Chapter 14 Bidniss Laaaaa Remedies for breach of contract Contract: an agreement that a course will enforce. Basis for all economic activities. Remedies for breach of contract Denial of remedies for breach of contract

Major vs. Minor Major – a material breach Common sense Minor is less sever. How is this decided? The significances of any breach and therefore its classification as minor or major is an issue of fact for a judge or jury to decide. It is the wonderful reasonable person statute again. 2 guide lines for determining if the breach is minor or major 1) the significance of the breach in relation to the entire contract.

Remedies for the Major Breach 1.recession and restitution – canceling the contract and returning whatever has been received under it. 2.Money damages – the payment of money to compensate for injury. 3.Specific performance – a court order commanding the breaching party to perform what was promised in the contract. If classified as a major breach the the ijured party need not continue performing the duties defined by the contract and can CHOOSE among the the remedies of restitution and other money damages we will talk about soon.

Minor Breach Injured party must generally continue to perform the duties defined in the contract Money is the only remedy, used to complete the minor duty. If the purchase price had not been paid, the buyer can recover damages through offset Offset is a reduction in the price to serve as a recovery of damages.

Types of Breach and Remedies A remedy means the action or procedure followed to enforce a right or to get damages for an injury to a right Rescission and Restitution Restitution - permits the inured party to recover money or property given to the defaulting property Rescission – allows the parties to treat the contract as canceled. Attempt to place the parties in the same legal position they where in before contracting! + R

Types of Money Damages Compensatory money damages seeks to place inured parties in the same financial position they would have been in if there had been no breach Consequential money damages are when a court tries to place the injured party in the same financial position they would have been in if the contract had been preformed Money for foreseeable injury, reasonable person could foresee injury. Liquidated money damages occur if there was a previously agreed on sum, should a certain event occur. Want to make the injured party whole not necessarily punish the offending party that is punitive damages and it is only used in extreme cases Consequential damages are foreseeable if you are told that an injury will occur if… Liquidated damages cannot be punitive

Types of Money Damages (Cont’d) Punitive damages are used to punish or make an example of the guilty party Nominal Damages are awarded at times when there is not even injury, simply just a legal wrong doing Punitive only when fraud or intentional tort is involved, added to other money damages. Nominal means small amount, after a breach the plaintiff finds a replacement at a lower cost Degree minus the ‘g’ plus the ‘c’---and what do you get!?

Specific Performance At times money is not an adequate remedy for breach of contract, so there may be a decree for specific performance—and the court orders the same performance originally agreed

Money Damages Inadequate Usually money is just fine it allows the injured party to buy or replace similar goods or services. Specific performance can only be used when…

The subject of the contract is UNIQUE The purchase of Mr. Sanderson’s 1970 red convertible gto, is specific performance to but a 2005 red gto not so All real property is specific because all property is distinctly different

Courts must be able to see the performance, therefore; it must be tangible Courts must be able to supervise, building of home or other structure to difficult, employee contracts, personal service, so these are usually money liabilities.

“A court will not award a remedy unless the party seeking it, is blameless and has acted reasonable and fairly throughout the transactions.” Called Clean hands Specific performance is an equitable remedy, and will not be awarded unless the party seeking it is blameless This is Called…

DENIAL!

An injured party must either elect or chose a remedy when suing. Specific performance and damages cannot be received for the same breach No double counting No recession or restitution and damages Essentially opposites (what?)

Mitigate Damages Injured party must not try to make situation worse for themselves in an effort to collect a bigger settlement Means one must act to minimize their injury, must make a reasonable attempt to right the wrong, land lord reasonable attempt to lease a vacated appartment.

Waiver When a party intentionally gives up its rights Doing something outside the contract.

Statutes of limitations A person only has so much time to accuse someone else of causing them harm All states have this usually 4 years contracts and 3 for torts, excused minors

Bankruptcy? Legal proceeding whereby a debtor’s assets are distributed among his or her creditors to discharge debts. IF APPROVED…you are excused from your debts, however those who you have borrowed money from are allowed to split up your assets

Extra Features