Exam 15: Breach and Remedies

Under the doctrine of mitigation of damages, the duty owed depends on the nature of the contract.

The measure of compensatory damages often varies by type of contract.

Fact Pattern 15-1 Ambrose enters into a contract to buy 350 acres from Belle Vista Farms to cultivate grapes and open a winery. -Refer to Fact Pattern 15-1. If Ambrose breaches the contract, Belle Vista's remedy would most likely be

Isabel orally agrees to buy a unique collection of nineteenth-century cowboy memorabilia for $10,000 from Jessie and sends $2,500 as a down payment. When Isabel pays the rest of the price, Jessie refuses to ship the collection. Isabel should seek

Specific performance will not be granted unless the party's legal remedy is inadequate.

A party seeking to recover compensatory damages can also recover incidental damages.

Bread & Bagels Bakery (B&B) enters into a contract with Cineplex for discounted tickets for B&B's employees. Cineplex breaches the contract and B&B enters into a contract with DigiMovies for the same service at a lower price. B&B might be awarded nominal damages to

Consequential damages are awarded for damage caused by special circumstances beyond a contract itself.

National Drilling Company ships its only pump to American Hydraulics Corporation, the manufacturer, for repair. National hires Overland Transport, Inc., to take the pump to American Hydraulics and to return it to National as soon as the repair is complete. National is forced to suspend operations without a pump, but Overland does not know this. National expects to be without the pump for five days and to lose profits of $5,000. When the pump is not returned by the end of the fifth day, National rents a pump at a cost of $100 per day. Overland delays five more days before returning the pump. National files a suit against Overland, asking for compensatory, consequential, and punitive damages. Will National recover?

Damages that compensate the nonbreaching party for the loss of a bargain are known as consecutive damages.

Nominal damages are awarded for the breach of a contract to nominate someone or something to a higher office, position, or category.

Nominal damages are designed to punish a wrongdoer and set an example to deter similar conduct in the future.

Rough Hewn Lumber Company orally contracts with Joe for the purchase of five acres of Joe's timberland. Joe makes the transfer but Rough Hewn does not pay the price. The lack of a written contract could bar enforcement of this deal. If so, Joe could most likely recover on a theory of

Ridgeview Mining Inc. agrees to deliver ten tons of coal to Static Energy Corporation. The agreement states that delivery is to be within "9" days, although the parties intend "90" days. Ridgeview cannot convince Static to amend the contract. Ridgeview should seek

Rikki agrees to sell her Sunrise Breakfast Café to Tia. As part of the deal, Rikki signs a covenant not to open a competing business within a hundred-mile radius for ten years. If this covenant is later determined to be unreasonable, the appropriate remedy is most likely

Usually, a court will not award an equitable remedy unless the remedy at law is inadequate.

A remedy is the relief provided to an innocent contracting party when the other party breaches the contract.

A breach of contract entitles the nonbreaching party to sue for monetary damages.

Rescission is an equitable remedy used when the parties have imperfectly expressed their agreement in writing.

The injury suffered by a nonbreaching party due to the breach of a con­tract may be remedied by payment of coincidental damages.