Question

When reviewing the different contract classifications,you will find that express contracts are few in number and implied reigns supreme. In addition, quasi-contracts are not contracts, but are the court's way of making a wronged party whole due to unjust enrichment of the other party to the contract, which usually supports the equitable remedy of promissory estoppel (Reed, Pagattaro, Cahoy, Shedd, & Magid (2015). Under what conditions can contractual duties be modified? When does promissory estoppel apply? How are damages different than equitable remedies? Provide examples.

Answer 1

Contractual duties can be modified when both the parties agree to make the modifications. The parties can modify the contract in good faith to correct the mistakes in the contract. The contractual duties can be easily modified before signing the contract by discussing with each other but modification after signing the contract can be difficult. After signing the contract all the parties should agree to the modifications and some of the contract cannot be modified when there is terms mentioned do not allow making modifications to the contract. The duties can be modified when the other party has not fully performed the duties and if the modification is fair and equitable. Consider a contract made to sell used car. Suppose the seller feels that the amount agreed upon in the contract is not reasonable and want to sell at a higher price. The contract can be modified after negotiating with the buyer once again and if the buyer agrees to pay a higher amount.

The promissory estoppel applies when one of the parties relies on the promise made by other party to his subsequent detriment. The oral contracts made by two parties become enforceable under the doctrine of promissory estoppels. Consider the above case where the seller agrees to sell you the car for the price agreed and you try to arrange the cash by selling some of your valuable assets. When you approached the seller with the price he says the car is already sold. Promissory estoppel applies here as you have relied on the promise made by the seller to your detriment and help you to avail remedies.

Damages are the legal remedies mostly in the form of monetary compensation for injury but equitable remedies are related to fairness and do not include monetary damages. Damages include compensatory damages and consequential damages and the non breaching party is provided with compensatory damages in the form of monetary compensation to place the party in the same position where the party could have been if the contract was performed, and consequential damages permit to recover the monetary losses occurred due to breach of contract. Equitable remedies include recession and restitution, specific performance and reformation. Recession compensates the injuries through cancelling the contract so that the non breaching parties can occupy their positions prior to the injury. Restitution is the equitable remedy that allows the parties to occupy the position prior to the breach or the position where the parties could have been if the breach did not occur. Specific performance ensures the performance of the act promised in the contract and reformation allows the court to rewrite the contract to reflect the parties’ true intentions. Consider the given example involving the sale of the car where the seller has agreed to sell the car to a third party breaching the contract. Here the damages would constitute the compensation given in the form of monetary compensation which would help the non breaching party to recover the losses happened through the sale of assets as he relied on the seller’s promise. Equitable remedies can be applied if the car is yet to be sold and using special performance would require the seller to ensure the performance as agreed in the contract and sell the car to the non breaching party.