Remedies of the Injured Party Section 12.2

Understanding Business and Personal Law Remedies of the Injured Party Section 12.2 Transfer of Contracts and Remedies for Breach What You’ll Learn How to explain the concept of anticipatory breach (p. 250) How to identify remedies available for breach of contract (p. 250)

Understanding Business and Personal Law Remedies of the Injured Party Section 12.2 Transfer of Contracts and Remedies for Breach What You’ll Learn How to define specific performance (p. 253) Why you must minimize the damages involved in a breach of contract (p. 252)

Understanding Business and Personal Law Remedies of the Injured Party Section 12.2 Transfer of Contracts and Remedies for Breach Why It’s Important Understanding the remedies available when a contract is breached will help you pursue satisfaction if this happens to you.

Understanding Business and Personal Law Remedies of the Injured Party Section 12.2 Transfer of Contracts and Remedies for Breach Legal Terms breach of contract (p. 250) anticipatory breach (p. 250) damages (p. 251) actual damages (p. 251) incidental damages (p. 251)

Understanding Business and Personal Law Remedies of the Injured Party Section 12.2 Transfer of Contracts and Remedies for Breach Legal Terms liquidated damages (p. 251) mitigation of damages (p. 253) specific performance (p.253) injunction (p. 255)

Understanding Business and Personal Law Remedies of the Injured Party Section 12.2 Transfer of Contracts and Remedies for Breach Breach of Contract Damages Acceptance of Breach Money Damages Actual and Incidental Damages Liquidated Damages Section Outline

Understanding Business and Personal Law Remedies of the Injured Party Section 12.2 Transfer of Contracts and Remedies for Breach Minimizing Damages Equitable Remedies Specific Performance Injunction Section Outline

Understanding Business and Personal Law Remedies of the Injured Party Section 12.2 Transfer of Contracts and Remedies for Breach Pre-Learning Question What is a breach of contract?

Understanding Business and Personal Law Remedies of the Injured Party Section 12.2 Transfer of Contracts and Remedies for Breach A breach of contract occurs when one party to a contract fails to perform the duties set out in the terms of the agreement. Breach of Contract

Understanding Business and Personal Law Remedies of the Injured Party Section 12.2 Transfer of Contracts and Remedies for Breach Sometimes parties to a contract notify the other that they will not go through with the contract before the time for performance. Breach of Contract

Understanding Business and Personal Law Remedies of the Injured Party Section 12.2 Transfer of Contracts and Remedies for Breach They have breached, or violated, the agreement before they were required to act. This is called anticipatory breach. Breach of Contract

Understanding Business and Personal Law Remedies of the Injured Party Section 12.2 Transfer of Contracts and Remedies for Breach Pre-Learning Question What do you think happens when a contract has been breached?

Understanding Business and Personal Law Remedies of the Injured Party Section 12.2 Transfer of Contracts and Remedies for Breach When a contract is breached, the injured party has a choice of remedies. A remedy is a legal means of enforcing a right or correcting a wrong. Damages

Understanding Business and Personal Law Remedies of the Injured Party Section 12.2 Transfer of Contracts and Remedies for Breach The injured party has three options: Damages 1.accept the breach 2.sue for money damages 3.ask the court for an equitable remedy

Understanding Business and Personal Law Remedies of the Injured Party Section 12.2 Transfer of Contracts and Remedies for Breach If one party breaches a contract, the other party has an excuse not to perform and may simply accept the breach and consider the contract discharged. Acceptance of Breach

Understanding Business and Personal Law Remedies of the Injured Party Section 12.2 Transfer of Contracts and Remedies for Breach Damages are payment recovered in court by a person who has suffered an injury. Money Damages

Understanding Business and Personal Law Remedies of the Injured Party Section 12.2 Transfer of Contracts and Remedies for Breach If you suffer a loss as the injured party, you may sue for money damages resulting from the breach of contract. Money Damages

Understanding Business and Personal Law Remedies of the Injured Party Section 12.2 Transfer of Contracts and Remedies for Breach The money damages should, by law, place you in the position you would have been in if the contract had been carried out. Money Damages

