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Lecture 8

ACTG 2P40 Lecture Notes - Lecture 8: Fairy, Punitive Damages, GiePremium

6 pages38 viewsWinter 2017

Department
Accounting
Course Code
ACTG 2P40
Professor
Tommy Wall
Lecture
8

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November 1, 2016
Effect of Breach
How Breach may occur
1) Repudiation and anticipatory breach
Repudiatio: he a pat does’t fulfill thei ed of the agai
so ut e ae goig to e i eah
right at the time for fulfillment (due date)
anticipatory: breaching party repudiates early
before the time for performance
Eaple: Baie supplie all eek efoe saig e a’t
pefo
Minimize damage
Breaching party possibly not sustaining any damages
2) One party renders
One party renders performance impossible
Self-induced frustration = breach
3) One party fails to perform
Beahig pat does’t do athig
Tie fo pefoae goes ad supplie does’t fulfill otat
Substantial performance: where the majority of the contractual
elements have been performed, minor breach
Exemption Clauses and their effect on breach:
Eaples: A lause o poisio that attepts to liit/eept a pat’s liailit i
the event of a breach
Will only be effective:
1) Entered into voluntarily
2) Exemption or limitation from liability is reasonable
Examples: Will never save a party from liability if they are in fundamental breach
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Examples: If we breach this contract our damages are going to be limited to 3$
per doll, contract breached, voluntary
Used to liit a pat’s liailit
Damages (common law remedy)
a) Rules to relating to damages
Damages are meant to put the innocent party in the spot that they would have
been if the contract had been fulfilled.
i) Duty to mitigate damages
ii) Remoteness of loss
Ex.  uits, $ pe uit… supplies did’t gie
Mitigate Damages:
duty- on non-innocent party
In the face of a breach the innocent party has a duty to make reasonable efforts
to mini their losses or cut their damages once they learn of the breach.
Week befoe da of pefoae, Walat a’t sit ak ad let the losses flo
(reasonable in the circumstances to mitigate)
If the innocent party fails to mitigate, court will take that in account when
calculating damages.
Supplier sell for 10
Walmart sell for 15
5-dollar profit
“upplie a’t pefo
Walmart mitigates
Other supplier- sells for $12
1) Walmart goes through with deal (12$) makes profit 3$ per doll
2) 10,000 X 3= #
3) 10,000 X2= # this is the number that can sue the original supplier for losses
or damages
Different dates: late delivery
Sell 5000 of the 10,000
5000X5=25000
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