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When someone fails to perform a duty w/o a valid excuse


Method a court uses to compensate an injured party. Focus is how to help the injured party w/o unfairly harming the other person.

Types of Remedies

2.Expectation damages
3.Specific performance
4.Liquidated damages clause


An order forcing someone to do something or refrain from doing something

Expectation damages

Money required to put one party in the position she would have been in had the other side performed the contract

Specific performance

Used in cases of rare property. Forces both parties to complete the deal.

What assets are included in specific performance

1.rare works of art
2.Real Estate
3.secret formulas
5.shares in closely held corp.

Liquidation damages clause

Condition in contract that declares in advance what one party will receive if other breaches.


Legal right in something such as a contract

What is the 1st step a court takes in choosing a remedy?

Identify the interest it is protecting

What are the 4 principal contract interests a court may seek

1.Expectation interest
2.Reliance Interest
3.Restitution Interest
4.Equitable Interest

Expectation Interest

Puts the injured party in the position she would have been in had both sides fully performed

What are the 3 components of Expectation interest

1. Compensatory damages
2. Consequential damages
3. Incidental damages

Compensatory damages

flow directly from the contract as a result of breach. injured party must prove with reasonable certainty that breach caused damages.

Consequential damages

result from the unique circumstances of the particular injured party. Injured may recover only if breaching party should have foreseen them

Incidental damages

minor costs an injured party incurs responding to a breach.

Reliance Interest

Puts the injured party in the position he would have been in had the parties never entered into a contract. focuses on the time and money that the injured spent performing his part of agreement. If there is no valid contract court may reward reliance damages under promissory damages.

Restitution Interest

returns to the injured party a benefit that he has conferred on the other party, which it would be unjust to leave with that person.

Equitable Interest

results when the money is not enough to help the injured.

What are the remedies under Equitable Interest

1.Specific performance-court orders parties to perform
2.Injunction-court order requiring someone to do or refrain from doing something
3.Reformation-court will partially re-write a contract if thinks written agreement has simple mistake or to save it

What are special issues of damages

Nominal damages
Liquidation damage clause
Punitive damages


May not recover for damages he could have avoided with reasonable efforts

Nominal damages

a token sum, such as a $1, given to an injured plaintiff who cannot prove damages

Punitive damages clause

designed not to compensate the injured party but to punish the breaching party

3 guideposts courts must consider in granting punitive damages

1.reprehensibility of conduct
2.ratio between harm suffered and award
3.difference between punitive award and civil penalties used in similar cases

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