Understanding Business and Personal Law Remedies of the Injured Party Section 12.2 Transfer of Contracts and Remedies for Breach To recover damages, the injured party must make tender; that is, the injured party must offer to do what he or she agreed to do under the contract. Money Damages

Understanding Business and Personal Law Remedies of the Injured Party Section 12.2 Transfer of Contracts and Remedies for Breach Money Damages Categories of damages include: ActualLiquidated CompensatoryNominal ConsequentialPunitive IncidentalSpeculative

Understanding Business and Personal Law Remedies of the Injured Party Section 12.2 Transfer of Contracts and Remedies for Breach Actual and Incidental Damages Actual damages are damages directly attributable to another party’s breach of contract.

Understanding Business and Personal Law Remedies of the Injured Party Section 12.2 Transfer of Contracts and Remedies for Breach Actual and Incidental Damages If a seller of goods breaches a contract, the measure of damages for the buyer is the difference between the market price at the time of the breach and the contract price, plus incidental damages.

Understanding Business and Personal Law Remedies of the Injured Party Section 12.2 Transfer of Contracts and Remedies for Breach Actual and Incidental Damages Incidental damages are any reasonable expenses, resulting from a breach, that have been incurred by the buyer.

Understanding Business and Personal Law Remedies of the Injured Party Section 12.2 Transfer of Contracts and Remedies for Breach Liquidated Damages Damages agreed upon by the parties when they first enter into a contract are called liquidated damages.

Understanding Business and Personal Law Remedies of the Injured Party Section 12.2 Transfer of Contracts and Remedies for Breach Pre-Learning Question How can a party minimize the damages that result from a breach of contract?

Understanding Business and Personal Law Remedies of the Injured Party Section 12.2 Transfer of Contracts and Remedies for Breach The principle of mitigation of damages states that even if you are the innocent party, you must try to minimize damages that might result from the other party’s failure of performance. Minimizing Damages

Understanding Business and Personal Law Remedies of the Injured Party Section 12.2 Transfer of Contracts and Remedies for Breach By minimizing damages, the innocent party is protecting the other party from any unnecessary losses. Minimizing Damages

Understanding Business and Personal Law Remedies of the Injured Party Section 12.2 Transfer of Contracts and Remedies for Breach Name two types of money damages.

Understanding Business and Personal Law Remedies of the Injured Party Section 12.2 Transfer of Contracts and Remedies for Breach ANSWER Any two of the following: actual, compensatory, consequential, incidental, liquidated, nominal, punitive, and speculative.

Understanding Business and Personal Law Remedies of the Injured Party Section 12.2 Transfer of Contracts and Remedies for Breach Pre-Learning Question When do you think equitable remedies are used?

Understanding Business and Personal Law Remedies of the Injured Party Section 12.2 Transfer of Contracts and Remedies for Breach The remedy of money damages is not always enough to repay an injured party for breach of contract. In these cases, the injured party may seek an equitable remedy. Equitable Remedies

Understanding Business and Personal Law Remedies of the Injured Party Section 12.2 Transfer of Contracts and Remedies for Breach Two equitable remedies are: Equitable Remedies specific performance an injunction

Understanding Business and Personal Law Remedies of the Injured Party Section 12.2 Transfer of Contracts and Remedies for Breach When the remedy of money damages is not enough to repay a breach of contract, one party may sue the other for specific performance. Specific Performance

Understanding Business and Personal Law Remedies of the Injured Party Section 12.2 Transfer of Contracts and Remedies for Breach Specific performance means asking the court to order the other party to do specifically what he or she originally agreed to do. Specific Performance

Understanding Business and Personal Law Remedies of the Injured Party Section 12.2 Transfer of Contracts and Remedies for Breach An injunction is a court order that prevents a party from performing an act of some sort. Injunction

Understanding Business and Personal Law Remedies of the Injured Party Section 12.2 Transfer of Contracts and Remedies for Breach An injunction Injunction is only available in special circumstances, such as when money damages are inadequate compensation. may be temporary or permanent

Understanding Business and Personal Law Remedies of the Injured Party Section 12.2 Transfer of Contracts and Remedies for Breach Ping contracted to deliver 200 gallons of black berries to the Just Natural Jams and Jellies company, and Just Natural could only accept 100 gallons.

