BLAW: Contracts continued
BLAW: Contracts continued BLAW 3080
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This 1 page Class Notes was uploaded by Madison Morman on Sunday March 6, 2016. The Class Notes belongs to BLAW 3080 at University of Cincinnati taught by Peter Burrell in Summer 2015. Since its upload, it has received 28 views. For similar materials see Legal Environment of Business in Business Law at University of Cincinnati.
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Date Created: 03/06/16
Consequential Damages Consequential (Special) Damages: In addition to standard damages, a party can collect reasonably foreseeable damages as a result of the breach -‐Breaching party should be aware that if they don’t perform, it would cause injured party additional loss Hadley v. Baxendale case: Hadley owned a mill that went down because of a break in the crankshaft so Hadley wanted to transport the broken shaft to the manufacturer so the could make him a new one. -‐He knew if the machine doesn’t work, the manufacturer would be subjected to special damages. Hadley v. Baxendale rule • Innocent party may recover damages arising naturally from the breach • Innocent party may recover special/consequential damages IF they were foreseeable • Court said that a party injured by a breach of contract can recover only those damages that should reasonably be considered • OR might reasonably be supposed to have been in the contemplation of both parties, at the time they made the contract, as a result of the breach. Liquidated Damages: Damages Agreed in the contract • Enforceable IF amount is: Reasonable in relation to the actual harm done o OR is NOT a penalty Damages for Breach of Contract: Court asks 2 questions 1. When contract was entered into, was it apparent damages would be difficult of estimate in event of a breach? 2. Was the amount set as damages a reasonable estimate and not excessive? Punitive Damages • Not available for breach of contract • Available for fraud – tort cause of action – or bad faith breach of insurance contract • Fraud: Has to be a false statement of fact, NOT expressing an opinion Equitable Remedies • Specific Performance: Used with land or unique items o Court orders breaching party to perform or face contempt charges o Available if interests land or unique personal property o Can’t be used for Personal Service contracts (involuntary servitude) • Rescission: Remedy where a contract is canceled & parties are restored back o Available for fraud and other material contract breaches