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Restatement (Second) of Contracts § 344.
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1What three possible interests do remedies for breach of contract protect?
What three possible interests do remedies for breach of contract protect?2Is a nonbreaching party still entitled to recover damages if a breach of contract caused no loss?
Is a nonbreaching party still entitled to recover damages if a breach of contract caused no loss?3In a contract for the sale of goods, what remedies are available to the seller upon the buyer’s breach?
In a contract for the sale of goods, what remedies are available to the seller upon the buyer’s breach?4In a contract for the sale of goods, what remedies are available to the buyer upon the seller’s breach?
In a contract for the sale of goods, what remedies are available to the buyer upon the seller’s breach?5Does a buyer who rightfully rejects or revokes acceptance of nonconforming goods retain a security interest in the goods?
Does a buyer who rightfully rejects or revokes acceptance of nonconforming goods retain a security interest in the goods?6What are expectation damages?
What are expectation damages?7How are expectation damages calculated?
How are expectation damages calculated?8An employer and an employee had a one-year employment contract. In the contract, the employer agreed to pay the employee $3,000 per month. The empl...
An employer and an employee had a one-year employment contract. In the contract, the employer agreed to pay the employee $3,000 per month. The employee worked the first six months of the contract, but then the employer wrongfully dismissed the employee. It took the employee two months to find a new, equivalent job. However, the employee’s new job only paid $2,500 per month.What are the employee’s expectation damages for the employer’s breach of the employment contract?9If a breach of contract causes the nonbreaching party to lose business volume, is the entire amount of that lost volume recoverable as expectation ...
If a breach of contract causes the nonbreaching party to lose business volume, is the entire amount of that lost volume recoverable as expectation damages?10A celebrity contracted with a manufacturer to endorse a product for a $5 million fee. The manufacturer repudiated the contract and refused to go fo...
A celebrity contracted with a manufacturer to endorse a product for a $5 million fee. The manufacturer repudiated the contract and refused to go forward with the deal. A month later, the celebrity entered into a $6 million endorsement contract with another company. The celebrity sued the manufacturer for the $5 million fee. The manufacturer argued that the celebrity had not suffered any damages, because the celebrity had entered into a substitute transaction for a higher fee. The celebrity responded that the contract with the manufacturer did not forbid the celebrity from endorsing other products and that the celebrity could have, and would have, entered into the second contract even if the manufacturer had not breached. The celebrity thus argued that he should have earned $11 million instead of just $6 million. Is the celebrity entitled to recover the $5 million?11If a buyer breaches a contract for the sale of goods by refusing to accept delivery of conforming goods, what are the seller’s three possible measu...
If a buyer breaches a contract for the sale of goods by refusing to accept delivery of conforming goods, what are the seller’s three possible measures of expectation damages?12If a buyer breaches a contract for the sale of goods by failing to pay the price as it becomes due, how are the seller’s expectation damages measured?
If a buyer breaches a contract for the sale of goods by failing to pay the price as it becomes due, how are the seller’s expectation damages measured?13If a seller breaches a contract for the sale of goods by delivering nonconforming goods, how are the buyer’s expectation damages measured?
If a seller breaches a contract for the sale of goods by delivering nonconforming goods, how are the buyer’s expectation damages measured?14What are incidental damages?
What are incidental damages?15What does the term cover mean with respect to a contract for the sale of goods?
What does the term cover mean with respect to a contract for the sale of goods?16Does the UCC permit a buyer of goods to recover incidental damages upon a seller’s breach?
Does the UCC permit a buyer of goods to recover incidental damages upon a seller’s breach?17Does the UCC permit a seller of goods to recover incidental damages upon a buyer’s breach?
Does the UCC permit a seller of goods to recover incidental damages upon a buyer’s breach?18What are consequential damages?
What are consequential damages?19If a seller breaches a contract for the sale of goods, does the UCC permit the buyer to recover consequential damages?
If a seller breaches a contract for the sale of goods, does the UCC permit the buyer to recover consequential damages?20To recover damages from a defendant for a breach of contract, must the plaintiff prove that the defendant’s breach was the sole cause of the plaint...
