I.Parties Are Entitled to Basic Whole Value Recovery

I.Remedies

a.Bedrock Foundations

i.Parties are entitled to basic whole value recovery

ii.Parties elect their remedy

1.HWVR, options are limited by law

iii.It is not standard for winner to recover att’y fees or time invested in litigating case

1.System tries to deal with this in other ways BUT undercuts whole value recovery

b.Historical Classifications of Remedies: Common Law v. Equity

i.To get into Common Lawparty needed: damages + jury trial

1.(1) wri de curso

a.“form of action” + payment to chancellor

1. Replevin, trespass, debt, detinue,

2.(2) Extraordinary Writs at Common Law

a.First

1. Petitioned the Common Law Court itself, not through Chancellor
2. Used to regulate institutions inferior to Common Law courts and subject to supervisory review powers of C/L courts

b.The Four Extraordinary Writs

1. (1) habeas corpus
2. order directed at some one in custody of some one else’s body to come to court to explain the custody, and legality of custody
3. child custody, police custody
4. (2) mandamus
5. order from common law to some one within court’s supervisory authority to do something (mandate) which they have a ministerial duty to do (legal duty)
6. goes to judge without a jury
7. i.e. – clerk not accepting papers
8. this can be used creatively
9. (3) prohibition
10. flipside of mandamus: order from common law court to some one within the court’s supervisory wuthority to stop doing something which is within their ministerial duty not to do.
11. Goes to judge without jury
12. (4) certiorari

c.Bottom line:

1. These are exceptions to the rule that in CL courts claimant has a right to jury trial

ii.Equity

1.Often considered a place to go when no adequate remedy at C/L

a.Injunctions, specific performance, etc.

iii.Mixed Suits

1.Claim = specific performance/injunction and in alternative, or additionally, money damages

a.Is claim is primarily injunctive relief/specific performance then Chancery

b.If you later drop the equitable relief portion claim must stay in Chancery court

2.Remember: if prohibition or mandamus then can go either court but no jury trial in either

c.Important Pleading Points

i.General & Special Damages

1.Special damages need to be specifically pleaded in complaint

ii.Tort v BoK

1.There is often the option to bringing action under either (except personal injury or wrongful death)

2.Insurance – always think about availability of insurance

a.Often if claiming a tort then general liability insurance will kick in

b.BoK losses are generally non-insurable

c.BUT in tort there is shorter SOL & difficulties of expert testimony

II.Federal Torts Claim Act (FTCA)

a.United States cannot be sued except to extent they allow themselves to be sued

i.§1346(b)(1): for injury or loss of property, or personal injury or death caused by negligent or wrongful act or omission of any employee of Gov’t while acting within scope of his/her office, under which the US, if a private person, would be liable to the claimant in accordance with the law of the place where the act or omission occurred”

1.claim determined by law of place where act or omission occurred

b.2 important rules:

i.(1) no punitive damages against US gov’t even if private person would be liable for punitive damages

ii.(2) no jury trial

c.FTCA is a technical statute – look up law

III.Compensatory Damages

a.General rules

i.(1) Compensatory damages are designed to put party in position they would have occupied had they not been wronged

1.Aka, in their rightful position

2.Measured by fair market value, often the replacement cost, plus other losses

a.Loss of use, rental, consequentials

3.An objective value – no personal, idiosyncratic values but possibly peculiar history value

ii.(2) MUST put on evidence to prove damages

iii.(3) One Satisfaction Rule: the value of damages is both what a party is entitled to and a limit on what they may recover

iv.(4) the law is cheap

1.if different ways to calculate value then must go with cheapest calculation

b.Determining Value

i.Objective, fair market value

1.Though individual sentiments will not be valued, particular aspects of property can be valued

a.For example – the pink Cadillac of Elvis

2.Replacement cost is competent evidence to prove FMV

ii.HWVR, may get the “lemon effect”

1.Property for sale used for valuing FMV may not be exact replacement – used

2.Value is not being based on property not being sold, only on that property being sold in market

a.Party can get experts to testify about property not being sold to refute FMV

iii.Special purposes property

1.Not generally an active market or substitute to get FMV so no limit on recovery

a.Trinity Church case

iv.Emotional distress

1.To value look to individualized harm and then compare to other jury awards

c.Time of valuation

i.General rule

1.Damages are computed at time of loss regardless of ’s normal practices

2.Crops: damages are computed at time of harvest, when a market value first exists

ii.Volatile Market Valuation

1.When looking to fluctuating market 3 rules:

a.(1) traditional rule: time of loss

b.(2) Highest value b/w time of loss and time of trial, time of filing suit, or other similar date

c.(3) Federal/NY rule: highest value b/w time learned of loss & rsbl time thereafter in which property could have been replaced

iii.Value of time & labor (plating, construction)

