Remedies & Damages
The goal is always the same: put the non-breacher where performance would have put them. Every measure, limit, and UCC remedy is a variation on that theme.
The measures
| Measure | What it gives | 🐚 Example |
|---|---|---|
| Expectation | The benefit of the bargain—value promised minus value received | Rosa promised Lana a $2,000 machine for $1,500; cover costs $2,000 → Lana gets $500 |
| Consequential | Downstream losses—only if foreseeable at formation (Hadley) | Liv's late crankshaft shuts the mill—recoverable only if Liv knew the mill sat idle without it |
| Incidental | Costs of dealing with the breach—storage, inspection, finding cover | Rosa's ad to resell the rejected chairs |
| Reliance | Out-of-pocket spending—the fallback when expectation is too speculative | Noodle's new venue deposit after Liv cancels; lost profits from an untested café are too uncertain |
| Restitution | The benefit conferred—even for a breaching plaintiff, and off-contract (quasi-contract) | Liv quits mid-job but Rosa keeps the half-built patio—Liv recovers its value, minus Rosa's damages |
The three limits
Foreseeability (Hadley v. Baxendale): consequential damages must have been foreseeable to the breaching party at contract formation—flowing naturally, or from special circumstances they were told about.
Certainty: damages must be proven with reasonable certainty—new-business lost profits are the classic casualty.
Mitigation: no recovery for losses reasonably avoidable. Wrongfully fired Lana must take a comparable job—not an inferior one—and her earnings (or what she should have earned) reduce the award.
UCC remedies at a glance
- Cover: buy substitute goods in good faith → cover price − contract price
- Market: market price (at time buyer learned of breach) − contract price
- Warranty: value as warranted − value as delivered
- Specific performance for unique goods; replevin for identified goods after reasonable cover efforts fail
- Resale: contract price − resale price (commercially reasonable sale)
- Market: contract price − market price at tender
- Lost-volume seller: full lost profit—the resale would have happened anyway
- Price action only if goods were accepted, destroyed after risk passed, or unresellable
Lana cancels her order for one of Rosa's mass-produced espresso machines. Rosa sells that unit to Noodle for the same price—but as a lost-volume seller she still recovers her lost profit: she would have made both sales.
Specific performance
Available only when money is inadequate: land (always unique), unique goods (antiques, custom builds, output in short supply)—never for personal services (involuntary servitude; a negative injunction against working for a competitor may issue instead). Equitable defenses—laches, unclean hands—apply.
Liv refuses to close on the lot she sold Rosa—specific performance, land is unique. Liv refuses to sing at Rosa's reopening—no order to sing, though a court might enjoin Liv from singing across the street at Noodle's that night.
Liquidated damages
Enforceable if damages were difficult to estimate at formation and the amount is a reasonable forecast—not a penalty. A fixed sum untethered to any anticipated harm, or one amount for every conceivable breach, smells like a penalty and fails; actual damages then govern.
“$500 per day of delay” on Rosa's café build—reasonable forecast of lost business, enforced. “$100,000 for any breach, however small”—penalty, struck.
Essay order: name the breach → expectation math first (show the numbers) → add foreseeable consequentials and incidentals → subtract what mitigation would have saved → check for a specific-performance or liquidated-damages overlay. Examiners award the arithmetic, not the labels.
Where the points are
The traps examiners actually set.
- Most tested
- Hadley foreseeability at formation; mitigation with a comparable-job wrinkle; cover vs. market measures; the lost-volume seller; liquidated damages vs. penalties.
- Classic traps
- Punitive damages for breach (never, absent an independent tort); new-business lost profits (certainty); specific performance of services; awarding the contract price when resale was possible; consequentials the breacher never knew about.
Keep going: Anticipatory Repudiation quick chat Damages MEE guide UCC Remedies MEE guide Contracts Attack Sequences