Chapter 18
Contract Remedies
Monetary Damages
-Compensatory Damages: contract damages placing the injured party in a position as good as the one he
would have held had the other party performed; equals loss of value- loss avoided by injured party+
consequential damages.
oLoss of Value: value of promised performance minus value of actual performance
oCost Avoided: loss or cost the injured party avoids by not having to perform
oIncidental Damages: damages arising directly out of breach of contract such as costs
incurred to acquire the non-delivered performance from some other source
oConsequential Damages: damages not arising out of the breach but arising as a
foreseeable result of the breach such as lost profits and injury to person or property
resulting in defective performance
-Reliance Damages: contract damages placing the injured party in as good a position as she would have
been in had the contract not been made. Reliance damages include expenses incurred in preparing to
perform, in actually performing, or forgoing opportunities
-Liquidated Damage: reasonable damages agreed to in advance by the parties to a contract. If it is not
enforceable the injured party nevertheless in entitled to ordinary remedies for breach
-Limitations on Damages
oForesee ability of Damages: potential loss that the party now in default had reason to
know of when the contract was made
oCertainty of Damages: damages are not recoverable beyond an amount that can be
established with reasonable certainty
oMitigation of Damages: injured party may not recover damages for loss he could have
avoided by reasonable effort and without undue risk, burden, or humiliation
