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This chapter discusses the various types of monetary damages available for contract remedies. It covers compensatory damages, including loss of value, cost avoided, incidental damages, and consequential damages. The chapter also explores reliance damages and liquidated damages, as well as limitations on damages such as foreseeability, certainty, and mitigation.
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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. o Loss of Value: value of promised performance minus value of actual performance o Cost Avoided: loss or cost the injured party avoids by not having to perform o Incidental Damages: damages arising directly out of breach of contract such as costs incurred to acquire the non-delivered performance from some other source o Consequential 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 o Foresee ability of Damages: potential loss that the party now in default had reason to know of when the contract was made o Certainty of Damages: damages are not recoverable beyond an amount that can be established with reasonable certainty
avoided by reasonable effort and without undue risk, burden, or humiliation