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Law 122 - Chapter 12 - My Notes.docx

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Law and Business
Course Code
LAW 122
Theresa Miedema

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Chapter 12 Contractual Remedies Damages – is an award of money that is intended to cure a wrongful event, such as a breach of contract  The plaintiff is not entitled to receive the exact thing that it expected to get under the agreement. It is entitled to only the monetary value of that thing Expectation Damages – represent the monetary value of the benefit that the plaintiff expected to receive under the contract  Expectation damages are forward-looking because they are intended to place the plaintiff in the position that it expected to be in after the contract was properly performed  Expectation Damages = expected benefits under the contact - cost under the contract  However, judges usually refuse to award damages on a “cost of cure” basis if the difference between the cost of cure and the benefits of the cure is unreasonable large Intangible Loss – is a loss that does not have any apparent economic value Remote – a loss is remote if it would be unfair to hold the defendant legally responsible for it  A plaintiff cannot recover expectation damages for every loss that it suffers after the defendant breach. o A loss is not remote if the defendant either should have known or actually did know that it was the sort of loss that might occur if the contract was breached  First, liability may be imposed if a reasonable person would have known that the plaintiff’s loss might rust in a breach  Second, liability may be imposed if the defendant actually knew that the plaintiff’s loss might result from the breach Mitigation – occurs what the plaintiff takes steps to minimize the loss flowing from the defendant’s breach 1. First, lawyers sometimes say that there is a duty to mitigate. In fact there is not really a duty in the senesce of something that must be done. The plaintiff is not required to mitigate. Failing to do so is however, a poor business decision 2. Second, the plaintiff is responsible only for taking reasonable steps to mitigate a loss 3. Third, damages are denied only to the extent that the plaintiff unreasonably failed to mitigate 4. Fourth, the plaintiff can recover the cost associated with mitigation Reliance Damages – represent the monetary value of the expenses and opportunities that the plaintiff wasted under a contract  If you ask for reliance damages, you are saying “Give me what I lost. Put me in the position that I would have enjoyed if I has not wasted resources under this contract”  The plaintiff is generally entitled to recover either expectation damages or reliance damages, but not both  Reliance damage is subject to an important limitation. They can be awarded only to the extent that a contract is not unprofitable o The plaintiff cannot use reliance damages to avoid a loss that it would have suffered if the contract had been performed Nominal Damages – Symbolize the fact that the plaintiff suffered a wrong when the defendant broke a promise Liquidated Damages – represents a genuine attempt to estimate the value of the loss that may occur as a result of a breach  The innocent party is entitled to recover even if that amount turns out to be more the loss that it actually suffered  The innocent party is usually entitled to recover only the liquidation amount, even if it suffered a larger loss as a result of the breach. Penalty – requires a party to pay an exorbitant
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