Exam 18: Contract Remedies

Under the rule in Hadley v. Baxendale , only damages foreseeable at the time of entering into the contract can be recovered.

A contractor and Southampton, Inc. have a contract, which calls for the contractor to build a building with the completion by June 15. If the building is not completed by that date, the contract calls for the contractor to pay $100 per day in damages. The $100 per day is:

Eve agrees to sell her boutique to Shelley for $150,000. Shelley spends $60,000 on inventory and fixtures for the store, but then Eve repudiates the contract. Shelley is able to sell the inventory and fixtures for $45,000. Since Shelley cannot establish her lost profits with reasonable certainty, discuss what damages she should seek for Eve's breach of contract.

A power of avoidance held by a party may be lost if:

The purpose of reliance damages is to place the injured party in a position as good as he would have held if the contract had not been made.

If the parties to a contract stipulate an amount that will be paid in the event of a breach, the courts will always enforce it.

The test of foreseeable damages is subjective.

A small breach of contract damage amount fixed without regard to the amount of loss is known as:

Bob's brother, Steve, planned to visit over Labor Day weekend. Together they planned to build a deck in Bob's backyard. Bob ordered the lumber, concrete, nails, and other supplies to be delivered on Friday. He also arranged to rent a saw for the weekend (Sat., Sun., and Mon.) at a cost of $20 a day. When he went to pick up the saw, the store had already rented it. He drove all over town trying to borrow another but could only get one for Sunday, Monday, and Tuesday at a cost of $50 per day. Because they couldn't work on Saturday without a saw, Bob had to hire Mac at a cost of $80 to work with him on Tuesday and, of course, Bob had to take off from work. Calculate the damages to which Bob is entitled. Why? Explain.

Harry said to Marge, "I have a ring once owned by Marilyn Monroe. Would you like to buy it for $500?" Marge pays for the ring, but the next day a friend tells her that Harry had recently purchased the ring at a local store. Marge enjoys wearing the ring and wears it constantly for twelve months. Finally, she goes to Harry and says, "Here is the ring you lied about. Give me my $500." Most likely Marge will:

The costs or losses an injured party avoids by not having to perform are not figured in the computation of damages.

Delay will have no effect on the power of avoidance.

Contract damages that put the injured party in as good a position as if the other party had performed are:

A plaintiff who has not sustained any loss resulting from the defendant's breach of contract cannot recover any damages.

In which of the following situations is restitution available as a remedy?

Equitable remedies are available any time the plaintiff chooses them over money damages.

Equitable remedies result in money awards to the plaintiff.

To fully compensate a plaintiff for losses suffered for a breach of contract, punitive damages are always awarded.

The remedy for misrepresentation is specific performance of the contract.

What principle did the court apply in the case of Madison Square Garden Corp., Ill. v. Carnera ?