Damages for Breach of Contract - Assignment Example

"Multiple Choice questions " and Section # of "Multiple Choice Questions " Answers:1) 'Damages for breach of contract typically serve to protect one of three interests of a claimant: (1) performance interest (also known as expectation interest); (2) reliance interest; or (3) restitution interest. The primary goal of damages in most jurisdictions is to fulfil a claimant's performance interest by giving the claimant the substitute remedy of the "benefit of the bargain" monetarily. This typically includes compensation for actual loss incurred as a result of the breach and for net gains, including lost profits, that the claimant was precluded from because of the respondent's actions. All legal systems place limitations on damage awards. The most common limitations are causation, foresee ability, certainty, fault, and avoid ability. In order to obtain damages, there must be a causal connection between the respondent's breach and the claimant's loss. In addition, the claimant must show that the loss was foreseeable or not too remote. Further, the claimant is required to show with reasonable certainty the amount of the damage. Many civil law countries also require, as a prerequisite to an award of damages for breach of contract, that the respondent be at fault in breaching the agreement. Damages may also be limited by the doctrine of avoidability, which provides that damages which could have been avoided without undue risk, burden, or humiliation are not recoverable'. (John, 2006) 2) 'The Uniform Commercial Code is the dominant source of American commercial law. All 50 States have enacted all or most of the UCC. It is written and maintained under the auspices of NCCUSL and ALI, rather than by a government body. The private, non-partisan drafting and review process for updating or rewriting a Uniform Law (such as the UCC) stretches over several years. Hearings are open. Competing viewpoints can be heard and considered calmly'. (Cem, 1996) '(44) "Goods" means all things that are movable when a security interest attaches. The term includes (i) fixtures, (ii) standing timber that is to be cut and removed under a conveyance or contract for sale, (iii) the unborn young of animals, (iv) crops grown, growing, or to be grown, even if the crops are produced on trees, vines, or bushes, and (v) manufactured homes. The term also includes a computer program embedded in goods and any supporting information provided in connection with a transaction relating to the program if (i) the program is associated with the goods in such a manner that it customarily is considered part of the goods, or (ii) by becoming the owner of the goods, a person acquires a right to use the program in connection with the goods. The term does not include a computer program embedded in goods that consist solely of the medium in which the program is embedded. The term also does not include accounts, chattel paper, commercial tort claims, deposit accounts, documents, general intangibles, instruments, investment property, letter-of-credit rights, letters of credit, money, or oil, gas, or other minerals before extraction. "The term (goods) does not include a computer program embedded in goods that consist solely of the medium in which the program is embedded." Please also notice also in the excerpt above that what is excluded is "SW shipped as SW itself", so the electronic distribution of patches and the like are not Goods... likewise putting an application on a Disk, CD, or DVD doesn't classify that SW as a "Goods item" although the physical media it comes on would be. And while the listing of 'other General Intangibles (outside of those specified as 'embedded programs' or as defined in the 'part of the package' definition) are excluded, SW as defined in the two key cases is. "The term also does not include accounts, chattel paper, commercial tort claims, deposit accounts, documents, general intangibles, instruments, investment property, letter-of-credit rights, letters of credit, money, or oil, gas, or other minerals before extraction'.( Todd , May 16, 2007) 3. ' Limited legal accountability for defective products. The implied warranty of merchantability is essentially gone, the rules governing express warranties are relaxed, and making it easier to claim that no warranty was formed by demonstration, there is no longer a concept of a customer's right to a "minimum adequate remedy." The perfect tender right is repealed for most business software customers, including small businesses who buy software through non-negotiable contracts,UCITA redefines "material breach" in a seller-protective way, The publisher can easily set up a waiver of liability (you "agree" to not sue the publisher for defects that you have complained about) by including the waiver in the click-wrapped "license" that comes with a bug-fix upgrade that the publisher sends you., Publishers can escape repaying incidental expenses (such as reimbursing customers for the costs of returning a defective product), even in the event of complaints about unrevealed but known defects. In the event of failure of an agreed exclusive remedy, the customer can no longer collect incidental or consequential damages; the publisher is under no duty take reasonable measures in an attempt to release the product without viruses. The publisher can select the law of any state or country. The publisher can choose the forum, making it difficult and expensive to bring an action' (Cem, 1999/2000). 4. Yes, Digitallis has basis against Hapless Computers. 