Exam 18: Contract Remedies

According to the "American Rule," when contracting parties litigate over a breach:

Restitution requires a return of value to the aggrieved party.

Misrepresentation that induces a party to enter into a contract may give rise to remedies under:

If Wallace and Bruce designated in their contract an amount to be paid in the event of a breach and the amount is found to be so high it is considered a penalty, the injured party will be left without a remedy.

Damages for reliance include expenses for:

The purpose of reliance damages is to place the injured party in a position as good as he would have held if the contract had not been made.

Contract damages that put the injured party in as good a position as if the other party had performed are:

Where a contract is unenforceable because of the statute of frauds, a party may recover the benefits conferred on the other party in reliance on the contract.

Joann, an antique dealer, intentionally misrepresents the value of an antique bed, as $7,000 when she has reason to know the value is actually $3,500. Connie agrees to buy it for $6,500. In a state that uses the "out-of-pocket" rule, Connie's damage award would be:

A liquidated damage clause that represents a reasonable approximation of the damages where the actual amount would be very difficult to determine will usually be upheld.

Explain three limitations on monetary damages.

Incidental damages include lost profits and injury to person or property resulting from defective performance.

A plaintiff who has not sustained any loss resulting from the defendant's breach of contract cannot recover any damages.

Consequential damages include lost profits and injury to person or property.

A contractor and Southampton, Inc. have a contract, which calls for the contractor to build a building with the completion by June 15. If the building is not completed by that date, the contract calls for the contractor to pay $100 per day in damages. The $100 per day is:

The remedy for misrepresentation is specific performance of the contract.

Which of the following is correct with respect to election of remedies?

Restitution can be obtained where a voidable contract is avoided.

Where a party has been induced by fraud to enter a contract, the Restatement of Torts permits the injured party to recover out-of-pocket damages but expressly excludes recovery of benefit-of-the-bargain damages.

To fully compensate a plaintiff for losses suffered for a breach of contract, punitive damages are always awarded.