Chapter 17Contracts — Breach of Contract and Remedies.ppt

Chapter 17Contracts — Breach of Contract and Remedies Introduction Damages. Rescission and Restitution. Specific Performance. Reformation. Recovery Based on Quasi Contract. §1: Damages Types of Damages: Consequential Damages. Breaching party is aware or should be aware, cause the injury party additional loss. Punitive Damages. Available when tort is also involved. Nominal Damages. No financial loss. §2: Mitigation of Damages When breach of contract occurs, the innocent injured party is held to a duty to reduce the damages that he or she suffered. Duty owed depends on the nature of the contract. Liquidated Damages vs. Penalties Liquidated Damages. A contract provides a specific amount to be paid as damages in the event of future default or breach of contract. Penalties. Specify a certain amount to be paid in the event of a default or breach of contract and are designed to penalize the breaching party. §2: Rescission and Restitution Rescission. A remedy whereby a contract is canceled and the parties are restored to the original positions that they occupied prior to the transactions. Restitution. Both parties must return goods, property, or money previously conveyed. Note: Rescission does not always call for restitution. Restitution called for in some cases not involving rescission. §3: Specific Performance Equitable remedy calling for the performance of the act promised in the contract. Remedy in cases where the consideration is: Unique; Scarce; or Not available remedy in contracts for personal services. §4: Reformation Equitable remedy allowing a contract to be reformed, or rewritten to reflect the parties true intentions. Available when an agreement is imperfectly expressed in writing. §5: Recovery Based on Quasi Contract Equitable theory imposed by courts to obtain justice and prevent unjust enrichment. Quantum meruit. Party seeking recovery must show the following: A benefit was conferred to the other party. Party conferring did so with the reasonable