To recover damages from a defendant for a breach of contract, must the plaintiff prove that the defendant’s breach was the sole cause of the plaintiff’s loss?21May a nonbreaching party recover damages for loss that the breaching party could not have reasonably foreseen as a probable result of the breach?
May a nonbreaching party recover damages for loss that the breaching party could not have reasonably foreseen as a probable result of the breach?22A customer contracted with a taxi company for a ride to the airport. The taxi driver arrived 45 minutes late to pick up the customer, causing the c...
A customer contracted with a taxi company for a ride to the airport. The taxi driver arrived 45 minutes late to pick up the customer, causing the customer to miss her flight and waste a nonrefundable airline ticket.Is the taxi company liable for the cost of the customer’s wasted ticket?23May a nonbreaching party recover damages for a loss that cannot be proven to a reasonable degree of certainty?
May a nonbreaching party recover damages for a loss that cannot be proven to a reasonable degree of certainty?24A fabric maker contracted to sell cloth to a tailor for the tailor’s use in making custom garments. However, the cloth had a latent defect that res...
A fabric maker contracted to sell cloth to a tailor for the tailor’s use in making custom garments. However, the cloth had a latent defect that resulted in its rapid deterioration. As a result, all the garments made from the cloth were returned by the tailor’s customers. The tailor had to refund its customers’ payments and lost all the profits that it would have made on those sales. Is the tailor entitled to seek its lost profits from the fabric maker as damages for the fabric maker’s breach of the cloth contract?25Is a party able to recover damages for a loss of future profits due to a breach of contract if the claimed amount is purely speculative?
Is a party able to recover damages for a loss of future profits due to a breach of contract if the claimed amount is purely speculative?26What are liquidated damages?
What are liquidated damages?27A quarry contracted with a crusher to process the quarry’s gravel. The contract listed the price to be paid to the crusher for each ton of gravel p...
A quarry contracted with a crusher to process the quarry’s gravel. The contract listed the price to be paid to the crusher for each ton of gravel processed. The contract also said that: (1) the quarry guaranteed that it would ship a specified minimum amount of gravel to the crusher each month, and (2) if the quarry failed to ship the minimum amount, the quarry would still pay the crusher the contract price for that minimum amount. For several months, the quarry shipped significantly less than the minimum amount. The crusher demanded payment of the price for the minimum amount for those months. However, the quarry refused to pay, arguing that the guaranteed-payment provision was an invalid penalty. Is the quarry correct that the guaranteed-payment provision is an invalid penalty?28A contract for the sale of goods stated: “If the buyer unjustifiably rejects delivery of the goods, then the buyer will be liable for the full pric...
A contract for the sale of goods stated: “If the buyer unjustifiably rejects delivery of the goods, then the buyer will be liable for the full price of the goods.”Is this provision a valid liquidated-damages provision?29Is a contract provision that sets a maximum amount a party will pay in damages in the event of a breach a liquidated-damages provision?
Is a contract provision that sets a maximum amount a party will pay in damages in the event of a breach a liquidated-damages provision?30A warehouse contracted with an alarm company to install a security system. The contract said that if the system failed, the alarm company’s liabili...
A warehouse contracted with an alarm company to install a security system. The contract said that if the system failed, the alarm company’s liability for any resulting loss or damage would be “limited to liquidated damages of $500.” The system failed during a burglary, resulting in the loss of $250,000 worth of goods. The alarm company only agreed to pay the $500 of damages set out in the contract for a system failure, arguing that the contract limited its liability to that predetermined amount. The warehouse claimed that the contract’s damages provision was unenforceable, because it was not a reasonable forecast of the probable damages resulting from a breach of the contract.Is the damages provision enforceable?31May a nonbreaching party recover damages for loss that she could have avoided without undue risk, burden, or humiliation?
May a nonbreaching party recover damages for loss that she could have avoided without undue risk, burden, or humiliation?32If a party to a contract continues to perform under the contract after the other party has clearly and totally repudiated the contract, may the per...
