DAMAGE PROBLEMSRUBRIC

-PERFORMANCE

oCOMPLETE PERFORMANCE

oSUBSTANTIAL PERFORMANCE

oMATERIAL BREACH

-ANTICIPATORY REPUDIATION? OPTIONS:

WAIT

SEEK COVER & SUE

CANCELATION

-REMEDIES

oDAMAGES

-PREREQUISITES:CERTAINTY, FORESEEABILITY, MITIGATION

-EXPECTATION INTEREST- COMPENSATORY DAMAGES (3 POSSIBLE TYPES):

DIRECT LOSS - VALUE OF REPLACING BREACHERS CONTRACT PERFORMANCE (OR COSTS AVOIDED)

CONSEQUENTIAL DAMAGES - SPECIAL LOSSES PARTICULAR TO THIS PLAINTIFF

INCIDENTAL DAMAGES - COSTS INCURRED SEEKING "COVER"

-RELIANCE INTEREST

PREFER EXPECTATION

= COSTS & LOSSES INCURRED BECAUSE EXPECTED TO BE IN CONTRACT

-RESTITUTION INTEREST

PLAINTIFF RESTORED TO PRE- CONTRACT POSITION

oEQUITY

-WHEN DAMAGES ALONE ARE NOT ENOUGH

-INCLUDE: INJUNCTION; SPECIFIC PERFORMANCE; RESTITUTION; RECISSION; REFORMATION; PROMISSORY ESTOPPEL; QUASI-CONTRACT; QUANTUM MERUIT

Corner Caf ("CC") was the hot new eatery in town.Its owners, San and Pan, sought to devise unique, herb-based delicacies.Their signature dish was cilantro pesto over fresh quinoa noodles.Business was very good.CC contracted with Verdant Glenn Farms ("VGF"), the largest source of organic herbs in the region, to buy 1000 pounds of cilantro at $4.00 per pound.In addition to the pesto needed for its own dishes, CC also had contracts to provide pesto to other restaurants in town; half its pesto went to filling the orders from other restaurants.A week before the cilantro crop at VGF was to be harvested and the order delivered to C.C., the area was hit by a record cold snap that devastated half the crop in the region.VGF immediately notified CC of the damage to its fields and that it would not be able to fill the entire order.VGF then tried, largely in vain, to find another source to buy replacement cilantro inventory.

In the wake of the freeze, the wholesale market price for cilantro sky-rocketed from $2.00 to $5.00 per pound and supply was severely limited.As a relatively small firm, this was much more than VGF could absorb.After being notified by VGF, CC spent $100 for temporary staff to help to look for alternative sources; none could be found for less than $6.00 per pound, retail price.By harvesting every viable plant in its own fields, and buying all the product it could get from competitors, VGF delivered 980 pounds of cilantro to CC at the agreed time and place.VGF billed CC the contract price of $4.00 per pound for the cilantro it delivered.CC accepted the delivery with a reservation of rights, demanding that VGF find a way to deliver the final 20 pounds.VGF maintained that it had gone to extraordinary lengths to fill the order and, in any case, it should be discharged from its duties under the original contract.Identify and discuss the contractual issues raised by this situation.What types and amounts of damages should be available?To whom and for what?Who should prevail?What is the merit of the parties' respective positions? (15 pts.)