CH 18 Business Law

Created by xpologuy 

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20 terms · EY

A breach of contract entitles the non-breaching party to sue for what?

Monetary Damages

4 broad categories of damages

Compensatory, Consequential, Punitive, Nominal

Compensatory Damages

compensate the nonbreaching party for the loss of the bargain

Standard measure of compensatory damages is...

the difference between the value of the breaching party's promised performance under the contract and value of her or his actual performance

Expenses that are caused by a breach of contract-such as those incurred to obtain performance from another source known as

Incidental Damages

Consequential Damages(Special Damages)

Foreseeable damages results from a party's breach of contract ...flow from the consequences, or results, of a breach

Nominal Damages

When no actual damage or financial loss results from a breach of contract and only a technical injury is involved....small such as a dollar...basically to prove someone is right

Mitigation of Damages

When a breach of contract occurs, innocent party is held to a duty to mitigate, or reduce, the damages that he or she suffers. Duty owed depends on the nature of the contract

Liquidated Damages

Certain dollar amount is to be paid in the event of a future default or breach of contract

Penalties

Specifies a certain amount to be paid in the event of a default or breach of contract and is designed to penalize the breaching party

To Determine if a particular provision is for liquidated damages or for a penalty the court asks...

1) When the contract was entered into, was it apparent that damages would be difficult to estimate in the event of a breach

2) Was the amount set as damages a reasonable estimate and not excessive

Restitution

To rescind a contract must make restitution to each other by returning goods, property, or funds previously conveyed. If the goods have been consumed, restitution must be made in an equivalent dollar amount

Specific Performance

Calls for the performance of the act promised in the contract...usually won't be granted unless the party's legal remedy of monetary damages is inadequate

Reformation

Equitable remedy used when the parties have imperfectly expressed their agreement in writing. Allows a court to rewrite the contract to reflect the parties' true intentions

Quasi Contract

Legal theory under which an obligation is imposed in the absence of an agreement...Allows a court to act as if a contract exists when there isn't one

Quantum Meruit

As much as he or she deserves...entitled to

In order to recover under quasi contract, the party seeking recovery must show the following;

1) The party has conferred a benefit on the other party
2) The party conferred the benefit with the reasonable expectation of being paid
3) The party did not act as a volunteer in conferring the benefit
4) The party receiving the benefit would be unjustly enriched if allowed to retain the benefit without paying for it

Election of Remedies

Prevents double recovery...UCC rejects it

Waiver

Right to require satisfactory and full performance...Willing to accept a defective performance of the contract

Exculpatory Clauses

No damages can be recovered

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