Please use the IRAC

Issue

Rule ( already provided)

Analysis

and Conclusion

Allthequestionsbelowrelyonthisfactpattern(CE8):ChelsieHochesterisasuccessful localwriterwhosefameexplodedafterthepublicationofherlastbook.Hochesteris scheduled todoa3 weekbooktourintheUnitedKingdom(UK).Shehasnevertraveled outsideofthe UnitedStatesandwantssomeonetogowithhertomanageherschedule. HochesterhiresDana DavilatoaccompanyhertotheUKasapersonalassistant.Theysignan employmentcontract draftedbyHochesterherselfinwhichDavilawouldbepaid$5000for assistingHochesterwith dailybusinessorpersonaltasksrelatedtoher3weekbooktour.

1. Anticipatory Repudiation. Two weeks before the scheduled tour, Davila sends Hochester a text stating that she cannot accompany Hochester to the UK because her grandmother just had a stroke and is temporarily paralyzed on the right side of her body. As there is no other relative around to care for her grandmother, that responsibility falls on Davila. Hochester replies to the text: "We have a contract. I need to know whether you will be there on the first day." Davila replies: "I may be able to put her grandmother in a nursing home, but it would take a while to make that arrangement. Can I join you in England a week after the first scheduled tour?" Hochester replies. "That is unacceptable. I consider you to be in breach of our agreement. I will speak with an attorney about this." Can Hochester sue Davila for breach of contract?

The rule:

REPUDIATION IS A MATERIAL BREACH. When anticipatory repudiation occurs, it is treated as a material breach of the contract, and the nonbreaching party is permitted to bring an action for damages immediately. The nonbreaching party can file suit even though the scheduled time for performance under the contract may still be in the future. Until the nonbreaching party treats this early repudiation as a breach, however, the breaching party can retract the anticipatory repudiation by proper notice and restore the parties to their original obligations.

An anticipatory repudiation is treated as a present, material breach for two reasons. First, the nonbreaching party should not be required to remain ready and willing to perform when the other party has already repudiated the contract. Second, the nonbreaching party should have the opportunity to seek a similar contract elsewhere. Indeed, that party may have the duty to do so to minimize loss.

2. Remedies. Using additional facts in #1, suppose Hochester has to look for another personal assistant. Because of the short timeframe in which she has to do it , she is able to find a replacement, but has to pay this person $500 more what she would have paid to Davila. She also spends $100 to advertise for the job in various newspaper and magazines. She has to cancel an event at which she is supposed to give a speech in order to interview candidates. She loses $200 in speaker fees. She also hires a contract attorney to draft a contract between the new personal assistant and herself. She paid that attorney a flat fee of $250. The airline company charges Hochester $125 for changing the flight from Davila's name to the new assistant. Hochester then spends $300 on a 5star spa treatment to relieve stress from dealing with Davila. If Hochester sues Davila in court for a breach of contract, what remedies are available to her?

Discuss (not list) all damages to which she is entitled, including the specific amount of money she can recover, if any, and specify whether they are consequential or incidental or other types of compensatory damages, and WHY she's entitled to each damage. I recommend you use the sample formula to calculate Damages. Do nott just copy the chart and replace the numbers. Explain why she's entitled to them.

No IRAC format necessary for this one.

