MANGMT 3540 1st Edition Lecture 16 Outline of Last Lecture I Complete Performance II Material Breach III Occurrence or Failure of Condition IV Agreement of Parties V Discharge by Operation of Law VI Compliance with Court Ordered Remedy Outline of Current Lecture VII Types of interests of non breaching parties VIII Six categories of money damages Current Lecture I Types of interests of non breaching parties A Expectation interest i The non breaching party gets the benefit of the bargain ii Example deal to buy car for 10 000 then seller cancels I buy for 12 000 I can then sue for 2 000 B Reliance interest i The non breaching party receives the cost of partial performance or preparation to perform ii Example cost incurred due to reliance upon purchasing an item C Restitution interest i One party receives the value of the benefit conferred on the other party ii Example quasi contract implied in law II Six categories of money damages A Compensatory direct damages i Buyer of goods recovers cover price minus contract price for seller s breach These notes represent a detailed interpretation of the professor s lecture GradeBuddy is best used as a supplement to your own notes not as a substitute B C D E F ii Buyer of services recovers cover price minus contract price for provider s breach iii Seller of goods recovers contract price minus fair market value for buyer s breach iv Provider of services recovers lost profit plus cost of partial performance or contract price if complete performance Consequential Damages i Indirect foreseeable damages ii Lost profits are consequential damages iii To recover lost profits one must prove 1 They were foreseeable and 2 There is evidence of specific loss based on historical sales iv Hadley vs Braxendale transport company could not foresee mill operator s lost profits Incidental Damages i Cost of finding substitute performance cost of mitigation ii Mitigation of damages Non breaching party is usually required to make reasonable efforts to lessen damages from breach iii Examples 1 Mitigation in lease situation 2 what is reasonable Punitive exemplary damages i Damages awarded to punish the defendant and to deter others from similar conduct ii Typically available only for intentional torts iii Not available for breach of contract but are available for fraud which arises in a contract setting Nominal damages i A small amount of damages given to a party who wins but can show no monetary injury ii Examples 1 Auto accident where no injury 2 Trespass action 3 Employment discrimination Liquidated damages i Defined damages in a fixed amount agreed on by the parties prior to any breach ii Requirements for recovery 1 Damages difficult to estimate 2 Reasonable amount unreasonable penalties are not enforceable iii Penalties as legally defined are unenforceable but the fact that I call liquidated damages a late payment penalty is irrelevant
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