Study Guides (248,279)
Canada (121,455)
Accounting (47)
ACTG 2P40 (21)
P.Maloney (16)

Chapter 15 Remedies for a Breach.docx

5 Pages
Unlock Document


Chapter 15 Remedies for Breach In the event of a Breach there are 3 types of Remedies 1) Damages 2) Equitable remedies – specific performance, injunction, rescission 3) Quantum Merit  What can a party sue for in the event of a breach?  Damages are the most common type of remedy for a breach – Damages is a Common Law remedy 1. Damages  In the most general senses Damages are an award given by the court against the breaching party for the amount of money lost by the innocent party  Damages are meant to put the parties in the contract in the position they would have been in had the contract been fully performed  To get damages you must prove 1) That the party actually breached the contract 2) That you actually sustained damages from the breach ( if no loss then can not sue for damages – comes down to evidence ) a) Rules that Relate to Damages i) Duty to Mitigate Damages ( cut losses )  In the event of a breach the duty to mitigate damages is the responsibility on the innocent party to take all reasonable efforts to try and cut their losses that result from the breach – if they do not mitigate then they will not get the damages remedy  The aggrieved party must take all „REASONABLE EFFORT‟ – just to what is reasonable  If the aggrieved party is able to mitigate all damages as a result of the breach then they are not able to sue or receive any remedy  If the aggrieved party does not take any reasonable effort to mitigate damages and can not prove to the court – they will in fact be punished and the courts would lower the damages  Market demand has a direct relationship with mitigation ii) Remoteness of Loss  The damages that the aggrieved party is seeking remedy for must have naturally flowed from the Breach - very similar to the „Proximate Cause Test‟  The more space and time between the breach and damages sustained the less likely the aggrieved party will obtain remedy – the less space and time between the breach and damages the more likely will get remedy  Depends on remoteness (b)Types of Damages i) Nominal Damages  Nominal damages are damages awarded in the event where the party proves the breach of a contract but fails to prove a loss from the breach – courts will award $1 – a symbolic gesture ii) Liquidated Damages  Liquidated damages are predetermined damage by the partied themselves in the event of a certain breach – the parties determine the amount that will be awarded in the event of a certain breach  The parties will have a „Liquidated Damages Clause‟ set into the contract  BUT – courts will only uphold a liquidated damages clause if the predetermined estimate constitute a reasonable estimate – close to market value or real value of damage  If the estimate is not reasonable the courts will not uphold the clause  Higher estimates look more like a penalty clause to scare iii) General Damages  Damages that are estimated amounts established by the courts that will be awarded over and above a specific losses – when courts are forced to pick an amount for general damages due to someone with pain and suffering, emotional suffering – things that do not have a quantitive face iv) Expectation Damages  Damages awarded for the loss of the expected profit resulting from the breach  Being awarded the profit that would have been made v) Consequential Damages ( related contracts )  Damages that are one step away from the breach – deals with the remoteness of loss  It depends on wh
More Less

Related notes for ACTG 2P40

Log In


Join OneClass

Access over 10 million pages of study
documents for 1.3 million courses.

Sign up

Join to view


By registering, I agree to the Terms and Privacy Policies
Already have an account?
Just a few more details

So we can recommend you notes for your school.

Reset Password

Please enter below the email address you registered with and we will send you a link to reset your password.

Add your courses

Get notes from the top students in your class.