ACTG 355 Chapter 18

Compensatory Damages

Contract damages placing the injured party in a position as good as the one he would have held had the other party performed; equals loss of value minus loss avoided by injured party plus incidental damages plus consequential damages.

Loss of Value

Value of promised performance minus value of actual performance.

Cost Avoided

Loss or costs the injured party avoids by not having to perform.

Incidental Damages

Damages arising directly out of a breach of contract.

Consequential Damages

Damages not arising directly out of a breach but arising as a foreseeable result of the breach.

Nominal Damages

A small sum awarded where a contract has been breached but the loss is negligible or unproved.

Reliance Damages

Contract damages placing the injured party in as good a position as she would have been in had the contract not been made.

Benefit-of-the-Bargain Damages

Difference between the value of the fraudulent party's performance as represented and the value the defrauded party received.

Out-of-Pocket Damages

Difference between the value given and the value received.

Punitive Damages

Are generally not recoverable for breach of contract.

Liquidated Damages

Reasonable damages agreed to in advance by the parties to a contract.

Foreseeability of Damages

Potential loss that the party now in default had reason to know of when the contract was made.

Certainty of Damages

Damages are not recoverable beyond an amount that can be established with reasonable certainty.

Mitigation of Damages

Injured party may not recover damages for loss he could have avoided by reasonable efforts.

Specific Performance

Court decree ordering breaching party to render promised performance.

Injunction

Court order prohibiting a party from doing a specific act.

Reformation

Court order correcting a written contract to conform with the original intent of the contracting parties.

Restitution

Restoration of the injured party to the position she was in before the contract was made.

Election of Remedies

If remedies are not inconsistent, a party injured by a breach of contract may seek more than one.

Loss of Power of Avoidance

A party with the power to avoid a contract may lose that power by affirming the contract, delaying unreasonably in exercising the power of avoidance, or being subordinated to the intervening rights of third parties.