contracts: april 8 2010 class notes.

compensatory damages recap.

lost sale doctrine.
locks v. wade
jukebox case - renter argues that the jukebox is rented to someone else and so the lessor has mitigated loss and damages are 0. the owner says hell no -- we had additional capacity, we lost these sales. the fact we had other sales is irrelevant (we were gonna hav eother sales anyways). the lessor sale view prevails.

so maybe land is different... 
you have an apt you want to lease to someone, but then you are able to lease to someone else.
but sharfman thinks that that's not always the case (hotel room example: you can rent the hotel to someone else, even though the other hotel rooms may be empty...)

the principle is not between chattel and real property but whether it's excess capacity for the non-breaching party. the fact that there were other sales is immaterial and can't be counted as mitigation towards the breach.

employment. 
if i get another job elsewhere later, does my new job mitigate damages owed by first employer? maybe.
it's not apples to apples though -- if one job is better/worse than another, that will be taken into consideration in offsetting the wages from context to context.

unemployment benefits cannot count in mitigation (collateral source rule, i received some income from a collateral source not my employer). the collateral source cannot be used to mitigate.

if you are able bodied, but just lazy and you didn't accept another job, can the fact that you could have worked be mitigation? in principle, yes - but employement is a complex topic and so the application will be different. in child support cases, the court will apply damages owed against the party who is unemployed but able bodied/ should be working.

the 666 building case.
able landlord, and tenant breaches. the landlord is paranoid and is covered anyway. but is the landlord also hyper-aggressive in that he wants to recover the insurance cost from the tenant? the tenant is only liable for the priium.
hypo: what if L bought insurance anyawy? T could prob argue unjust enrich if he had paid (this only works if the L doesn't know about the T lack of insurance). purchase of insurance can be a mitiagtion technique.

reliance. 
wood for burbon barrels -- did the buyer have a duty to mitigate prior to the date of performance? because the seller could have performed, even though it had announced to the buyer that it would have ot breach. the buyer could have remedied then and bought the wood subsequently. here, the court said that the buyer had no oblig to mitigate prior to time of performance.

in the instance of inefficient performance.
rivers v. dean.
defendant agreed to build the addition onto the P's house. the addition was unusable. what should the damages be?
X -- current value
X+Y -- promised value
Z -- cost of repair
Z> Y
know the comparison to jacob v. kent (you're not entitled to
in this case, the owner of the home has an addition that is not usable - the breach is material and the breacher is not innocent, so the court is not worried about inefficient performance.

peewee house v. cole
the cost of restoration would be Z. the difference in market value is Y. the jury gives a number between Y and Z. and on appeal, the lower figure is awarded (the Y figure) which leaves the peewees with an unrestored farmhouse and stuck in the pits remedy-wise. this case is hard to reconcile with rivers. sharfman thinks it is a bad result.

shackman.
again, Z>Y
the contractors didn't do grating that needed to be done. that is worth 90K (Z) the diminution is Y. the court awards the larger figure to the plaintiff.... sharfman thinks the award differnces relates to different jurisdictions.


hadley v. baxendale

hydraform

bohac... why is this in our book? because the statute uses the term "consequential 

acquista v. new york life insurance
what extra harm does the bad faith do?
insurer is crossing the line from bad faith to tort

boise v. clark
see the notes, which discuss constitutional limits to punitive damages as well
are punitive damages available for breach of contract? -- yes
in idaho: they are available if
1. deceitful/ fraudulent
2. material omission
tortious conduct, but still must bear a relationship to the award (see BMW v. gore, where the actual damage was like $200 but the punitive was like $10M)

laclede
there is an inadequate remedy at law, instead requires more of a remedy at equity perhaps. 
restatement - special interests, though the general rule is that it is hard to grant this kind of remedy. the 8th cir grants specific performance on the contract.
when can you get specific performance?

see p. 1031 problems.
personal services contracts is a general matter where you can't force people to give their services as equitable remedy.

specific performance concerning land...
walgreens v. sara creek 
this is one of posner's favorite cases, and one that distinguishes his law and economics theoretical interpretations

you're only entitled an equitable remedy when there's an inadequate remedy at law.
the doctrine: the number is very speculative when trying to figure out how to calculate 10 year profit loss.
1. harm to the movant
2. harm to non movant
3. efficency arguments

posner's efficiency arguments: he argues efficiency, social costs, and that a

notes following walgreens: courts granting specific performance for a site that hasn't been built yet, but the courts are quick to say that they won't always force someone to build something that hasn't been built yet!

abc v. wolf 
the existing contract allowed him to negotiate in good faith, and that if he did receive an offer, he had to give abc the opportunity of first refusal (give them the chance for abc to match or best the offer)

does abc have the right to stop wolf from working someplace else?
no -- there's no non-compete clause in this case