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Chapter 12

LAW 122 Chapter Notes - Chapter 12: Clean Hands, 18 Months, Specific Performance

Law and Business
Course Code
LAW 122
Valerie Dye

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Remedies for Breach of Contract:
damages for breach of contract
equitable relief
restitution for unjust enrichment in certain circumstances
Damages: money payable after wrongdoing
except in some cases the plaintiff is not entitled to receive the exact thing that they
expected to get under the agreement
entitled only to the monetary value of that thing
Expectation damages: represent the monetary value of the benefit that they plaintiff is
expected to receive under the contract
does not receive performance but instead value of performance
Forward looking damages:
plaintiff monetarily placed as if contract performed
integrity of promise protected
Calculation of expected damages: expected benefits minus expected costs
Issues for expectation damages:
complications in calculation of damages
osts of ure or loss of alue
alternative performance
intangible losses and emotional distress
mitigation of damages
difficulty of calculation:
awarded even if calculation is imprecise
e.g. damages for lost chance in beauty contest
not awarded if calculation is totally speculative
e.g. value of treasure in supposedly sunken ship
Cost of Cure or Loss of Value?
Diffiult i idetifig epeted eefit
Receipt of service itself? E.g. 60,000: cost of restoration
Receipt of value of services end product? E.g. $12,000: value added to land if
restoration occurs
Cost of cure damages: cost of service
Awarded if reason is legitimate for wanting restoration
Loss of value damages: value of end product
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If unreasonable discrepancy between cost and value
Alternative Performance:
Expectation damages difficult to quantify if contract allows defendant to perform in a
variety of ways:
E.g. contract allows employer to terminate employment by:
o Any time, without notice, if employee acts in a manner detrimental to
opa’s reputatio OR
o Any time after 18 months, by giving 3 months notice
Damages calculated on the basis of the least onerous option the minimum acceptable
Intangible Losses & Emotional Distress:
Intangible loss: no apparent economic value
Disappointment, anger, frustration, sadness
Damages for emotional distress traditionally denied
Rationale: difficult to assess value, and contracts are commercial arrangements
for money not feelings
Now usually available if peace of mind was expected contractual benefit. Emotional
distress treated in same manner as other types of loss
Limitations to expectation damages:
Expectation damages may be reduced by
Causation and remoteness
Failure to mitigate losses
Causation and Remoteness
in order to recover losses:
loss must not be legally remote from breach
Loss is not remote if either:
defendant knew or should have know of risk of loss
Test applied at time contract is created (no hindset)
Remoteness: as a rule of fairness
contract price reflects exposure to risk
defendant not paid to accept unforeseeable risks
Risk Management:
before entering contract ensure other prty aware of any unusual losses you may suffer
as a result of contractual breach UNLESS you are prepared to accept such rick yourself
Mitigation of damages:
Mitigation: minimization of losses
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