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MIDTERM Sheet #12.docx

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Ryerson University
Law and Business
LAW 122
Sari Graben

Chapter 12: Contractual Remedies Damages (Pg. 275) • Damages are an award of money after wrongdoing. • Normally, the plaintiff is not entitled to receive the exact thing that it expected to get under the contract. • Plaintiff is only entitled to monetary value of expected benefit. • Types of contractual damages: o Expectation damages o Reliance damages o Account of profits o Nominal damages o Liquidated damages o Punitive damages Expectation Damages (Pg. 276) • Places the plaintiff in the position that it would have been in (monetary value), if the contract had been performed. • Most common form of damages. • They are described as “forward-looking”. • They equal the value of the benefit that the plaintiff expected to receive minus the value of the costs that it expected to incur. Issues for Expectation Damages • Sometimes difficult to calculate: o Awarded even if calculation is imprecise. o Not awarded if calculation is totally speculative. • Difficulty in identifying expected benefit: o Receipt of service itself  cost of cure damages:  Awarded if plaintiff has legitimate interest in having the work done or if plaintiff already spent money curing defendant's performance. o Receipt of value of service’s end product  loss of value damages:  Awarded if difference between cost of cure and benefits of cure is unreasonably large. • Alternative performance: calculated on the basis of the least onerous option. • Intangible losses: will be provided, if they were in the reasonable contemplation of the parties. Remoteness (Pg. 280) • Loss is not remote if either: o Reasonable person should have known of risk of loss. o Defendant actually knew of risk of loss. • Test applied at time of creation of contract. • Remoteness as a rule of fairness. Mitigation (Pg. 282) • Plaintiff cannot recover damages that it unreasonably failed to mitigate. • Mitigation = minimization of losses. • Plaintiff should take all reasonable steps to mitigate. • Costs of mitigation can be recovered. • Effect of failure to mitigate: damages reduced to extent losses not avoided.  Business Decision 12.1 (Pg. 282) not liable for all losses. You need to mitigate your damages. You will get the losses that you cannot reasonably mitigate ($3000) since they could have gotten another supplier in 3 weeks. You will get paid for the time in which you couldn’t get another supplier. You could also get money for COST of mitigation. Account of Profits (Pg. 284) • Damages traditionally limited to losses. • Relief now available for wrongful gains. • Defendant placed as if breach never occurred. • Account only in exceptional circumstances (only if legitimate reason to deprive defendant of profit). Nominal Damages (Pg. 285) • Breach of contract is actionable per se: o Wrongful even if plaintiff suffers no loss. • Nominal damages: o symbolize the fact that the defendant did not honour its contractual obligations to the plaintiff, but plaintiff has not suffered any loss. o Limited to small amount. • Courts may assess trial costs against plaintiff for wasting court time. Liquidated Damages (Pg. 285) • A genuine attempt by contracting parties to estimate the value of the loss that would result from a breach th
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