Understanding Business and Personal Law Remedies of the Injured Party Section 12.2 Transfer of Contracts and Remedies for Breach What is Ping obligated to do under the mitigation of damages principle?

Understanding Business and Personal Law Remedies of the Injured Party Section 12.2 Transfer of Contracts and Remedies for Breach Try to find another buyer for the remainder of the black berries. ANSWER

Understanding Business and Personal Law Remedies of the Injured Party Section 12.2 Transfer of Contracts and Remedies for Breach Reviewing What You Learned 1. 1.What is involved in an anticipatory breach of a contract? Section 12.2 Assessment

Understanding Business and Personal Law Remedies of the Injured Party Section 12.2 Transfer of Contracts and Remedies for Breach Reviewing What You Learned One party to a contract notifies the other party of his or her intention not to go along with the terms of the contract. Section 12.2 Assessment Answer

Understanding Business and Personal Law Remedies of the Injured Party Section 12.2 Transfer of Contracts and Remedies for Breach Reviewing What You Learned 2. 2.What remedies are available to an innocent party when a breach of contract occurs? Section 12.2 Assessment

Understanding Business and Personal Law Remedies of the Injured Party Section 12.2 Transfer of Contracts and Remedies for Breach Reviewing What You Learned Money damages and equitable remedies. Section 12.2 Assessment Answer

Understanding Business and Personal Law Remedies of the Injured Party Section 12.2 Transfer of Contracts and Remedies for Breach Reviewing What You Learned 3. 3.What is specific performance? Section 12.2 Assessment

Understanding Business and Personal Law Remedies of the Injured Party Section 12.2 Transfer of Contracts and Remedies for Breach Reviewing What You Learned It requires the other party to carry out the terms of the contract as originally agreed. Section 12.2 Assessment Answer

Understanding Business and Personal Law Remedies of the Injured Party Section 12.2 Transfer of Contracts and Remedies for Breach Reviewing What You Learned 4. 4.Why is it necessary to minimize the damages involved in a breach of contract? Section 12.2 Assessment

Understanding Business and Personal Law Remedies of the Injured Party Section 12.2 Transfer of Contracts and Remedies for Breach Reviewing What You Learned Answers may vary but should recognize that minimizing damages protects the other party from unnecessary losses. Section 12.2 Assessment Answer

Understanding Business and Personal Law Remedies of the Injured Party Section 12.2 Transfer of Contracts and Remedies for Breach Section 12.2 Assessment Critical Thinking Activity Damages What is the principle that forms the basis of the theory of damages in contract law?

Understanding Business and Personal Law Remedies of the Injured Party Section 12.2 Transfer of Contracts and Remedies for Breach Section 12.2 Assessment Critical Thinking Activity Answer Damages Answers will vary but should recognize that money damages should place you in the position you would have been in if the contract had been carried out.

Understanding Business and Personal Law Remedies of the Injured Party Section 12.2 Transfer of Contracts and Remedies for Breach Section 12.2 Assessment Legal Skills in Action Anticipatory Breach Harriet Iafigliano owes your friend, Andy, $500 that she is supposed to pay him on May 20. Harriet sent an to Andy in April indicating that she could not pay him on that date.

Understanding Business and Personal Law Remedies of the Injured Party Section 12.2 Transfer of Contracts and Remedies for Breach Section 12.2 Assessment Legal Skills in Action Anticipatory Breach Andy believes that the doctrine of anticipatory breach applies in this situation. Write a letter to Andy explaining whether anticipatory breach applies in his case.

Understanding Business and Personal Law Remedies of the Injured Party Section 12.2 Transfer of Contracts and Remedies for Breach Section 12.2 Assessment Letters will vary but should include that because Harriet informed Andy in advance of the agreed date that she was to pay him, that she wouldn’t be able to pay him, anticipatory breach does apply. Legal Skills in Action Answer Anticipatory Breach

Remedies of the Injured Party End of Section 12.2