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2

But this amount buyer gets back may have deducted from it the seller’s damages under § 2-708(2)

VI

EXAMPLES

A

Ex: K price $75k; K costs $60k; actual costs so far $10k; actual payments so far $5k.  Recovery = [$75k - $60k] + [$10k] – [$5k] = $20k

B

Ex: K price $1500; K costs $1250; actual costs so far $200; actual payments so far $150; salvage $5.  Recovery = [$1500 - $250] + [$200] – [$150 + $5] =  $1295

Remedies — Limits on Exp Dams, Liq Dams

I

MITIGATION.  (UCC § 2-704(2)) (Rest § 350)

A

No recovery for damages which could have been avoided w/ R’BLE EFFORTS

1

Eval of reasonability takes into account all circums.  Ex: breach right before hard deadline may require more expensive alternative.  Tough luck for breaching party

B

Construction K:

1

Once notice rec’d of other party’s repudiation or refusal to perf, duty not to continue work.  (Luten Bridge)

2

No duty to take on another job in time allotted for orig job

3

AND if contractor DOES take on another job, his profits on that job gen’y won’t be deducted from damages b/c could have hired more workers to do job (unless buyer can show otherwise)

C

Sale of goods:

1

Seller’s breach: buyer has duty to cover.  (UCC § 2-715(2))

2

Buyer’s breach: seller may not run up freight charges.  If in process of manufacturing, must stop, unless completion would aid resale.  (UCC § 2-704(2))

D

Employment:

1

Ee must make r’ble effort to obtain comparable employment.  Need not take different, inferior, distant employment.  (Shirley MacLaine)

2

Damages for wrongfully discharged ee = [amt of salary in K] – [salary ee did earn or would have earned w/ r’ble effort to mitigate]

E

Expenses incurred in mitigating are recoverable

F

Breaching party has duty to mitigate damages too

1

Ex: A contracts w/ B for concrete.  B can’t deliver.  B claims A should have mitigated damages by getting C to supply concrete.  But B could just as easily have contracted w/ C to get the concrete

II

FORESEEABILITY

A

Breaching party is liable for damages that are ELTS:  (Hadley)

1

R’BLY F’BLE from breach at time K made

2

OR may be R’BLY SUPPOSED to have been in contemplation of both parties at time K made

B

This principle applies to REL DAMS as well as exp dams

C

Basically, this just means that conseq dams may be recovered only if ELTS:

1

At time K was made

2

D had reason t foresee dams as probably result of breach

3

D’s breach was chief cause (or subst factor in, where multiple causes) of injury

D

Type of damage that occurs must be of type that is gen’y caused by delay

1

Ex: if you delay shipment of commodity, you won’t be liable for loss of profit due to unpredictable and normal mkt fluctuations

a

But if you delayed, say, a shipment of oranges and by the time they arrived the orange season had arrived, driving down owner’s profit, you’d be liable for that loss of profit

E

Cts distinguish betw GENERAL or DIRECT damages, and SPECIAL or CONSEQUENTIAL damages

1

General damages are NEVER barred by f’bility principle, b/c they naturally flow from breach.  Ex: seller’s breach for sale of goods.  Buyer’s cost of cover = gen dams

2

Conseq dams MAY BE BARRED by f’bility principle

23

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