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For Exam 3


If breach of contract, what can I do about it?

General Remedy Rule

● Innocent Party should be placed IF POSSIBLE in exactly the same position as if guilty party had performed contract
● "Benefit of the Bargain"

Hairy Hand Case

● NYC mother in apartment with child
● Child grabs electric cord - gets 3rd degree burns
● Takes to hospital - if pay $, then doctor will take skin from thigh to cover the hand
● Hair follicle from thigh starting growing in the hand
● Hand doesn't look exactly like the other hand = breach of contract

3 Types of Remedies Under Contract Law

● Damages
● Specific Performance
● Unilateral Rescission


Money [aid to the innocent party by the guilty party

Specific Performance

Requiring the guilty party to perform contract

Unilateral Rescission

Allowing the innocent party to cancel the contract and (try to) return to pre contract position

4 Types of Damages

● Compensatory
● Expectancy
● Consequential
● Liquidated

Compensatory Damages

● Amount of money to compensate innocent party for the money the innocent party spent to perform their part of the contract
● "Costs"
● Labor and Material Costs

Expectancy Damages

● Money the innocent party expected to receive and keep if contract was fully performed
● "Profit"
● If performance isn't 100%, then these damages can't be greater than if performed completely and received damages

Consequential Damages

● Money paid to innocent party for reasonably foreseeable future damages to innocent party resulting from guilty party breach
● Reasonably foreseeable by guilty party at time of contract
● Future damages to innocent party related to guilty party's breach of THIS CONTRACT
● Involves 3rd party - usually person dealing with innocent party - but not always

Baden Vs. Curtiss Breeding Service

● Inseminate cows
● "Stud was a dud"
● Court didn't grant consequential damages

Liquidated Damages

● Previously agreed damage amount
● In lieu of consequential damages, and maybe compensatory and expectancy above
● Why? - because people are risk averse

Specific Performance

● Make the guilty party perform the contract
● When money damages are inadequate because subject matter in unique (land, jewelry, racehorses)
● Positive & Negative

Positive Specific Performance

● Require guilty party to perform contract because no other remedy can put innocent party in same position
● For personal services, can only use if government-safety-related
● Professional sports - can't make them perform

Negative Specific Performance

● Require guilty party not to do what guilty party agreed no to do in contract
● Injunction or Restraining Order
● Covenants not to perform
● Employee contracts - "The Sopranos"

Unilateral Rescission

● If not possible to give innocent party benefit of bargain
1. Permits IP to cancel contract - only IP
2. Returns IP to pre contract position or as closely as possible
● Least preferable of remedies - Why?
● doesn't give IP "benefit of bargain"

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