Remedies

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CHAPTER 18
Remedies
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BUT FIRST

• SOME ADDITIONAL BUT IMPORTANT DEFINITIONS AND
  LEGAL CONCEPTS

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CONTRACTS THAT VIOLATE A STATUTE ARE ILLEGAL
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WHERE A LICENSE IS REQUIRED, NORMALLY, A CONTRACT
MADE BY AN UNLICENSED PERSON IS ILLEGAL
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CONTRACTS THAT VIOLATE PUBLIC POLICY ARE
PROHIBITED
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AN EXCULPATORY CLAUSE IS GENERALLY UNENFORCEABLE
WHEN IT ATTEMPTS TO EXCLUDE AN INTENTIONAL TORT
OR GROSS NEGLIGENCE
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AN EXCULPATORY CLAUSE IS GENERALLY UNENFORCEABLE
WHEN THE AFFECTED ACTIVITY IS IN THE PUBLIC
INTEREST
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AN UNCONSCIONABLE CONTRACT IS ONE THAT THE COURT
WILL NOT ENFORCE BECAUSE OF FUNDAMENTAL FAIRNESS
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A CONTRACT SIGNED BY A MINOR IS VOIDABLE BY THE
MINOR
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CONTRACTS ENTERED INTO BY MENTALLY IMPAIRED
PARTIES ARE VOIDABLE
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A CONTRACT ENTERED INTO UNDER DURESS IS VOIDABLE
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CONTRACTS WHICH MUST BE IN WRITING

• Interest in real estate
• Agreements that can not be performed within one
  year
• Promise to pay the debt of another
• Promise made by executor of an estate
• Promise made in consideration of marriage

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WHEN CONTRACTS MAY NOT BE ASSIGNED

• When assignment substantially effects obligors
  rights or duties
• If forbidden by law
• Is precluded by the contract

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CONTRACTUAL DUTIES WHICH MAY NOT BE ASSIGNED

• Delegation would violate public policy
• The contract prohibits delegation
• The obligee has a substantial interest in
  personal performance by the obligor

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PERFORMANCE

• Strict performance
• Substantial performance

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GOOD FAITH

• Every contract imposes upon each party a duty
  of good faith and fair dealing in its performance
  and enforcement.

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BREACHING THE CONTRACT

• Someone breaches a contract when he fails to
  perform a duty without a valid excuse.

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BREACH

• When one party breaches a contract, the other
  party does not have to perform and is discharged
  from their obligations.

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The flexible powers of a court should enable it
to craft a just remedy for almost any breach of
contract.
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REMEDY

• A remedy is the method a court uses to compensate
  an injured party when a contract is breached.

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INTEREST

• A legal right in something.

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IDENTIFYING THE INTEREST

• Expectation Interest
• Reliance Interest
• Restitution Interest
• Equitable Interest

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COMPENSATORY DAMAGES

• Compensatory damages are to compensate for the
  breach of the contract.

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CONSEQUENTIAL DAMAGES

• Consequential damages are those resulting from
  the unique circumstances of this injured party.

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INCIDENTAL DAMAGES

• Incidental damages are the relatively minor costs
  incurred when the injured party responds to the
  breach

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PUNITIVE DAMAGES

• Punitive damages are designed to punish
  someone for reprehensible behavior in breaching a
  contract.

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LIQUIDATED DAMAGES

• A liquidated damages clause, is a provision
  stating in advance how much a party must pay it
  if it breaches.

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ENFORCEMENT

• A court will generally enforce a liquidated
  damages clause if
• (1) at the time of creating the contract it was
  very difficult to estimate actual damages, and
• (2) the liquidated amount is reasonable.

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SELLERS REMEDIES

• When the buyer breaches, if the seller acts in
  good faith, she will be awarded the difference
  between the original contract price and the price
  she was able to obtain in the open market.

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BUYERS REMEDIES

• When the seller breaches, the buyer will be
  awarded the difference between the original
  contract and her cover (replacement) price

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OTHER EQUITABLE INTERESTS

• Specific Performance
• Injunction
• Reformation

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SPECIAL ISSUES OF DAMAGES

• Mitigation of Damages
• Nominal Damages