142 MODULE 23 CONTRACTS

EXAMPLE: X agrees to convey and Y agrees to pay for land on April 1. On February 1, Y learns that X has sold
the land to Z. Y may sue before April 1 , or he may wait and sue on April 1.
EXAMPLE: M agrees to deliver 1,000 widgets to Q by December 1. Three months before that date, M says, he
will be unable to deliver on December 1.

8. Remedies
9. Monetary damages
10. Purpose is to place injured party in as good a position as s/he would have occupied if contract had
been performed
11. Actual or compensatory damages are equal to amount caused by breach
(l) This is the most common remedy under contract law
(2) Damages must be foreseeable to be recoverable
12. Punitive damages are generally not allowed in contract law
13. Liquidated damage clause is a provision agreed to in a contract to set the amount of damages in
advance if a breach occurs
(1) These are used instead of awarding actual compensatory damages
(2) Not enforceable if punitive; therefore, amount set in advance must be reasonably based on
what actual damages are expected to be _
(3) For sales of goods, if contract has no provision for liquidated damages, seller may retain de-
posit of up to $500 when buyer defaults
e. 'Party injured by breach must use reasonable care to minimize loss because s/he cannot recover
costs that could have been avoided-called mitigation of damages
EXAMPLE: One who receives perishables which are not the goods bargainedfor must take reasonable steps to
prevent loss from spoilage.
EXAMPLE: X contracts to fix Y's car, After X begins work, Y breaches and says "Stop," X cannot continue to
work and incur more costs (i.e; put in more parts and labor).
14. Rescission-cancellation of contract whereby parties are placed in position they were in before con-
tract was formed '
15. Specific performance-compels performance promised
16. Used when money damages will not suffice (e.g., when subject matter is unique, or rare, as in
contract for sale of land)
17. Injured party may seek compensatory damages if s/he reasonably chooses them
18. Not available to compel personal services
19. Restitution-return of consideration to injured party
20. Injunction-compels an act or restrains an act
21. Release-one party relieves other party of part of obligations in contract
22. Waiver-one party voluntarily gives up some right in contract either by express agreement or by con- .
sistently not enforcing such right in past
23. Arbitration=-resolutionof dispute, outside of judicial system, agreed to by disputing parties
24. Refonnation-if parties have failed to express true intentions in contract, court may reform it to ex-
press true intentions of contract
25. Under modern rule, when a party breaks off an engagement, the engagement ring must be given back
to the donor no matter which party breaks off engagement
a, Based on modern objective no-fault rule
26. Statute of Limitations
27. Bars suit if not brought within statutory period
28. Statute begins to run from time cause of action accrues (e.g., breach)
29. Running of statute may be stopped when defendant is absent from jurisdiction
30. Jurisdiction over Defendant for Online Transactions
31. Courts generally grant plaintiffs personal jurisdiction over defendants in foreign state if plaintiff inten-
tionally engaged in commercial activities for use outside of home state