'If one party to a contract wishes to complain that the other has failed to perform or has mis performed, he can assert that the non-performing or misperforming party has committed a breach of the contract. If an aggrieved party prevails on a claim for breach of contract, his remedies are limited ordinarily to monetary damages, which are to say, money recompense. The ordinary measure of monetary damages is such amount of money as is necessary to place the aggrieved party in the position in which he would have been, had the offending party timely performed the contract in proper manner. Ordinarily, direct damages and incidental damages serve to give the aggrieved party the benefit of his bargain, placing him in the position that he would have enjoyed had the offending party performed rather than breached the contract. Most but not all commercial contracts also award attorney's fees to the prevailing party, meaning that the aggrieved party, if he brings suit for breach or misperformance of the contract, can recover his attorney's fees, but only on condition that he prevail in the suit; but if he loses the suit, the other party, having been found not to have committed any breach or misperformance, is entitled to recovery of attorney's fees incurred to prove his innocence in the matter. Under certain circumstances, an aggrieved party can avoid a contract that he previously agreed to make. This is known as rescission or avoidance of the contract. By this relief, the parties are to be placed in the position in which they found themselves before the contract was made. Rescission is always available to those who have been defrauded by false representations into agreeing to unfair contracts (this point is discussed further below). Rescission is also available to relieve aggrieved parties from unconscionable contracts - typically, deceitful contracts on pre-printed forms with hidden, "surprising" terms that are utterly unfair and one-sided to the point of being oppressive'.( William , 2002 ) 5. 'Seller's remedies for a buyer's breach of a sales contract : Right to withhold delivery ,Right to stop delivery of goods in transit ,Right to reclaim goods ,Right to dispose of goods ,Right to recover the purchase price or rent ,Right to recover damages for breach of contract ,Right to cancel the contract . Limitation on remedies, Remedies may be limited by the running of the UCC Statute of Limitation which states that an action for breach of any written or oral sales or lease contract must commence within four years after the cause of action accrues. The parties may agree to reduce the limitation period to one year. The parties may also agree on remedies in addition to or in substitution for the remedies provided by the UCC'. (Chapter 21. Remedies for Breach of Sales and Lease Contracts). 6. 'Today, this struggle is perhaps best embodied in Article 2B of the Uniform Commercial Code, a state law currently under development that seeks to define the legal ground rules for transactions in information. This proposed law is occasionaly mentioned in the press when someone discusses "shrink-wrap licenses(1)." Article 2B represents a movement toward licensing of information in its many forms and away from the sale of copies of works as traditionally understood under copyright law. The legal distinctions involved with this shift are subtle on the surface, but have significant consequences for the way we access, use, and exchange information. Today, the push toward the licensing of information is a multi-prong effort. On one front, information publishers are trying to get users accustomed to licenses. Consumers are seeing license agreements on everything "digital" from software packaging to online magazines (even though the print version never involved a license agreement) to web sites. Librarians are spinning with the increasingly complex issues involved with negotiating multi-user access to online databases, establishing centralized use of CD-ROMs, and resisting the still occasional but startling arrival of printed materials wrapped with license agreements. Today when judges decide disputes involving licensing transactions (such as publishing contracts, database access contracts, and contracts for motion picture rights) they base their decisions upon applicable case law precedents. If Article 2B is adopted by the states, then judges would look to the statute for initial direction on how to decide similar disputes'.( Laurel , Nov, 1998). 7. NO, the grandson cannot hold his granddad in court on any basis. Reason being 'Promise - an assurance or undertaking, however expressed, that something will or will not be done in the future. Promises are enforceable by law called contracts. Rule/Issue: A moral obligation does not constitute as sufficient consideration to make a promise enforceable. Rationale: A moral obligation is not enough for consideration. The law will only give promise validity if the promisor gains something, or the promisee loses something, by the promise. Promise for Promise: Introduction: Mutual promises are exchanged. The test is whether the performance promised would be a sufficient consideration. A bargain must have mutuality of obligation; both parties must be bound or neither will be. Sometimes there is no proof of a promise cause transactional cost are expensive. Questions to ask then are: Why can you not reneg How are return promises binding Dont we all change our minds True, but we want people to rely- greater utility is required and it is good for commerce. All these cases deal with are you getting a solid promise Because if promise is illusory, you have not gotten anything for it. If illusory, no mutuality of obligation. Illusory promise: If promisor reverse expressly or by implication an alternative by which she can escape performance altogether, she has really not promised anything at all. Thus, no mutuality, no consideration.'