Contracts - Damages

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Whether damages were foreseeable?

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Damages are foreseeable if they are:

  1. contemplated at the time the contract is made with a focus on the breaching party;

  2. losses for which defendant had reason to know; and

  3. losses must be foreseeable as a probable result of the breach; does not extend to remote losses.

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Whether the damages were reasonably certain

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Damages must be reasonably certain in both nature and origin; neither can be speculative

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13 Terms

1

Whether damages were foreseeable?

Damages are foreseeable if they are:

  1. contemplated at the time the contract is made with a focus on the breaching party;

  2. losses for which defendant had reason to know; and

  3. losses must be foreseeable as a probable result of the breach; does not extend to remote losses.

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2

Whether the damages were reasonably certain

Damages must be reasonably certain in both nature and origin; neither can be speculative

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3

nature

reasonably quantifiable in a dollar amount after the breach

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4

origin

resulting from the breach

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5

whether there was a duty to mitigate

  1. Damages are not recoverable for loss that the injured party could have avoided without undue risk, burden, or humiliation; and

  2. the injured party is not precluded from recovery to the extent that he has made reasonable but unsuccessful efforts to avoid loss.

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6

Whether there is an employee’s duty to mitigate

Must find Suitable employment, Substantially equivalent to the position lost; and suitable to a person’s background and experience

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7

General measure partial breach

Loss in value + other loss

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8

general measure total breach

loss in value + other loss - cost avoided - loss avoided

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9

real estate seller breach

FMV - K price + other loss

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10

real estate buyer breach

K price - FMV + other loss

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11

employee breach

cost of replacement + other loss

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12

contractor breach

cost of completion of diminution in value

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13

diminution in value

determine if:

  1. substantial performance has already been completed

  2. unreasonable economic waste to cure breach

  3. breach unintentional

  4. breach was a trivial defect

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