1.General Rule:

a.Must take into account that resale value normally includes cost

b.Remember – to put party in position would have been despite destruction

iv.Work in progress

1.Damages (these numbers must be equal) are either:

a.Costs already expended plus profit OR

b.finished value (FMV) less cost of completion

c.NOTE: if these numbers do not add up then must keep working

d.Sale of Goods: Reliance & Expectation as Measures of the Rightful Positions

i.First thoughts

1.Remember: for breach of K party is entitled to benefit of bargain

a.Difference b/w contract price and FMV replacement

b.Differnece b/w value of goods promised and goods delivered

ii.Seller’s Damages in Breach of K for Sale of Goods

1.§ 2-703: Seller’s Remedies in General

a.(d) resell and recover damages as provided in 2-706

b.(e) recover damages for non-acceptance provided in 2-708

2.§ 2-706: Resale and Recover

a.the seller may resell goods or undelivered balance thereof

b.where resale made in good-faith and in Commercially rsbl manner the seller may recover the difference b/w the resale price & the K price PLUS any incidental damages allowed under 2-710 LESS expenses saved b/c buyer’s breach

3.§ 2-708(1): Seller’s damages for Non-Acceptance or Repudiation

a.The measure of damages for non-acceptance or repudiation by the buyer is the difference b/w the market price (retail value) at time and place of tender & the unpaid K price together with nay incidental damages provided in 2-710 but less expenses saved in consequence of the buyer’s breach

1. Unpaid K price – market price (@ time and place of tender) = benefit or bargain
2. PLUS incidentals (storage, etc.)

4.§ 2-708(2): Lost volume seller (when the difference is zero)

a.Profit (including rsbl overhead) which the seller would have made from full performance by buyer, together with any incidentals provided by 2-710,

5.§ 2-710: Seller’s Incidental Damages

a.Incidental damages to an aggrieved seller includes any commercially rsbl charges, expenses or commissions incurred in:

1. stopping delivery
2. transportation, care, and custody of goods after breach
3. connection w/ return or resale of the goods
4. or otherwise resulting from breach

iii. Deposits on Goods by Buyer

1.UCC § 2-718: Liquidation or limitation of damages; deposits

a.(A) Damages for breach by either party may be liquidated in the agreement

1. BUT only to amount rsbl w/r to:
2. (1) anticipated or actual harm caused by breach
3. (2) the difficulties of proof of loss
4. (3) the inconvenience or non-feasibility of otherwise obtaining an adequate remedy
5. A term fixing unrsbly large liquidated damages is void as a penalty

b.(B) where seller justifiably withholds delivery of goods due to buyers breach, the buyer is entitled to restitution of any amount by which the sum of his payments exceeds:

1. (1) amount to which seller is entitled per liquidated damage clause
2. (2) in absence of liquidated damage clause, 20% of the value of the total performance buyer was obligated to per K or $500 – whichever is smaller

iv.Buyer’s Damages

1.§ 2-711: Buyer’s Remedies in general

a.(d) cover and have damages under 2-712

b.(e) recover damages for non-delivery or repudiation under 2-713

c.specific performance under 2-716

d.(b) deduct damages from any part of the price still due under 2-717

2.§ 2-712: Cover

a.the buyer may cover by making good faith & w/o unrsbl delay any rsbl purchase of or K to purchase subsitute goods

b.buyer may recover difference b/w cost of cover and the K price PLUS incidental or consequentials per 2-715 LESS costs saved b/c seller’s breach

3.§ 2-713: Buyer’s damages for non-delivery or repudiation

a.damages for failure to deliver or rightful rejection is difference b/w the market price @ time and place of tender under K and K price PLUS any incidentals or consequentials LESS costs saved b/c breach

b.damages for repudiation is difference b/w market price at expiration of a commercially rsbl time after buyer learns of repudiation – but no later than time and place of tender under K – and the K price PLUS incidentals or consequentials LESS costs saved b/c breach

