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Mitigation,Breach,Expectation,Damages,LectureNotes,Torts,8873, Lecture notes of Contract Law

Mitigation, Breach, Expectation Measures, Damages

Typology: Lecture notes

2011/2012

Uploaded on 11/14/2012

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Download Mitigation,Breach,Expectation,Damages,LectureNotes,Torts,8873 and more Lecture notes Contract Law in PDF only on Docsity! Elements, Damages, and plan C • Express contract • Implied-in-fact contract • Implied-in-law contract Nursing Care Services, Inc v. Dobos pg 504 • Three phases o 2 weeks of in-hospital care-coma-could not accept. § Emergency aid exception o 48 hour post-release care- express contract –6 elements o 2 weeks of at-home care quasi-contract § services-benefit § knowing and voluntary acceptance § unjust to retain w/o paying • Do not like officious intermeddle doctrine o Person performs labor for another w/o the latter’s request or implied consent, however beneficial such labor may be, he cannot recover therefore. Ways to form an obligation • Expressed or implied-in-fact contract- bargain and asent • Promissory estoppel- not a real contract but contract like obligations • Quasi or implied-in-law contract unjust enrichment • Basis for enforcement • 3 Elements for quasi o Service-benefit o Knowing and voluntary acceptance o Unjust to retain w/o paying • Damages o expectation damages- based on contract o reliance damages –lost opportunity cost, and out of pocket o restitution damages- value of benefit to DF • implied-in-fact damages? o Market value of services=quantum meruit Capacity is irrelevant in quasi contracts Day v. Caton pg 511 Facts: • Had two lots 27 and 29. The PL built a way on the property line between the two. PL thought the DF would be able to use the wall on his part of the property for a house o Could use as a benefit • PL stated there was an express contract-Df disputed so it didn’t work • This was an implied-in-fact contract- normal contract elements o Offer o Acceptance o Etc • Silence gives consent • Even though it was not decides as a implied-in-law contract it could have been. Bastian v. Gafford pg 514 Facts: • Discussions about designs to build on land. Rule: • For a quasi-contract: o Need to prove unjust enrichment and benefit conferred to receive damages o Restitution damages are the proper remedy • For an implied-in-fact contract: o Unjust Enrichment is irrelevant o Real contract-- expectation damages are the proper remedy. PL: said real contract was formed TC: no recovery b/c no benefit for DF Damages Hawkins v. McGee pg 190 Facts: • A surgeon guaranteed that the plaintiffs hand operation would be 100 percent successful. The plaintiff sued for breach of warranty when the operation was not successful. Rule: • The measure of damages in a breach of contract case is the difference between the plaintiffs actual position and the position he would have been in had the contract not been breached. 2 parts • Was a contract formed? Everyone is happy in this. Punitive Damages pg 215 • Only punish • There are tort damages • Could get this if you are doing something that can be a tort as well as a breach of a contract • Categorical approach o Denial of insurance claim § If a little old lady as insurance claim for hail damage and hail does damage her house and the insurance company threatens her then that is the tort part of it. o Employment o Other contexts Chapter 6: Expectation Measure pg 217 Cost of completion v. diminution in value For Test: Could describe the course in 2 words • Formation o Consideration § Bargain § Exchange § Modern def of consideration § What consideration is § What consideration is not ú Nominal ú Unconsibility ú Duress o Offer o Acceptance • Damages o Expectancy o Reliance o Restitution Louise Caroline Nursing Home INC v. Dix Construction Co. pg 218 Damages: value as promised –value as delivered PL wants cost of completing/ cost of repair Abandonment context • Damages- cost of completion= default measure especially where cost of completion but $$ already paid is less then or equal to contract price 2 types of context • where the project is abandon- like this case • where there is a defect Cost of Repair- Defective performance cases Peevyhouse v. Garland Coal & Mining Co. pg 220 Facts: • Plaintiffs leased their farm to Defendant, a mining company for five years. Defendant performed strip mining. The contract included a provision where Defendant would do remedial work to fill in the holes caused by Defendant’s mining after the mining was complete. This work involved moving substantial amounts of dirt. Defendants did not do the remedial work. The trial court established that the remedial work would cost more than $29,000.00 and that the value of the farm would increase by $300.00. The court awarded Plaintiffs $5,000.00 • DF- Diminution in value $300 • PL- Cost of Repair $25K • Default rule is cost of completion • Alternative: cost of completion disproportionality (undue expense out of proportion, relative