(Phillips, 1997). 8. Vincent May not win. the rationale being :'A contract is formed by a meeting of the minds of at least two parties, a mutual assent resulting from the expression of an offer by one and an acceptance of precisely that offer by the other. The offer has no effect if the other person does not accept it. A mere discussion of the offer does not constitute acceptance. Negotiation often leads people to believe that they can expect other people to commit themselves to certain things, but until there has been an actual offer and a clear acceptance, there has not been the necessary "meeting of minds" to form a contract. Many disputes arise because one party claims that a contract was made, while the other party says that the process was still in the offer and counteroffer stage. This is a particular danger when a contract is oral (spoken) rather than written...a good argument for putting agreements in writing even if it is not legally necessary. You must analyze whether people are merely discussing what they may later promise to do, or may do in the future, or whether they have agreed on specific mutual obligations. Conversations full of words and phrases like "if" and "would you be willing" and "I would consider" are almost certainly negotiation. To avoid problems: (1) Be sure that both parties fully understand the content of the agreement (there is a meeting of minds), and (2) Be sure that the acceptance makes no change in the offer A little thought shows that an offer may be accepted either by a promise or by action. Where the terms of an offer permit, the contract is created by a promise in exchange for the offeror's problem. It is called a bilateral contract, and both parties are bound as soon as the mutual promises are exchanged. For example, if A says "I'll sell you my car for $400." B can accept by promising, "Okay, I'll buy your car for $400." The contract for sale is immediately formed, and both parties are bound to perform as mutually promised. Notice that in the example just given, nobody mentioned when the actual exchange of car and money would take place. If, having exchanged a promise for a promise, the buyer for days keeps putting off producing the money, the seller (regretting that it didn't occur to him to put a time limit on the transaction) will at some point become justified in deciding that the buyer has broken the agreement and that he (the seller) can sell the car to someone else. If the disappointed buyer sues the seller, the courts will probably solve the problem with two of their favorite words: "reasonable" and "imply". The courts will most likely say that because there was no mention of time, that a "reasonable" time was implied by the contract, and that the seller was justified in selling the car to someone else after a week. In other situations a judge might say that failure to mention time omitted an essential term from a contract, and that the contract lacks specificity to the point that it is unenforceable, meaning that the disappointed party just has to lump it'.( The 'Lectric Law Library). 9. Jack can possibly win the case. The rationale being: 'As there was a written agreement between the two parties. And it was specified that jack would be allowed inspection. And if upon inspection, there were to be minor changes, due to the prevailing contract there was no harm in Jack being considerate. People can contract for almost anything, and do, but the State will not enforce contracts which require illegal or immoral conduct. Criminals make such deals with one another, but they have to enforce them themselves. The courts generally declare illegal or immoral contracts void. Be sure that you do not rely on a contract which a court may find requires the violation of some ordinance, or which may be called "against public policy", the latter being a vague term which courts use to express disapproval when they cannot come up with something more specific. There are borderline cases. Where injustice, will be done to an innocent party (say a party who is justifiably ignorant that the other party is doing something illegal under the contract), the courts will sometimes make exceptions so that the innocent party can recover damages from the more culpable party'. (The 'Lectric Law Library). 10. Bohdan can win the case:' Rationale being: A judge may find a contract unenforceable if its terms (the specification of what the parties must do) are too vague. What may appear clearly to express the intentions of the parties at the time they write a contract may seem totally unclear on later analysis. Another common problem is that subsequent events may reveal that important provisions covering fairly foreseeable potential problems were not included in the agreement, leaving the parties at sea without sails or tiller. Typically, for example, people who are enthusiastic about a new transaction or cooperative venture of some kind, and filled with feelings of optimisms and good fellowship, do not even want to think about the possibility that something could go wrong, much less that the participants could end up suing one another. A contract should always contain provisions for dealing with obstacles, failures, and even betrayals, no matter how farfetched such things may seem at the time. Here is an important principle to remember: The courts will construe an ambiguous provision in a contract against the person who wrote it. So, if you are responsible for offering a part of a contract which is worded unclearly and which could as easily be interpreted against as for your interests, the court will choose the interpretation that goes against you rather than penalizing the other party for your ambiguity'. ('Lectric Law Library's stacks'). 