4.§ 2-716: Specific Performance

a.specific performance may b e decreed if the goods are unique or in other proper circumstances.

b.May not be decreed if sole remaining contractual obligation is payment

5.§ 2-715: Buyer’s incidentals and consequentials

a.incidentals include expenses rsbl incurred in:

1. inspection, receipt, transportation and care and custody of goods rightfully rejected
2. any commercially rsbl charges, expenses, commissions in connection w/ effecting cover
3. any other rsbl expense incident to the delay or other breach

b.consequentials include:

1. any loss resulting from general or particular requirements and needs of which seller at time of contracting had reasons to know & which could not have rsbly been prevented by cover or otherwise
2. OR injury to person or property proximately resulting from any breach of warranty

e.Fraud

i.Traditionally in tort for fraud,  entitled to recover loss but not expected benefit of bargain

ii.Exceptions

1.§ 2-712: Remedies for Fraud

a.remedies for material misrepresentation or fraud include all remedies available under this article for non-fraudulent breach.

2.MS (and other state) RULE

a.Allow  to choose b/w the “out-of-pocket” measure ( or the “benefit of bargain” measure whether sue in fraud or K

b.This is not rule in all states

3.R 2d Torts - § 549

a.Victim of fraud may always recover “reliance” damages

1. (1) difference b/w what party paid and value of what was received (BoB)
2. (2) incidental reliance expenses

iii.Remember: In these situations there can be a point when the expectations are not rsbl

1.Trolling for fraud

IV.Consequentials

a.Generally

i.Special Damages Rule: special/consequential damages are such damages and extra expense that are the natural and proximate result of the breach

1.Hoff: Probable and reasonable

ii.Vocabulary

1.General damages: value of what  lost from initial impact of ’s wrongdoing

2.Consequential/special damages: everything that happens to  as consequence of this initial loss

iii.Pleading of Special Damages

1.Federal & state rules require pleading of special damages

a.Includes consequentials & medical expenses, NOT pain & suffering

iv.UCC Rules

1.Seller’s incidentals: § 2-710

a.(1) incidental damages to seller may include any commercially rsbl charges, expenses or commission incurred in:

1. stopping delivery
2. the transportation, care, and custody of goods after the buyer’s breach
3. connection with return or resale of the goods, or
4. otherwise resulting from breach

b.(2) consequential damages include any loss resulting from general or particular requirements and needs of which the buyer at the time of contracting had reason to know & which could not have rsbly be prevented by resale or otherwise

2.Buyer’s Incidentals and Consequentials: § 2-715

a.(1) Incidentals include

1. expenses rsbl incurred in inspection, receipt, transportation and care and custody of goods rightfully rejected
2. any commercially rsbl charges, expenses, commissions in connection w/ effecting cover AND
3. any other rsbl expense incident to the delay or other breach

b.(2) consequentials damages include

1. any loss resulting from general or particular requirements and needs of which seller at time of contracting had reason to know and wich could not have rsbly been prevented by cover or otherwise; and
2. injury to person or property proximately resulting from any breach of warranty

v.Failure to Pay Exception

1.For failure to pay amount of money owed, you do not get consequentials

a.HWVR, law does provide for interest in delay of payment

2.There is some erosion to this rule

a.(1) where causation is clear and the amount is certain

1. usually actual interest paid or failed to earn instead of legal rate

b.(2) § 4A-404(a): when banks fail to execute order to transfer funds

1. MUST: bank receives funds; reufses to pay to beneficiary after they make demand for funds and gives notice of consequentials; bank fails to prove its refusal was based on rsbl doubt of beneficiary’s rights to funds.

c.(3) Majority will allow consequentials for BoK to loan money where damages are sufficiently foreseeable

d.(4) suits against insurers for bad faith to settle when refuses or delays in bad faith knowing it is liable

vi.Limiting Consequentials

1.General Rules

a.K exclusion of consequentials is proper if not unconscionable and explicit

b.UCC allows parties to explicitly exclude consequentials unless unconscionable

1. § 2-719(3): consequential damages may be limited or excluded unless the limitation or exclusion is unconscionable
2. limitation of consequentials for injury to consumer w/r to consumer goods is prima facie unconscionable
3. limitation of damages where loss is commercial is not

