Blaw Exam 3: Breach of Contract and Remedies

most contracts discharged by

complete / strict performance of contracting parties

complete performance

when a party renders performance exactly as the contract requires

substantial performance

when there has been a minor breach of contract

inferior performance: material breach

when a marty renders inferior performance that impairs/destroys essence of the contract

when there has been a material breach

non-breaching party may either: rescind the contract and seek restitution of any compensation paid OR sue the breaching party to recover damages

anticipatory breach

hasn’t happened yet, when one party informs other party in advance that it will not perform contractual duties (non-breaching party’s obligations are discharged immediately)

compensatory damages

non-breaching party is compensated for the loss of the bargain, as if the contract had been fully performed

sale of a good

damages = contract price – market price

construction contract

arises when owner of real prperty contracts to have something built; compensatory damages for a breach of contract vary with stage of completion when the breath occurs

consequential damages

FORSEEABLE damages from circumstance outside the contract

nominal damages

$1, just to say they won

mitigation of damages

if contract breached, duty placed on nonbreaching party to try to mitigate resulting damages

liquidated damages

the parties agree in advance to the amount of damages payable on a breach of contract, the actual damages MUST be difficult or impractical to determine

penalty

a liquidated damages clause is considered a penalty if actual damages are clearly determinable, or if the liquidated damages are unreasonably high

rescission

an action to undo a contract, available if there has been material breach, fraud, duress, undue influence, or mistake

restitution

return of goods received from other party (consideration) to rescind a contract. If goods not available, then cash equivalent

equitable remedies

last resort only if money is not sufficient

specific performance

land, antiques, NO service contracts. Orders breaching party to perform acts of contract.

land is always

specific performance

reformation

parties made a mistake in what they wrote down

injunction

court order that prohibits person from doing certain act. Requesting party must show that they will suffer injury if injunction is not issued.

intentional interference with contraction relations

a tort where a third party interferes with a contract and causes one party injury, no matter the intent