Contract Final Essay: Damages

I: Whether UCC or common law governs

R: UCC governs the sale of tangible, movable goods and common law governs everything else

I: What is the loss in value

R: Loss in value is the difference between what a party expected to receive and what they did receive

I: What is other loss

R: Other loss includes incidental and consequential damages:

1. incidental damages include additional costs incurred after the breach in a reasonable attempt to avoid loss, even if the attempt was unsuccessful, and

2. consequential damages include items like injury to property and person caused by breach and loss of profits on a collateral contract that are foreseeable or reasonably certain

I: What is the cost avoided?

R: Further expenditure saved, such as wages not paid

I: What the loss avoided?

R: Damages mitigated through reallocation or resources to other projects

I: Were the damages foreseeable? DEFENSE

R: 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

I: Were the damages reasonably certain? DEFENSE

R: Damages must be reasonably certain in both nature and origin. Neither can be speculative.

1. nature means it is reasonably quantifiable in a dollar amount, and

2. origin means tat it is resulting from the breach

I: Did the employee satisfy the duty to mitigate? DEFENSE

R:

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 unsuccesful efforts to avoid loss

I: What is the general measure of damages?

R: GM = loss in value + other loss - cost avoided - loss avoided

I: Was there proper agency?

R: PICK ONE

1. actual authority: pricipal tells agent the agent can do the act in question

2. apparent authority: principal has said or done something that leads a third party to tbelieve that the agent has the power to do the act in question

3. Inherent authority: by virtue of the agent’s position, the agent has the power to do the act in question

4. Ratification: approval of act in question by principal after the act occurs