Expenses that are caused directly by a breach of contract (incurred to obtain performance from another source
When no actual damage or financial loss results from a breach of contract, and only a technical injury is invovled
Mitigation of Damages
The innocent, injured party is held to a duty to reduce the damages that they suffer
When rescinding a contract, each party must return the goods, property, or funds previously conveyed
Equitable remedy used when the parties have imperfectly expressed their agreement in writing, allows the court to rewrite the contract to reflect the parties true interactions
Ray breaches his lease with Sunny Properties and vacates the premises six months before the end of the term. In some states, Sunny would have to
make reasonable efforts to relet the premises to mitigate damages.
A contract may include a clause stating that no damages can be recovered for a certain type of breach
Grady enters into a contract to buy 440 acres from Hollis to expand Grady's ranch. Hollis breaches the contract. Grady's normal remedy is
Development Associates (DA) agrees to buy five acres of land from Eastside Properties for $15,000. Eastside fails to go through with the deal on the agreed date, when the market price of the land is $17,000. DA may recover
SFX Paintball Games, Inc., and Truck & Trailer Delivery Corporation sign an agreement that provides for the payment of "$1,000 by whichever party commits a material breach of the contract that creates damages difficult to estimate but approximately $1,000." This is
a liquidated damages clause.
Clear Creek Corporation enters into a contract with Brightside Management Associates to manage and maintain Clear Creek's apartment complex. Their contract provides that neither party can recover damages for a non-fraudulent or unintentional breach. This is
a limitation-of-liability clause.
Fidelio Corporation enters into a contract with Equi Insurance, Inc., to obtain health insurance for Fidelio employees. Equi breaches the contract. If Fidelio is awarded compensatory damages, the purpose would be to
provide Fidelio with funds for its loss of the bargain.
Vacation Vistas, Inc., agrees to sell certain acreage to Umiko, who intends to develop a destination resort. Vacation Vistas repudiates the deal. Umiko sues Vacation Vistas and recovers damages. She can now obtain
Office Accounting, Inc., hires Perry to repair a computer on site for $400, but Perry does not show up as agreed. Office Accounting hires Raul to do the job for $350. Office Accounting may recover from Perry
Ordinarily, the remedy for a seller's breach of a contract for a sale of real estate is damages.
Consumer Credit Union pays Derby $10,000 to design an ad campaign. The next day, Derby tells the credit union that he has accepted a job in Boston and cannot design the campaign. As compensatory damages, the credit union can recover