Here is a sample formula for calculating damages in breach of contract cases: Start with the value of the performance as promised (This is the original amount agreed upon by the parties. For example, you and I had a valid contract in which we agreed that I would sell you 20 lbs of apples for $20. I delivered the apples to you, but you decided to buy only 10 apples (about 3 Ibs) and gave me $1 for them. The original value of the performance (also called "contract price") is $20.) - The value of the performance actually rendered (This refers to what you actually paid me. Because you paid me only $1, then that's the value of the performance you rendered. If you didn't pay anything, then the value is zero.) - The value of any losses avoided, or mitigated, by the non-breaching party (mitigation is required in almost all breach of contract cases) (This means I--as the non-breaching party--had to mitigate or avoid any further losses or damages. So I needed to try and sell the remaining 17 Ibs before they rot. My failure to mitigate will affect the amount of damages I can receive. I was able to sell only 10 Ibs at the farmer's market for $10. I tried selling to others, but no one wanted them.) + Incidental damages (These refer to damages that result directly from the breach.) (This loss is the result from your failure to buy what you agreed to. Say I spend $5 dollars to advertise in the newspaper or rent a space at the farmer's market for $15 to sell the apples, those costs are the direct result of your breach.) + Consequential damages (These refer to damages that are not the direct result of the breach, but they are foreseeable. For example, because I had to stay at the farmer's market half a day to sell the apples, I missed my opportunity to make $15 being a hostess at my aunt's bed-and-breakfast inn. This damage isn't the result of the breach, but I hope you can see why it's foreseeable. If I had to mitigate my damages by trying to sell the apples at the farmer's market, then it's foreseeable that I wouldn't be able to do other things I normally do during the time I was at the farmer's market.) = Compensatory Damages (You do the calculation above to arrive at compensatory damages.) Example: The value of the performance promised $20 (this is the price we agreed to) Value of performance rendered $1 (remember, you only paid me $1) Value of losses avoided/mitigated $10 (I was only able to sell $10 worth of my apples at the farmer's market) + Incidental damages: Advertising + $5 (this cost is a direct result of the breach) Farmer's market space + 1 $15 (also a direct result of breach) + Consequential damages: Loss of money working as hostess + $15 (not direct, but foreseeable loss) = Total Compensatory Damages $44 (this is the amount of damages I am entitled to recover from you in court due to your breach)Damages In contract law, the legal remedy designed to compensate the nonbreaching_party for the loss of the bargain. The nonbreaching_party frequently has a duty to mitigate (lessen or reduce) the damages suffered. There are four broad categories of damages. In addition, a contract may contain a provision for liquidated damages. 1. Compensatory damages-Damages that compensate the nonbreaching_party for injuries actually sustained and proved to have arisen directly from the loss of the bargain resulting from the breach of contract. a. In breached contracts for the sale of goods, the usual measure of compensatory damages is the difference between the contract price and the market price. b. In a seller's breach of a contract for the sale of land, the measure of damages is ordinarily specific performance. For a buyer's breach, the measure of damages is typically the same as in contracts for the sale of goods. c. In breached construction contracts, the measure of damages depends on which party breaches and at what stage of construction the breach occurs. 2. Consequential damages-Foreseeable damages that result from special circumstances beyond the contract itself (also called special damages). The damages flow only from the consequences of a breach. For a party to recover consequential damages, the breaching_party must have known at the time the contract was formed that special circumstances existed that would cause the nonbreaching_party to incur additional loss on breach of the contract. 3. Punitive damages-Damages awarded to punish the breaching_party. Usually not awarded in an action for breach of contract unless a tort is involved. 4. Nominal damages-Damages small in amount (such as one dollar) that are awarded when a breach has occurred but no actual injury has been suffered. Awarded only to establish that the defendant acted wrongfully. 5. Mitigation of damages-In most situations, when a breach of contract occurs, the injured party is held to a duty to mitigate, or reduce, the damages suffered. 8. Liquidated damages-Damages specified in a contract as the amount to be paid to the nonbreaching_party in the event the contract is breached. Clauses providing for liquidated damages are enforced if the damages were difficult to estimate at the time the contract was formed and if the amount stipulated is reasonable. If the amount is construed to be a penalty, the clause will not be enforced. Equitable Remedies 1. Rescission-A remedy whereby a contract is canceled and the parties are restored to the original positions that they occupied prior to the transaction. Available when fraud, mistake, duress, undue influence, lack of capacity, or failure of consideration is present. The rescinding party must give prompt notice of the rescission to the breaching_party. 2. Restitution-When a contract is rescinded, both parties must make restitution to each other by returning the goods,_property, or funds previously conveyed. Restitution prevents the unjust enrichment of the parties. 3. Specific performance-An equitable remedy calling for the performance of the act promised in the contract. This remedy is available only in special situations-such as those involving contracts for the sale of unique goods or land-when monetary damages would be an inadequate remedy. Specific performance is not available as a remedy for breached contracts for personal services. 4. Reformation-An equitable remedy allowing a contract to be "reformed," or rewritten, to reflect the parties'true intentions. Available when an agreement is imperfectly expressed in writing. Recovery Based on Quasi Contract An equitable theory imposed by the courts to obtain justice and prevent unjust enrichment in a situation in which no enforceable contract exists. The party seeking recovery. must show the following: 1. A benefit was conferred on the other party. 2. The party conferring the benefit did so with the expectation of being paid. 3. The party conferring the benefit did not volunteer the benefit. 4. The party receiving the benefit would be unjustly enriched if allowed to retain the benefit without paying for it. Contract Provisions Limiting Remedies A contract may provide that no damages (or only a limited amount of damages) can be recovered in the event the contract is breached. Under the Uniform Commercial Code, emedies may be limited in contracts for the sale of goods. Clauses excluding liability for fraudulent or intentional injury or for illegal acts cannot be enforced. ClausesCONDITIONS OF PERFORMANCE Contract obligations may be subject to the following types of conditions: 1. Condition precedent-A condition that must be fulfilled before a party's promise becomes absolute. 2. Condition subsequent-A condition that, if it occurs, operates to terminate a party's absolute promise to perform. 3. Concurrent conditions-Conditions that must be performed simultaneously_Each party's absolute duty to perform is conditioned on the other party's absolute duty to perform. Discharge by Performance A contract may be discharged by complete (strict)_performance or by substantial performance. In some instances, performance must be to the satisfaction of another. Totally inadequate performance constitutes a material breach of the contract. An anticipatory repudiation of a contract allows the other party to sue immediately for breach of contract. Discharge by Agreement Parties may agree to discharge their contractual obligations in several ways: 1. By rescission-The parties mutually agree to rescind (cancel) the contract. 2. By novation-A new party is substituted for one of the primary_parties to a contract. 3. By accord and satisfaction-The parties agree to render and accept performance different from that on which they originally agreed. Discharge by Operation of Law Parties' obligations under contracts may be discharged by operation of law owing to one of the following: 1. Material alteration. 2. Statutes of limitations. 3. Bankruptcy. 4. Impossibility of performance. 5. Commercial impracticability. 6. Frustration of purpose