate?
Would compensatory damages
undercompensate in Hibschman
Pontiac?
56
Little GTO
Little GTO, you're really lookin' fine
Three deuces and a four-speed and a 389
Listen to her tachin' up now, listen to her whine
C'mon and turn it on, wind it up, blow it out GTO
Wa-wa, wa, wa, wa, wa, wa,
(mixed with "Yeah, yeah, little GTO")
Wa-wa, wa, wa, wa, wa, wa,
(mixed with "Yeah, yeah, little GTO")
Wa-wa wa, wa, wa, wa, wa, wa
(mixed with "Ahhh, little GTO")
Do damages
undercompensate?
What was the “malice, fraud, gross
negligence and oppressive conduct”?
As opposed to a simple breach of
contract…
58
Do damages
undercompensate?
What was the “malice, fraud, gross
negligence and oppressive conduct”?
As opposed to a simple breach of
contract…
Did the Π independently establish a
common law tort?
Or elements of fraud, malice etc mingle
in the controversy
59
Do damages
undercompensate?
The jury awarded punitive damages
assessed at 10 times the
compensatory damages
When is the “first blush” rule triggered?
60
Do damages overdeter?
Suppose you’re a potential Δ. Are you
made whole by a finding of no
liability?
61
Do damages overdeter?
Suppose you’re a potential Δ. Are you
made whole by a finding of no
liability?
Imagine the argument to the jury in
Miller Brewing
They’re so rich, they won’t notice unless
you make it hurt
62
Do damages overdeter?
Interstate Exploitation
Suppose state A was permitted to
impose a tax on citizens of state B…
63
The Pinto Case 922
Ford did not make a safety
improvement which would have
solved the problem because it did not
think this cost effective, given the
expected value of the accident
In doing so, it valued a life as worth $2M
Does this deserve punitive damages?
64
Miller Brewing
Best Beers a distributor for Miller for
30 years
Was the termination wrongful?
Was Miller animated by something other
than its business interests?
65
Miller Brewing
The court found that Monroe
Beverage’s performance was in some
ways inferior to Best Beers.
Is this relevant?
66
Miller Brewing
Is Hibschman Pontiac overturned?
The need for an independent common
law tort.
67
The Backlash
Kozinski in Oki America at 992
Thyssen v. Taiwan Int’l at 923
State Farm and interstate exploitation
at 925
Cooter on business judgment
standards
68
George Mason School of Law
Contracts II
Punitive Damages
F.H. Buckley
[email protected]
69