If a party to a contract continues to perform under the contract after the other party has clearly and totally repudiated the contract, may the performing party claim the contract price for the post-repudiation performance?33If a nonbreaching party mitigates damages by entering a substitute contract, are the economic gains from the substitute contract offset against the...
If a nonbreaching party mitigates damages by entering a substitute contract, are the economic gains from the substitute contract offset against the damages resulting from the breach?34A school wrongfully dismissed a coach six months before the end of the coach’s contractual term of employment. After three months of searching for ...
A school wrongfully dismissed a coach six months before the end of the coach’s contractual term of employment. After three months of searching for a new job, the coach secured a coaching position at another school. In that three-month period, the coach needed to earn something to pay rent and buy food, so he took a temporary job as a security guard at a mall.If the coach claims breach of contract damages from the school, must his earnings as a security guard be deducted from his damages?35After one party breaches a contract, must the nonbreaching party enter into an exact substitute transaction to satisfy its duty to mitigate damages?
After one party breaches a contract, must the nonbreaching party enter into an exact substitute transaction to satisfy its duty to mitigate damages?36If a party has breached a contract but assures the nonbreaching party that his performance will be forthcoming, is it reasonable for the nonbreachi...
If a party has breached a contract but assures the nonbreaching party that his performance will be forthcoming, is it reasonable for the nonbreaching party to continue to perform under the contract?37What is rescission?
What is rescission?38Is rescission available as a remedy for a nonmaterial breach of contract?
Is rescission available as a remedy for a nonmaterial breach of contract?39A buyer paid a seller $250,000 for an intricate wood-inlay table. The seller told the buyer that the table was an antique made in France during the...
A buyer paid a seller $250,000 for an intricate wood-inlay table. The seller told the buyer that the table was an antique made in France during the eighteenth century. A month later, the buyer decided to resell the table and had it appraised. The appraisal revealed that the table was a modern forgery and not a genuine antique. Had it been genuine, the table would have been worth $300,000. As a forgery, it was worth $200. The buyer can prove that, at the time of the sale, the seller knew the table was a fake and therefore committed fraud. Assuming the buyer can rescind the contract based on the seller’s fraud, will the buyer be able to recover the $250,000 he paid the seller for the table?40Is rescission available even if the defendant cannot be returned to the status quo as it existed before the material breach?
Is rescission available even if the defendant cannot be returned to the status quo as it existed before the material breach?41In general, if one party has materially breached a contract and the nonbreaching party says she is rescinding the contract in response to the breac...
In general, if one party has materially breached a contract and the nonbreaching party says she is rescinding the contract in response to the breach, has the nonbreaching party abandoned the right to claim expectation damages?42If a buyer or seller in a contract for the sale of goods uses the word “rescission” or “cancellation,” does the UCC bar a claim for damages arising...
If a buyer or seller in a contract for the sale of goods uses the word “rescission” or “cancellation,” does the UCC bar a claim for damages arising from the antecedent breach of contract?43What is reformation?
What is reformation?44Is reformation available as a remedy for a mutual mistake?
Is reformation available as a remedy for a mutual mistake?45Does the parol evidence rule preclude evidence supporting the reformation of a contract to correct a transcription error?
Does the parol evidence rule preclude evidence supporting the reformation of a contract to correct a transcription error?46A buyer and a seller agreed orally to the sale of the seller’s house for $650,000. In drafting the subsequent written agreement, the seller made a ...
A buyer and a seller agreed orally to the sale of the seller’s house for $650,000. In drafting the subsequent written agreement, the seller made a typographical error by transposing the numbers in the price so that it read $560,000. Neither party noticed the error when they signed the written agreement. The buyer died shortly afterward, before the sale closed. The buyer’s estate demanded that the seller complete the transaction by transferring the house for $560,000. Does the seller have a way to correct the agreement and transfer the house for the $650,000 price?47Under what circumstances is reformation available as a remedy for misrepresentation?
