Question

1. Name the two remedies a court may award a plaintiff when no contract exists. What are the three elements for each of these two remedies?

Answer 1

The fundamental purpose of remedies in noncriminal cases is not to punish the breaching party but—if possible—to put the no breaching party in the position he or she would have been in had there been no breach. Or, as is said, the purpose is to make the no breaching party whole.

There are two general categories of remedies—legal and equitable. In the category of legal remedies are damages. Damages are money paid by one party to another; there are several types of damages. In the category of equitable remedies are these three: specific performance, which means a person is ordered to deliver a unique thing (land or a unique personal property, such as a painting or an antique car); injunction, a judicial order directing a person to stop doing what he or she should not do (such as competing with a former employer in violation of a noncompeting agreement); and restitution, which means putting the parties back into the position they were in before the contract was made.

Two types of remedies are-

1. Compensatory remedies- Compensatory remedies (also called “actual damages”) cover the loss the non breaching party incurred as a result of the breach of contract. The amount awarded is intended to make good or replace the loss caused by the breach.

There are two kinds of compensatory damages that the non breaching party may be entitled to recover:

A. General Damages. General damages cover the loss directly and necessarily incurred by the breach of contract. General damages are the most common type of damages awarded for breaches of contract.

Example: Company A delivered the wrong kind of furniture to Company B. After discovering the mistake later in the day, Company B insisted that Company A pick up the wrong furniture and deliver the right furniture. Company A refused to pick up the furniture and said that it could not supply the right furniture because it was not in stock. Company B successfully sued for breach of contract. The general damages for this breach could include:

• refund of any amount Company B had prepaid for the furniture; plus
• reimbursement of any expense Company B incurred in sending the furniture back to Company A; plus
• payment for any increase in the cost Company B incurred in buying the right furniture, or its nearest equivalent, from another seller.

B. Special Damages. Special damages (also called “consequential damages”) cover any loss incurred by the breach of contract because of special circumstances or conditions that are not ordinarily predictable. These are actual losses caused by the breach, but not in a direct and immediate way. To obtain damages for this type of loss, the non breaching party must prove that the breaching party knew of the special circumstances or requirements at the time the contract was made.

Example: In the scenario above, if Company A knew that Company B needed the new furniture on a particular day because its old furniture was going to be carted away the night before, the damages for breach of contract could include all of the damages awarded in the scenario above, plus:

• payment for Company B’s expense in renting furniture until the right furniture arrived.

2. Punitive remedies. Punitive damages (also called “exemplary damages”) are awarded to punish or make an example of a wrongdoer who has acted willfully, maliciously or fraudulently. Unlike compensatory damages that are intended to cover actual loss, punitive damages are intended to punish the wrongdoer for egregious behavior and to deter others from acting in a similar manner. Punitive damages are awarded in addition to compensatory damages.

Punitive remedies are rarely awarded for breach of contract. They arise more often in tort cases, to punish deliberate or reckless misconduct that results in personal harm.

Three elements of Remedies-

Declaratory Remedies

Declaratory remedies or declaratory judgment, do not belong to the category of damages or equities. They are legal determinations made by the court to address ambiguity or disputes without sanctioning an action or practice against the parties involved. Declaratory remedies serve to affirm the validity of the claims and requests made by the plaintiff, accompanied by injunction in selective cases at the discretion of judges or juries. Declaratory remedies are a component of preventive adjudication because in cases that demand only declaration, no actual harm or loss has been incurred by the plaintiff

Equitable Remedies

There are three characteristics of equitable remedies that differ from damages. First, the jury is not used in cases involving equitable remedies. Second, in sanctioning equitable remedies, the court does not make decisions based on precedents but tends to rely on the justice that needs to be served. Third, equitable remedies are not monetary. Rather, they include actions, properties, etc., that the court orders the defendant to perform in order to bring both parties in a lawsuit back to the position in which they were prior to their contract.

Legal Remedies

Legal remedy is a way of using the legal system to make sure that someone's rights are not taken away from them. A legal remedy, also referred to as judicial relief or a judicial remedy, is the means with which a court of law, usually in the exercise of civil law jurisdiction, enforces a right, imposes a penalty, or makes another court order to impose its will in order to compensate for the harm of a wrongful act inflicted upon an individual