This is an extract of our Contract And Off Contract Remedies document, which we sell as part of our Contracts Outlines collection written by the top tier of University Of Michigan Law School students.
The following is a more accessble plain text extract of the PDF sample above, taken from our Contracts Outlines. Due to the challenges of extracting text from PDFs, it will have odd formatting:
CONTRACT REMEDIES a. Expectancy i. Calculating Expectancy
Expectancy is the principle of putting P in the position he would have occupied absent the breach. It is the meta-principle of contract remedies.?
Objective Expectancy: This means giving P the fair market value of what he would have had but for the breach. o Rest. SS 348 (2): For defective or unfinished construction, P may recover
? (1) The cost of mitigation, if it is feasible doesn't require unreasonable waste; or
? (2) The difference in value of the property as it is and as it would have been absent the breach. (Groves v. John Wunder Co.) Subjective Expectancy: Where P's expectancy interest exceeded the market rate, we may award this instead. (Landis v. Fannin Builders: where D got the color of P's dream house wrong, P may recover the cost of new stained siding rather than the cost of painting the existing siding). ii. Market Differential & Substitution
A party may collect the difference between the contract price and the price of obtaining a substitute contract when the other party breaches. (See: MITIGATION)??P recovers the difference between the contract price and the market price at the time P learns of the breach. If the difference in price is in P's favor, then the contract was a "dog" and P's expectation interest is negative (zero). (Acme Mills v. Johnson) UCC SS 2-712: (See: MITIGATION) (c.f. Missouri Furnace v. Cochran) UCC SS 2-713: (See: MITIGATION) UCC SSSS 2-602 et seq.: Buyer's remedies. UCC SSSS 2-703 et seq.: Seller's remedies. iii. Lost Profits & Consequential Damages
A party may collect lost profits resulting from the breach, within limits.?
UCC SS 2-708: Expectancy is the full contract price if the party is a "volume seller;" i.e., we can assume that the substitution contract would have happened regardless of the buyer's breach. (Neri v. Retail Marine Corp: seller of a custom boat who sold the boat at the contract price shortly after buyer's breach could still collect full contract price). Reasonable Certainty Principle: A party seeking to collect lost profits may only collect those profits which were "reasonably certain" to materialize. (See: Chicago Coliseum Club v. Dempsey, MindGames v. Western Publishing). b. Reliance i. General
Reliance damages are costs incurred in fulfillment of the contract. Reliance damages are meant to restore P to the status quo ante.?
Rest. SS 349: Expectancy Caps Reliance. Where P's contract was a "dog" and P's expectancy is negative, P may recover reliance damages but only up to the point of expectancy. The burden of showing P's losses falls on D. (L. Albert & Sons v. Armstrong Rubber). Reliance damages may be sought as an alternative theory where expectancy is hard to quantify.
Buy the full version of these notes or essay plans and more in our Contracts Outlines.