Under what circumstances is reformation available as a remedy for misrepresentation?48What is specific performance?
What is specific performance?49In general, what must a plaintiff show to obtain an order for specific performance?
In general, what must a plaintiff show to obtain an order for specific performance?50A buyer agreed to buy a seller’s house. After the agreement of sale had been signed but before the transaction closed, the seller became seriously ...
A buyer agreed to buy a seller’s house. After the agreement of sale had been signed but before the transaction closed, the seller became seriously ill with an aggressive neurological condition that confined the seller to her bed or a wheelchair. The seller no longer wished to move from her familiar surroundings, so she cancelled the sale of the house. The buyer loved the seller’s house because of its unique design and location. The buyer thus decided to seek a decree specific performance compelling the seller to consummate the sale. The buyer was able to demonstrate that the terms of the parties’ contract were coherent and definite, that damages would not be an adequate remedy because of the unique nature of the house, and that the court could administer and supervise the transfer of the house. Will the buyer be able to obtain a decree of specific performance?51In evaluating whether damages would be an inadequate remedy, as required for a party to be entitled to specific performance of a contract, do court...
In evaluating whether damages would be an inadequate remedy, as required for a party to be entitled to specific performance of a contract, do courts consider the likelihood of collecting damages?52Under the UCC, what must a buyer of goods typically show to obtain an order of specific performance that compels the seller to deliver the goods?
Under the UCC, what must a buyer of goods typically show to obtain an order of specific performance that compels the seller to deliver the goods?53May a party to a contract enjoin the other party from breaching the contract?
May a party to a contract enjoin the other party from breaching the contract?54What must a party to a contract show to obtain an injunction?
What must a party to a contract show to obtain an injunction?55A company entered into an employment contract with an engineer under which it hired the engineer to run its research and development department, wh...
A company entered into an employment contract with an engineer under which it hired the engineer to run its research and development department, which involved work with proprietary information and trade secrets. The contract contained a noncompetition clause that prohibited the engineer from working for any competitor of the company for one year after leaving the company’s employment. Six months after entering the contract, the engineer resigned and went to work for a direct competitor of the company, which develops similar programs for customers in the same market. Assuming the noncompete clause is valid and enforceable, should the company be able to obtain an injunction barring the engineer from working for its competitor for a year?56Under what circumstances would a court deny specific performance or an injunction because the relief is unfair?
Under what circumstances would a court deny specific performance or an injunction because the relief is unfair?57If a party to a contract retains a right of termination, will a court enter an order for specific performance or an injunction against that party?
If a party to a contract retains a right of termination, will a court enter an order for specific performance or an injunction against that party?58Can a nonbreaching party receive both an injunction and monetary compensation for a breach of contract?
Can a nonbreaching party receive both an injunction and monetary compensation for a breach of contract?59What are performance-based damages?
What are performance-based damages?60What are reliance damages?
What are reliance damages?61What are restitution damages?
What are restitution damages?62A seller spent $5,000 to draft blueprints for the design of a custom-built machine ordered by a buyer. Without ever seeing or taking the blueprints...
A seller spent $5,000 to draft blueprints for the design of a custom-built machine ordered by a buyer. Without ever seeing or taking the blueprints, the buyer totally and materially repudiated the contract.Is restitution a proper basis for the seller’s recovery of the $5,000?63A buyer bought a condominium from a seller for $300,000. The buyer made a $30,000 down payment to the seller at the time of signing the contract. A...
A buyer bought a condominium from a seller for $300,000. The buyer made a $30,000 down payment to the seller at the time of signing the contract. A few weeks before the closing, the seller reneged on the contract and sold the condominium to someone else. The buyer managed to find an identical unit in the same building for $290,000 and bought it. Which two types of damages allow the buyer to recover the $30,000 down payment from the seller?64A builder entered into a contract with a homeowner to renovate the homeowner’s kitchen for a price of $60,000. The builder had underestimated the a...