2.When no remedy would be available exclusion will be excluded as unconscionable

a.If other remedies are limited resulting in the voiding of their essential purpose then the exclusion may be rejected (split)

b.Remember: look to all remedies, they may provide a way out of rejection

1. Minimum adequate = minimum quantum

V.Limiting Compensatory Damages

a.Liquidated Damages:

i.General Rules

1.R2d K 356(1): damages for breach by either party may be liquidated in the agreement but only at an amount that is rsbl in light of :

a.the anticipated or actual loss caused by the breach and

b.the difficulties of proof of loss.

c.(2) A term fixing unrsbly large liquidated damages is unenforceable on ground of public policy as a penalty

2.§ 2-718: Liquidation or Limitation of Damages

a.damages for breach by either party may be liquidated in the agreement but only at an amount which is rsbl in light of:

1. the anticipated or actual harm caused by the breach,
2. the difficulties of proof of loss, and
3. the inconvenience or nonfeasibility of otherwise obtaining an adequate remedy.

3.Remember: be explicit in contracts that liquidated damages is the sole remedy

b.Limiting the Remedy in Contract for Goods

i.§ 2-719: Contractual Modification or limitation of Remedy

1.Subject to subsections 2 & 3,

a.(a) the agreement may provide for remedies in addition to or in substitution for those provided in this Article and may limit or alter the measure of damages recoverable, as by limiting the buyer’s remedies to return the goods and the repayment of price or to repair and replacement of non-conforming goods or parts; and

b.(b) resort to a remedy as provided is optional unless the remedy is expressly agreed to be exclusive, in which case it is the sole remedy.

2.Where circumstances cause an exclusive or limited remedy to fail of its essential purpose, remedy may be had as provided by this act

3.Consequential damages may be limited or excluded unless the limitation or exclusion is unconscionable.

ii.RULE: 2-719 does NOT apply to liquidated damages, 2-718 applies

c.Avoidable Consequences

i.Generally

1.RULE:  is not liable for avoidable consequences of his/her wrongdoing

a.Technically party do not have to mitigate loss, but party cannot recover for those damages that have been avoided.

2.RULE:  must take rsbl steps to mitigate; no need to take unrsbl steps

a.Uncertainty goes against 

3.RULE: avoidable consequences is treated as an affirmative defense, with BoP on 

ii.Special Rules

1.Employment discharge cases

a.Claimant must use rsbl diligence in finding suitable employment

b.Need not go into another line of work, accept a demotion, geographical scope

c.BUT must take job substantially equivalent

2.Corrective Surgery

a.Court will decide if benefits outweigh risks and discomforts

b.Is it unrsble to particular  if w/n reason court will side w/  (eggshell rule)

3.Impossibility of Mitigation

a.The financial inability of a  to mitigate will not bar those damages but will not allow damages to accumulate indefinitely

4.Illegitimate Demands

a. need not avoid loss by submitting to ’s illegitimate demands

5.Refusal to Settle

a. is not required to surrender his claim in exchange for ’s offer to mitigate damages; refusal to settle is not failure to mitigate

6.Lease Exception

a.Old C/l rule – a lease is a done deal, there is no need for leasor to find another lease

b.NOW a strong trend against it

d.Offsetting Benefits

i.Offsetting Benefits Doctrine

1.The principle of restoring  to his rightful position requires that offsetting benefits be taken into account

ii.Collateral Source Rule Exception

1.If an injured party receives some compensation for his injuries from a source wholly independent of the tortfeasor, such payment should not be deducted from the damages which the  would otherwise collect from the tortfeasor.

a.Subcontractor in a contractual setting is not a wholly independent source

2.Subrogation Claim

a.Insurance can separately prosecute the tortfeasor; can join but not necessary

e.Certainty Requirement

i.General Rule

1.Though a jury may not render a verdict based on speculative guesswork, the jury may make a just and reasonable estimate of the damage based on relevant data

a.Juries are allowed to act upon probable and inferential, as well as direct and positive proof – “just and rsbl inference”

b.The  bears the risk of uncertainty

ii.Most common: lost profits

1.Usually comparisons of profit before and after the wrong or comparisons to similar businesses

iii.New Businesses

1.Old rule: new business cannot recover lost profits

2.New rule: treat risks of new business as an element of proof

f.Tort Reform

i.Limits in Mississippi\

a.No cap on economic damages (calculable)

1. Try to define things as economic to avoid the cap

b.Cap for non-economics

1. in most cases is 1 million, in medmal 500k

c.Cap on Punitives

d.

g.INSERT THINGS – missed class here