Damages would be adequate to protect the expectation interest of the injured party (RST §359) Adequate damages for part of the breach preclude SP on the doesn’t contract as a whole Would lead to additional transaction costs/waste, induce poor performance Contract is for services (difficult to gauge the performance) CASES: P ordered a limited edition car from D, D Sedmak v. Charlie’s Chevrolet: breached Search for used jet, P contracted with D who breached, 3 others Klien v. Pepsico: available Damages - EXPECTATION & RELIANCE DAMAGES Expectation Damages: Put the promisee in the same position had the contract been performed RST §347: Loss in the value of the other performance + any other cost party’s (incidental or consequential) any cost avoided by not having to perform – Incidental loss = costs incurred in a reasonable effort to avoid loss Consequential loss = injury to person/property because of defective performance Cost of completion: Pay the amount the have the performance rendered PURPOSE was to have the performance fulfilled (American Standard) Assume the land is meant for personal use OR the original cost was priced into the contract (American Standard) Strongly signal that they care about the clause Diminution of value: Difference of the value of the land as improved vs. unimproved PURPOSE was to have the land be at a certain value (Peevyhouse) Assume the land was supposed to be resold [Peevyhouse is wrong] The clause that was not performed is incidental to the contract Take into account: (Freund) Expectation interest = same position party been in had there would’ve been performance Reliance interests = anything the party does in reliance on the fact the contract was made Restitution interests = return anything that was given in consideration Reliance Damages: Expenditures made in performance (or in preparation) any loss the RST §349: – breaching party can prove that the injured party suffered has the would’ve contract been performed
Damages would be adequate to protect the expectation interest of the injured party (RST §359) Adequate damages for part of the breach doesn’t preclude SP on the contract as a whole Would lead to additional transaction costs/waste, induce poor performance Contract is for services (difficult to gauge the performance) CASES: Sedmak v. Charlie’s Chevrolet: P ordered a limited edition car from D, D breached Klien v. Pepsico: Search for used jet, P contracted with D who breached, 3 others available Damages - EXPECTATION & RELIANCE DAMAGES Expectation Damages: Put the promisee in the same position had the contract been performed RST §347: Loss in the value of the other party’s performance + any other cost (incidental or consequential) – any cost avoided by not having to perform Incidental loss = costs incurred in a reasonable effort to avoid loss Consequential loss = injury to person/property because of defective performance Cost of completion: Pay the amount the have the performance rendered PURPOSE was to have the performance fulfilled (American Standard) Assume the land is meant for personal use OR the original cost was priced into the contract (American Standard) Strongly signal that they care about the clause Diminution of value: Difference of the value of the land as improved vs. unimproved PURPOSE was to have the land be at a certain value (Peevyhouse) Assume the land was supposed to be resold [Peevyhouse is wrong] The clause that was not performed is incidental to the contract Take into account: (Freund) Expectation interest = same position party would’ve been in had there been performance Reliance interests = anything the party does in reliance on the fact the contract was made Restitution interests = return anything that was given in consideration Reliance Damages: RST §349: Expenditures made in performance (or in preparation) – any loss the breaching party can prove that the injured party would’ve suffered has the contract been performed
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