1. Chapter 9 Remedies for breach of contract
N.U.M.
Commercial Transaction
Chapter 9 Remedies for breach of contract
Breach of k is a party’s failure to perform his or her obligations under a k.
A valid k that is breached by either party is
still a valid k. So the court enforces a k.
(the court is providing a remedy
to the non-breaching party.)
Under CISG the court can impose two
types of remedies for breach of K: monetary damages & specific performance.
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Monetary Damages: The money that the breaching party pays to the non-breaching party for breach of k.
There are two main types of monetary damages expectation damages and reliance damages.
Expectation damages: Monetary damages are made up of two components: compensatory damages and consequential damages.
Compensatory damages (direct loss): The breaching party compensates the non-breaching party for any loss suffered as a result of the breach, such as: profit which the non-breaching party would have earned from that K and any incidental expenses. (Art.74 of CISG) ☻-Study Question # 20
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Consequential damages:
The breaching party compensates the non-breaching party for any indirect losses resulting from the breach which were reasonably foreseeable by reasonable person at the time the K was formed.
The breaching party is liable for those damages in addition to compensatory damages.
☻- Study Question # 21
Remember that the court can award both compensatory and consequential damages if necessary to make the non-breaching party “whole”. Ex: Dina is sued by Neam.
☻-Study Question # 22
Sambo also had an obligation to minimize her damages resulting from Saray’s breach.
The court will require the non-breaching party to take reasonable steps to limit the amount of consequential damages. Because Art.77 of CISG, the non-breaching party has an obligation to try to minimize the damages resulting from the other party’s breach.
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N.U.M.
Commercial Transaction
Reliance Damages ( direct loss): Occasionally, a court will not be able to determine the amount of expectation damages because they are too speculative.
Reliance damages are reimbursement for the costs that the non-breaching party incurred before the breach in reliance on the contractual obligations being fulfilled.
☻-Study Question#23
Specific Performance
In certain situations money alone may be insufficient to make the non-breaching party whole. So the court can order the breaching party to carry out its obligations under the K .
( See example page 76 )
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5. Prepaped by Leng kimhok
Summery
monetary damages
Remedies
specific performance
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6. Prepaped by Leng kimhok
Continued
Expectation damages
Monetary damages
Reliance damages
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7. Prepaped by Leng kimhok
Continued
Expectation damages = compensatory damages
+ consequential damages
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