economic benefit to PL) if so damages measure = Diminution in value • Economic waste and overcompensation/adequate compensation • Focus on o Main purpose vs. o Incidental Court states: • It was merely to accomplish the economical recovery and marketing of coal from the premises to the profit of all parties. The special provisions of the lease contract pertaining to remedial work were incidental to the main object involved. If it was only an economic interest only then it would be based on market value Valued measured as • Objectively vs. • Subjectively Dissent: • Bad faith breach • Get what bargained for o Df had knowledge it would be disproportionate Bargains are made up of • Benefits • Burdens If the coal company does not have to remediate the land then most of the burden would be taken from the DF and most of the benefits would be taken from the PL Schneberger v. Apache pg 228 • DF polluted the Schneberger property so they sued and made a contract to fix it. The DF breached their contract by failing to achieve the reduced level of water • Cost of repair $1,300,000 • Diminution of value $5,000 When you have the cost of repair and value that are disproportionate then the cost of repair will crush the value unless something else is added to value H.P. Droher & Sons v. Houshin pg 231 • COR(cost of repair)= $20,000 • DIV(diminution in value)= $2,000 • This case talks about market value and economic waste Eastern Steamship Lines INC v. US pg 231 • COR= $4,000,000 • DIV= $ 2,000,000 Rational actor theory Advanced, INC v. Wilks pg 234 • An owners recovery is not necessarily limited to diminution in value whenever that figure is less than the cost of repair. • Esthetics are added to the denominator of the equation City of Elmira v. McLane Construction pg 232 • Where the contractor’s performance has been incomplete or defective, the usual measure of damages is the reasonable cost of replacement or completion Fox v. Webb pg 233 • asthetics • Seller should have mitigated the damages by selling the pool tables • Duty to mitigate damages by acting in a commercially reasonable manner In Re Kellett AirCraft Corp pg 269 Facts: • Could have contracted with Cutler ($18) or Luscombe ($13.18) • While it seems like by going to cutler he failed to mitigate damages by going with the higher price but Cutler could get it done sooner and had worked on them before. • Have to look at other facts before deciding if he mitigated damages or failed to do it. • Act in a commercially reasonable manner o Have 2 reasonable choices at time of breach § Limitation on limitation When PL and DF both have to same amount of duty to mitigate cost Shirley MacLaine Parker v. Twentieth Century-Fox Film Corp. p 272 Facts: • Had contract to be an actress in Bloomer Girl for $750K • 20th century decided not to do Bloomer Girl but offered role in Big Country • She didn’t accept the offer • DF said she didn’t try to mitigate damages • The job offered was inferior but they say it was substantially similar • Studio o Female lead o Film-vehicle for publicity, economic benefit o Salary o Almost same terms- only omitted 29, 31 and 32 § Could drop 31 because it is about dancing § So 32/34 is fine. Only two differences § These are different but.. ú No time ú Consultation ú Interest • MacLaine o Yes but…. o Musical v. western § Western is suited to talents § Location o Yes o Differ in important ways § It went with bargain of the contract One side takes an abstract view the other takes a concrete view Southern Keswick, inc v. whetherholt pg 276 • Earings with be used to mitigate damages because if you are working and you get the $$ for lost wages then you will be better off then if the contract was performed. Hadley v. Braxendale pg 279 Facts: • Plaintiffs, who run a mill, needed a new crank shaft because the old one was broken. They hired Defendant to deliver the old crank shaft to Greenwich to be used as a pattern for a new crank shaft. Defendant did not deliver the crank shaft in a timely fashion and, thus, Plaintiff’s mill could not operate and lost money. • Lost profits b/c of delay • DF said that Damages are “too remote” • Too remove/unforeseeable v. immediate/ foreseeable • Two prong Hadley v. Braxendale test o Foreseeability of loss § General circumstances: naturally arising (constructive) ú Not applicable § Special circumstances: specially known (actual) ú Not done Shift from compensation to allocation of loss • There will be some losses that the PL must bear o Losses that are not foreseeable What was in the contemplation of the parties at the time of the contracting • If in contemplation then DF should be liable • If not in contemplation then PL should be liable Two kinds of causation • “But for” test o Actual causation o Connecting the dots • Proximate causation o Foreseeability § Then you go to the 2 pong test above What damages do you get • The core- what the contract was for- loss of wages • Then loss reputation • Opportunity to practice profession  
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