LSB 3213 1st Edition Lecture 21Today:- Discuss Exams 2 and 3- Begin Remedies, Torts, and Criminal LawRecap Exam 2:- Nice work!- Top scores and average scoreso Average score: 79-80%o Highest score, set curve, missed two questions, 109%o Extra Credit Assignment grades posted- Calculationso 2 question curve (100% = 31 questions correct)o 33 questions x 3 points = 99 points (+1 = 100)o Extra credit points added to scorePreview of Exam 3:- Learn terminology and apply to scenarios- Not a cumulative exam, except for- Four legal philosophies- Common law principles- Same format as previous exams- Study guide and optional extra credit assignment- Third and Final Exam- Thursday, May 7- 10:00 – 11:50- Same classroom (Physical Sciences 110)- Exam 1: constitutional law, legal system- Exam 2: putting deals together (contracts)- Exam 3: when things go wrong (remedies, torts, criminal law)Current Events- CrowdfundingThese 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.o Can contribute money to projects online and are rewarded for the amount of money donated. o The Crowd Fund Act was passed last year that made sharing stock as a reward to giving money to a project legal.- Blue Bell Ice Creamo A Blue Bell production facility was shut down in Broken Arrow because the ice cream was contaminated with listeria and killed people in Kansaso Could those affected sue the factory based on public safety? This is where torts come in- when you are wronged in someway not related to contracts- Germanwings Crasho Airplane co-pilot intentionally crashed the plane into the Alps. How could the airline be sued and based on what?Remedies for Breach of Contract- 4 types of damages (money)o Party that suffered the loss is able to get the “benefit of the bargain”- what they bargained for/agreed to in the contract is what the court will give you- 5 types of equitable remedies- Conceptually: benefit of the bargainDamages- Compensatory: direct losses, costs (and incidentals)o Direct damages and incidentals that you actually lost; these can always be won inlawsuit (if you win the lawsuit)o Example: if you buy 10 apples for $10 and they are rotten, you could get the $10 back, and if you had to pay $5 to ship the apples back, you could get that money back as well- Consequential: indirect, foreseeable losses (special)o Damages caused by the breach of contract o Example: if you ate the rotten apples and got sick, you could sue to recover your medical costs.o These are not guaranteed to be paid backo The issue: how far can you take/get the consequential damages Test: are the damages forseeable?- Punitive: punish and deter wrongdoingo This is rare in contract damages- they only care about benefit of the bargain and related damages- Nominal: moral victory; wrongdoing w/o financial losso You won the case, but no financial damages are awardedEquitable Remedies:- Rescission: undo the contract, pretend it never happenedo Seen if you sue based on mistake or misrepresentation- Restitution: give back the goods; pay back the moneyo Seen in equitable remedies ie. Unjust enrichment- Specific Performance: take an actiono Court ordered to do somethingo Example: sell the house, disclose the information, deliver the goods- Injunction: don’t take an action- Reformation: rewrite the contract; correct an errorDamages Example: Contract for Scarves:Factory sells 300 scarves to retail store for $3,000, to be delivered on Friday. Then the store saysthat they no longer want them/refuse them, and this is a valid contract. What damages/ remedies can they sue for?- Direct damages: $3,000 (plus any incidentals)What if factory has not made any scarves yet when the store decides that they changed their mind?- Lost profits: $3,000 - $2,500 costs = $500 (benefit of the bargain)What if after the store refuses delivery, factory sells to another customer for $2,000?- Can recover $1,000 after mitigation of damages (still sell the scarves)What if the factory sells to another store for $4,000?- Nominal damages only- the court says you win, but you don’t win any damages because they made more due to the breach of contract (economics vs. morality)What if the store paid $3,000 to the factory, but factory fails to deliver?- Rescission and restitution: $3,000 recoveryWhat if the store mitigated damages and bought replacement scarves for $4,000 from another factory. Can they recover damages from the original factory?- If the store had paid the original factory $3,000, then store recovers the $3,000 plus $1,000 in additional costWhat if the store had not paid the original factory yet?- The store recovers $1,000 against the original factory ($4,000 - $3,000)What if the store failed to mitigate the damages?- No recovery, or reduced recoveryWhat if late delivery (had to be there by Friday) caused store to miss scarf festival, a large event to sell scarves at?- Lost profits, if 1) foreseeable and 2) proven with reasonable certaintyo Foreseeable: shown by communicating in advance, not foreseeable if they didn’t tell the factory about the festivalo Reasonable certainty: if the festival happens every year for the past five years, forexampleConsequential Damages:- Two factor analysis:- Reasonably foreseeable- Provable with reasonable certainty- Scarves example: consequentials due to lost profits- Software failure example: a software company simplifies the process for hospitals to order supplies. But when the software wouldn’t integrate into hospitals operating system for 7 months, the hospital had to hire a staff to manually order products. So the hospital can sue for consequential damages as it was foreseeable that damages would be incurredo consequentials due to costs incurredUnique Goods:- Common in real estate; can easily sue for specific remedy- If a bank buys antique art from gallery for $25 million and the gallery fails to deliver, what are the bank’s remedies?o Rescission and restitution: money back- Specific performance: unique, no substitutes- What if bank contracted with painter, not gallery? Can you force the painter to finish the paintings?- No, this looks like involuntary servitude, and it’s too difficult to monitor quality. Can’t suefor specific performance for personal