Introduction – Chapter 1 (p. 2) and Chapter 2 (p. 13)

RELIANCE INTEREST

1. PREVENTS THE PLAINTIFF’S LOSS (alternative to expectation)

   1. GIVES THE PLAINTIFF REIMBURSEMENT FOR LOSSES SUFFERED IN RELIANCE ON THE CONTRACT

   2. MUST BE “ESSENTIAL” TO THE BREACHED CONTRACT

   3. DEFENDANT GIVEN CREDIT FOR ANY BENEFIT CONFERRED ON THE PLAINTIFF

1. RESTITUTIONARY INTEREST

1. PREVENTS DEFENDANT’S GAIN (not a quasi-K)

   1. RECOVERABLE WHEN THE EXPECTATION INTEREST DIFFICULT TO PROVE

   2. MEASURED BY THE VALUE OF THE PLAINTIFF’S PERFORMANCE TO THE DEFENDANT

2. GENERAL VS. SPECIAL DAMAGES

1. GENERAL:

1. FLOW NATURALLY FROM THE BREACH

   1. THEY OCCUR WITHOUT REFERENCE TO THE SPECIAL CONDITIONS OF THE PLAINTIFF

1. SPECIAL (CONSEQUENTIAL)

1. THEY DO NOT NECESSARILY ALWAYS RESULT FROM THE DEFENDANT’S ACT, BUT DO IN THIS SITUATION

   1. THEY ARE DETERMINED WITH REFERENCE TO THE SPECIAL CONDITIONS OF PLAINTIFF.

3. ILLUSTRATIVE CASES

1. EXPECTANCY INTEREST: EASTLAKE CONSTRUCTION V. HESS

1. Breach of K case. GC built 5 condo units, but didn’t finish and some work didn’t conform to plans. Get damages:

   1. Lost rental value

   2. Cost of repair vs. dimunition in value. Cabinets were awarded dimunition in value to avoid economic waste (cost of repairs should not be awarded if that cost is clearly disproportionate to the value to the injured party of those repairs.

   3. Cost of completing performance.

2. RELIANCE INTEREST: GRUBER V. S-M NEWS COMPANY

3. RESTITUTIONARY INTEREST: CAMPBELL V. TVA

4. THE PORTRAIT CONTRACT

4. SALE OF GOODS CONTRACTS - BUYER’S REMEDIES FOR SELLER’S BREACH

1. UCC SECTIONS:

1. 2-711: BUYER’S REMEDIES IN GENERAL

1. CUMULATIVE REMEDIES

1. CAN COVER (§ 2-712)

   1. CANCEL AND RECOVER THE PRICE PAID (§ 2-713)

   2. RECOVER DAMAGES FOR NON-DELIVERY (§ 2-713)

   3. INCIDENTAL/CONSEQUENTIAL DAMAGES (§ 2-715)

   4. SPECIFIC PERFORMANCE (§ 2-716)

   5. Liquidated Damages (§ 2-718)

   6. Accepted Good: breach of warranty claim (§ 2-714)

1. 2-712: BUYER’S RIGHT TO COVER

1. MUST BE IN GOOD FAITH

   1. WITHOUT UNREASONABLE DELAY

   2. MAY RECOVER = (COST OF COVER – K PRICE) + INCIDENTAL + CONSQUENTIAL DAMAGES – EXPENSES SAVED.

1. 2-713: DAMAGES FOR NON-DELIVERY/REPUDIATION (see CA version)

1. NON-DELIVERY:

1. MEASURE = (MARKET PRICE AT TIME BUYER LEARNED OF THE BREACH– CONTRACT PRICE) + INCIDENTAL DAMAGES + CONSEQUENTIAL DAMAGES – EXPENSES SAVED

   1. MARKET PRICE IS (§ 2-723):

1. AS OF THE PLACE FOR TENDER OR

   1. IN THE CASE OF REJECTION AFTER ARRIVAL, AT THE PLACE OF ARRIVAL

1. REPUDIATION:

1. MEASURE: (MARKET PRICE AFTER THE EXPIRATION OF A COMMERCIALLY REASONABLE TIME – CONTRACT PRICE) + INCIDENTAL + CONSEQUENTIAL DAMAGES – EXPENSES SAVED

1. 2-714: DAMAGES FOR BREACH OF WARRANTY

1. WHEN BUYER HAS ACCEPTED GOODS, HE/SHE MAY RECOVER FOR ANY NON-CONFORMITY OF TENDER THE LOSS RESULTING FROM SELLER’S BREACH

   1. MEASURE = [AT THE TIME AND PLACE OF ACCEPTANCE] THE VALUE OF THE GOODS AS WARRANTED – THE VALUE OF THE GOODS ACCEPTED + INCIDENTAL DAMAGES + CONSEQUENTIAL DAMAGES

   2. IN A PROPER CASE INCIDENTAL AND CONSEQUENTIAL DAMAGES MAY BE RECOVERED.

1. 2-715: INCIDENTAL AND CONSEQUENTIAL DAMAGES

1. INCIDENTAL DAMAGES INCLUDE EXPENSES REASONABLY INCURRED IN INSPECTION, RECEIPT, TRANSPORTATION AND CARE AND CUSTODY OF GOODS RIGHTFULLY REJECTED, ANY COMMERCIALLY REASONABLE CHARGES, EXPENSES OR COMMISSION IN CONNECTION WITH EFFECTING COVER AND ANY OTHER REASONABLE EXPENSE.

   1. CONSEQUENTIAL DAMAGES: ANY LOSS RESULTING FROM GENERAL OR PARTICULAR REQUIREMENTS AND NEEDS OF WHICH

1. DEFENDANT HAD A REASON TO KNOW

   1. AT THE TIME OF CONTRACTING

   2. AND THE DAMAGES COULD NOT HAVE BEEN PREVENTED BY COVER OR OTHERWISE

6. UCC § 2-716: Buyer’s right to specific performance

7. UCC § 2-718: Liquidation of Damages; Deposits

8. UCC § 2-723: Proof of Market Price: Time and Place

1. CASES

1. WILSON V. HAYS

   1. GERWIN V. SOUTHEASTERN CAL. ASS’N OF SEVENTH DAY ADVENTISTS

   2. AM/PM FRANCHISE ASSN. V. ATLANTIC RICHFIELD CO.

   3. CANNON V. YANKEE PRODUCTS CO., INC

   4. ARIES V. PALMER JOHNSON

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