contracts: april 15 2010 class notes.

remedies recap.

the hydraform case about the stoves. the american was late in its delivery and selling defective steel to hydraform. there was a clause that proported to limited consequential damages. the lower court found the clause to be unconscionable. assuming consequential damages, how far do they go? souter said that the consequential damages ruling, though it goes beyond the clause, is still limited: all that hydraform can get is lost profits on the 150 stoves it didn't sell because american steel was late and provided defective steel. it can't get diminished business value.

bohac v. dep't of agriculture.
not a contracts case, but the appellate court is looking at the meaning of consequential damages and making an inquiry into whether they include nonpecuniary losses. consequential damages does not cover nonpecuniary losses. sharfman calls it the "undertaker's exception": see p.1060 for the restatement... if you do something reeeeeally anguishing like messing up on a body, and that causes grave (haha) emotional disturbance, you may be covered by the remedies doctrine. also innkeepers and carriers are covered.

in the long island case of broken engagement, the court held damages for nonpecuniary loss was not a legally cognizable mental anguish for contract breach remedy.

acquista may be an exception to where nonpecuniary losses may be allowed remedy.
plantiff is seeking damages in excess of the insurance company limits of payout. the theory is that there is some sort of nonpecuniary/emotional/nonfinancial losses associated with the denial of coverage.
the case gives some theories: maybe the doctor was deprived of medical treatment or other therapies that would have made his life better, and now he's suffered damages because of the lack of treatment. this opens the door to a tort claim via contract law: "why not just bring a tort claim here? there's a claim of emo distress and loss of opportunity?" sharfman says that in torts you have IIED but here even if it wasn't intentional, you stillhave rise to distress even without intention, just need breach or unconscionability or reliance under contract.

guy got the car and made payments. then realized the new car was used. stopped payments, and car dealer sued. common law rule: you don't get punitive damages. but this is a case where defendant got them on counter claim. the general rule for punitive damages is that they must have some reasonable relation to the compensatory reward. what does reasonable mean? sharfman says he doesn't know but that it could be like a ratio: J. Kennedy says that a ration more than 10/1 is too high and without due process.

money from amco would not work here because there's some losses to lackleed in this trailer park are dependent on the gas. they would have a claim, and that could potentially not be foreseeable to amco and so the compensatory would not be full under hadley and so amco would be held to specific performance.

go ahead and breach and pay: the economic doctrine under posner
here in walgreens case, the landlord wants to breach the lease and rent to another pharmacy. the landlord wants to pay damages and walgreens wants an injunction because the monetary damages would under compensate. posner was happy with the lower court. for our purposes: if you can come up with the arguments for why the money remedy is likely to under compensate then you're in inadequacy at law territory in which case specific performance/injunction could definitely work. you can try to calculate what walgreens profits would be against pharmor's but there's nothing certain to that about the loss. though it's unclear as to the loss it still is reasonable that the money would undercompensate.

notes: injunction goes pretty far -- the contractor who hasn't even begun to build the mall yet is ordered to build it.

negative injunction case: abc v. dick wolf
this is a labor/employee contract. you can't force someone to perform on an employment contract. you might owe damages, but there's no specific performance. wolf doesn't want to go forward with abc, but instead wants to move to cbs and abc wants a negative injunction to make wolf unable to work for cbs. can't as someone to perform specifically under an employment contract but you can get an injunction to keep them from working with someone else. losses: loss of advertising, loss of viewership, etc.