Damages

1. Compensatory Damages
2. Punitive Damages
3. [Nominal Damages]
   
   Contract damages:
   
   "Virtually any breach gives the injured party a claim for damages for at least nominal damages, 'to which ... for reasons we do not understand every victim of breach of contract, unlike a tort victim, is entitled.' Farnsworth on Contracts 12.8 (quoting Chronister Oil Co. v Unocal Ref. & Mktg., 34 F.3d. 462, 466 (7th Cir. 1994) (Posner, C.J.))
   
   Contract remedies generally
   
   (First, bargaining)
   Is a valid contract formed?
   If yes, is there breach?
   If breached, does the contract provide for liquidated damages?
   Are the liquidated damages a penalty?
   If yes, the liquidated damages are unenforceable
   If no, the liquidated damages apply
   If not, there is an ambiguity in the contract, and default rules apply
   expectation damages:
   -no speculation about damages
   -only foreseeable damages apply (cf. consequential damages)
   -the injured party has a duty to mitigate
   -the cost of performance is the default rule
   -use the change in expected value if performance is wasteful, unreasonable, or impossible
   reliance damages
   -the injured party has a duty to mitigate
   -no speculation about damages
   restitution damages
   -there must be partial performance of the contract
   -measured by the unjust enrichment of the defendant by the plaintiff minus P's own enrichment
   equitable remedies:
   -specific performance
   -damages for land contracts
   -injunction
   -recission
   - for cases of mutual mistake of fact or unilateral mistake
   - damages for land contracts
   - lack of competency
   If no, is there reliance on the invalid contract?
   Does promissory estoppel apply?
   If so, P can get reliance damages
   If not, P gets nothing
   
   Types of contract remedies
   
   Remedies at law:
4. expectation damages remedy the interest in realizing the value of expectancy created by another's promise; attempt to put the plaintiff in as good a position as it would have been had the contract been performed
   consequential damages
5. reliance damages attempt to put the plaintiff back in the position in which that party would have been had the contract not been made
6. damages for land contracts
   
   Equitable remedies:
   injunction
   [test damages] attempt to prevent unjust enrichment by allowing a party to to recover values conferred on the other party through efforts to perform a contract
   quantum meruit
   specific performance
   recission
   
   Non-damage remedies:
7. liquidated damages and penalties
8. [non-compete clause]s
   
   Limitations on damages
   avoidability limitation
   foreseeability limitation
   emotional loss limitation
   
   Economic analysis of contract remedies
   
   Where
   c=cost of performance
   p=price of party's performance=100
   v=value of party's performance
   
   Cost Seller's desire Kaldor-Hicks expectation damages specific performance
   (p-c>0) (v>c) (50)
   
   50 perform perform perform perform
   
   120 breach perform perform perform
   
   200 breach breach breach breach
   
   Notice that
   (1) the buyer and seller can negotiate around remedies, even specific performance (see Coase Theorem)
   (2) specific performance has low transaction costs for the court
   
   See Calabresi corollary
   [icon: skull]
   [alias: damages]
   [alias: remedies]
   [alias: remedy]