1. LAW for Business and Personal Use © 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 11 SLIDE 1 11-2Remedies for Breach of Contract  GOALS  Name and describe various remedies possible for minor or major breach of contract  Discuss the factors that affect the choice of remedies

2. LAW for Business and Personal Use © 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 11 SLIDE 2 REMEDIES POSSIBLE FOR BREACH  Remedy for a minor breach  Remedies for a major breach  Rescission and restitution  Money damages  Specific performance

3. LAW for Business and Personal Use © 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 11 SLIDE 3 CHECKPOINT  Explain the remedies available for a major breach of contract.     

4. LAW for Business and Personal Use © 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 11 SLIDE 4 FACTORS AFFECTING CHOICE OF REMEDY  Conflict of remedies  Duty to mitigate  Waivers  Statute of limitations  Bankruptcy

5. LAW for Business and Personal Use © 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 11 SLIDE 5 REMEDIES FOR BREACH OF CONTRACT Breach of Contract Rescission and Restitution Damages Specific Performance InjunctionWaiver Nominal Damages Liquidated Damages Consequential Damages Compensatory Damages

6. LAW for Business and Personal Use © 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 11 SLIDE 6 CHECKPOINT  What does it mean to “mitigate the damages”?     

7. LAW for Business and Personal Use © 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 11 SLIDE 7 PREVENT LEGAL DIFFICULTIES  In the execution of contracts...  As a prospective assignee, determine whether the assignor is subject to any defense that may affect your claim. Do this by promptly checking with the obligor (debtor). Remember that you, as the assignee, acquire only the rights as the assignor possessed.  If you are an assignee, be sure to notify the obligor (debtor) of the assignment as soon as practicable. Continued on the next slide

8. LAW for Business and Personal Use © 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 11 SLIDE 8 PREVENT LEGAL DIFFICULTIES  Be aware that “time is of the essence” in many contracts. If a contract calls for performance by a certain time, failure to perform may be a breach of contract. When appropriate, include this requirement in your contract, and clearly state that failure to perform at the time agreed upon may be treated as a breach. Continued on the next slide

9. LAW for Business and Personal Use © 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 11 SLIDE 9 PREVENT LEGAL DIFFICULTIES  Remember that hardship and higher costs do not make performance impossible. Bad weather, fires, strikes, inability to obtain materials, or similar difficulties could cause hardship. To be protected against damages for failure to fulfill a contract because of such events, include in the contract a clause to that effect.  Negotiate, and if possible, mediate or voluntarily arbitrate, before you litigate. A lawsuit should be the final resort because it is costly in time, money, and goodwill. Continued on the next slide

10. LAW for Business and Personal Use © 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 11 SLIDE 10 PREVENT LEGAL DIFFICULTIES  Always keep accurate records and be prepared to show that you actually suffered a monetary loss from a breach of contract. Make and keep evidence of a reasonable effort to mitigate the damages.