Exam 14: Breach of Contract and Remedies

Why is the general measure of compensatory damages "benefit of the bargain" rather than a measure based on returning the parties to the position that they were in prior to the contract? What do you think is the best approach?

Painter contracts to paint the interior of Owner's home for $2,000.In each of the following unrelated examples,indicate what amount of damages Owner is entitled to recover from Painter. a.Painter stops work when halfway finished.Owner pays someone else $1,700,a reasonable amount,to finish the work.Owner has paid Painter $700. b.Painter stops work when 75% finished with the job.Owner pays someone else $1,500,a reasonable amount,to finish the work.Owner has paid Painter $700. c.Painter stops work when 50% finished with the job.Owner pays someone else $1,800 to finish the job,but could have paid yet another person who would have done an acceptable job $1,500 to finish it.Owner has paid Painter $700. d.Painter stops work when 50% finished with the job.Painter finds someone who will finish the work for $1,100.However,the delay caused $200 in water damage and Owner missed an opportunity to rent an upstairs apartment in the home for $400 per month.The painter knew that Owner rented the upstairs apartment and that the delay would affect Owner's ability to rent.Owner has paid the original painter $1,200 and the new painter $1,100.Owner ended up losing two months' rent before he could find another renter at $400 per month.

Rescission is an action to undo a contract.