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20 terms

CH 18 Business Law

EY
STUDY
PLAY
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