A builder entered into a contract with a homeowner to renovate the homeowner’s kitchen for a price of $60,000. The builder had underestimated the amount of labor required and would have made no profit on the job. When the work was half completed, the homeowner unjustifiably fired the builder, materially breaching the contract. At that time, the builder had already done $40,000 worth of work, and the homeowner had not yet made any payments to the builder. The builder decided not to sue for expectation damages under the contract, because he could recover only $30,000 (i.e., the contract value for the half of the work the builder had completed at the time of the breach, because the builder had no expectation of profit on the job).If the builder instead rescinds the contract and sues the homeowner for restitution, will the builder be entitled to recover $40,000?65May a party recover incidental and consequential damages, in addition to performance-based damages?
May a party recover incidental and consequential damages, in addition to performance-based damages?66May a party who has performed under a contract that is unenforceable recover in restitution?
May a party who has performed under a contract that is unenforceable recover in restitution?67May a party recover the value of her performance given under a contract that is unenforceable due to indefiniteness if the party has also received ...
May a party recover the value of her performance given under a contract that is unenforceable due to indefiniteness if the party has also received the counterperformance specified in the unenforceable contract?68Is a claimant always required to show unjust enrichment to recover in restitution after performing under a contract that is unenforceable due to il...
Is a claimant always required to show unjust enrichment to recover in restitution after performing under a contract that is unenforceable due to illegality?69May a party who has performed under a contract that is unenforceable due to the other party’s incapacity recover in restitution?
May a party who has performed under a contract that is unenforceable due to the other party’s incapacity recover in restitution?70May a claimant who has performed under a contract that is unenforceable due to mistake or change in circumstances recover in restitution?
May a claimant who has performed under a contract that is unenforceable due to mistake or change in circumstances recover in restitution?71May a party who has performed under a contract that is unenforceable due to mistake or change in circumstances recover in restitution without provi...
May a party who has performed under a contract that is unenforceable due to mistake or change in circumstances recover in restitution without proving unjust enrichment?72If a party performs a disputed obligation under a contract, may he later recover in restitution if it is determined that his performance was not owed?
If a party performs a disputed obligation under a contract, may he later recover in restitution if it is determined that his performance was not owed?73Is a party who has materially breached a contract entitled to recover the contract price of her performance up to the time of the breach?
Is a party who has materially breached a contract entitled to recover the contract price of her performance up to the time of the breach?74What is a divisible contract?
What is a divisible contract?75A builder contracted with the county to build a bridge over a river. The contract did not say that it was divisible, but it specified the price for...
A builder contracted with the county to build a bridge over a river. The contract did not say that it was divisible, but it specified the price for every stage of the work. The builder erected part of the bridge before committing a total and material breach by abandoning the work. The contract price of the work done to that stage was $2 million, but its market value was only $1.7 million. The county argued that because the builder materially breached, the builder was entitled only to $1.7 million for the work done. The builder countered that the contract’s specification of the price for each unit of work made the contract divisible. Therefore, the builder claimed that because it fully and properly performed the contract units up to the time of breach, it was entitled to the full $2 million.Is the builder correct that it should receive the full $2 million for the work performed?76If a buyer breaches a contract for the sale of goods and the seller withholds the delivery of goods due to the buyer’s breach, is the buyer entitle...
If a buyer breaches a contract for the sale of goods and the seller withholds the delivery of goods due to the buyer’s breach, is the buyer entitled to restitution of amounts paid under the contract prior to the breach?77For a breach-of-contract claim, the formula for calculating expectation damages is:________ + ________ − ________ = expectation damages.
For a breach-of-contract claim, the formula for calculating expectation damages is:________ + ________ − ________ = expectation damages.78For a breach-of-contract claim, what are incidental damages?
For a breach-of-contract claim, what are incidental damages?79For a breach-of-contract claim, what are consequential damages?
For a breach-of-contract claim, what are consequential damages?80For a breach-of-contract claim, may the injured party recover damages for losses that actually occurred but that could have been avoided with reaso...
For a breach-of-contract claim, may the injured party recover damages for losses that actually occurred but that could have been avoided with reasonable efforts?