11. 'Counter offers. Often when an offer is made, the response will not be to accept the terms of the offer right off, but to start bargaining. Of course, haggling over price is the most common type of negotiating that occurs in business situations. When one party responds to an offer by proposing something different, this proposal is called a "counteroffer." When a counteroffer is made, the legal responsibility to accept, decline or make another counteroffer shifts to the original offeror'. (Nolo .com, Law for all). 12. 'Normally EDI is fairly narrowly defined as "the electronic interchange of machine processable structured data, which has been formatted according to agreed standards and which can be transmitted directly between different computer systems with the aid of telecommunication interfaces". Electronic commerce on the other hand is a wider all inclusive term which may be used to describe EDI, internet communications, e-mail and even fax. For the purpose of this article electronic commerce is used in this wide sense. Where reference is made to electronic commerce, unless a specific application is mentioned, it will also include EDI, e-mail, fax and telex, but exclude telephone.' (Siegfried Eiselen, February 28, 2001). 'The "mailbox rule" for ordinary mail, wherein acceptance is deemed to be communicated to the offeree when it enters the postal system. This rule has been extended to telegrams and even couriers. The offeror, however, is free to put conditions on the communication of the acceptance (e.g., offer must be received; must be by telephone). In contrast to the "mailbox rule", acceptances communicated using instantaneous or virtually instantaneous means, such as the telephone, telex, and fax, are formed when the offeror receives the acceptance. These means are analogous to face-to-face communications; presumably both parties will be aware of any break in the connection and be able to take corrective action'. (Varun). 13. Between Oscar and Betty, as the contract had been clearly made, when Betty was forced off from work that was then illegal. The contract terms and conditions should have included this clause, and condition, that she maybe asked to terminate her work as and when ordered. Betty can hold Oscar, in the court of law, for breach of contract also she can claim that Oscar did not properly make the contract. All Clauses should have been included there in the contract law. 14. 'A lay witness is a person who was at the scene of the incident that gave rise to the case, and therefore provide the case-specific facts for the fact finder. Lay witnesses are limited to testimony that can be derived from their senses. An expert witness is a person that interprets facts or hypothetical to derive an opinion about some aspect of the case. Expert witnesses lack direct contact with the scene of a crime or tort. Instead, they are given a set of facts and are asked to interpret it. Expert witnesses are only needed when a fact finder would be greatly assisted by an expert to interpret complex facts. Expert witnesses may give opinion about a given set of facts, but are limited to the scope of their expertise. Experts are allowed more leeway in the opinions that they can give during testimony. Unlike a lay witness, the expert can give an opinion as to what he thinks of the ultimate conclusion of the case. The scope of an expert's opinion is limited by what he is an expert in. Therefore an expert witness will not be allowed to give their opinion as to a legal conclusion unless they are qualified to make that judgment.' ( Section 13: Expert and Lay Witness Testimony) References 1. John .Y.Gotanda (2006), "Damages in Lieu of Performance because of Breach of Contract", Villanova University School of Law, School of Law Working Paper Series. 2. Cem Kaner (1996), Uniform Commercial Code Article 2B: A New Law of Software Quality, Software QA, Volume 3, #2, 1996, p. 10 3. TS Glassey (May 16, 2007), "Software as Goods... - UCC Article 9, def #44" http://www.law.cornell.edu/ucc/9/article9.htm. 4. Cem Kaner, J.D., Ph.D, (1999/2000), SOFTWARE ENGINEERING AND UCITA, Journal of computer and information Law Vol 8 #2 5. William A. Markham, (2002), An Overview of Contract Law, http://www.maldonadomarkham.com/Contract-lawyer-San-Diego.htm. 6. Chapter 21. Remedies for Breach of Sales and Lease Contracts, http://myphliputil.pearsoncmg.com/student/bp_cheeseman_blaw_5/lec_21.html. 7. Laurel Jamtgaard , (Nov, 1998), Licenses and information wares: an update on UCC Article 2B - Uniform Commercial Code, http://findarticles.com/p/articles/mi_m0FWE. 8. Phillips, (1997), CONTRACTS, Basis for Enforcing Promises, Definitions http://adam.rosi-kessel.org/law/outlines/Phillips%20Contracts%20Winter%201997.rtf. 9. Lectric Law library stacks, About contracts , http://www.lectlaw.com/files/bul02.htm. 10. Lectric Law library stacks, About contracts ,http://www.lectlaw.com/files/bul02.htm. 11. Nolo.com, Law for all, (June 08, 2004 ) Simple and enforceable contracts http://64.112.238.199/qa/index.cfma=va&i=30. 12. Siegfried EiselenPace, Law School Institute of International Commercial Law, Last updated February 28, 2001, Electronic commerce and the UN Convention on Contracts for the International Sale of Goods (CISG) 1980. Varun Shivhare, electronic Contract, II Year, National Law Institute University (NLIU), Bhopal, http://www.legalservicesindia.com/articles/econt.htm. 13. Section 13: Expert and Lay Witness Testimony, http://www.case.edu/orgs/undergradmocktrial/notebook/section_13.doc. Author (year) Title. Retrieved April 8, 1997, from web title Web site: www.yahoo.com Read More