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## George Mason School of Law

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**George Mason School of Law**Contracts II Reliance/Restitution/Punitives F.H. Buckley fbuckley@gmu.edu**The measure of damages**• If damages are meant to compensate the innocent party for the wrong done him, what is the wrong when the other party breaches? • Failure to perform: Expectation damages • Inviting detrimental reliance: reliance damages**The measure of damages**• When would the Π prefer reliance damages?**The measure of damages**• When would the Π prefer reliance damages? • Whenever these exceed the expectation award**The measure of damages**• When would the Π prefer reliance damages? • Whenever these exceed the expectation award • Limits on expectation damages • Uncertainty • Foreseeability • Or bad bargains?**The measure of damages**• When would the Π prefer reliance damages? • Whenever these exceed the expectation award • Should the Π have the option in such cases?**Freund**• What are the three kinds of damages that are considered? • The Expectation Interest • The Reliance Interest • Semble not to exceed the expectation interest, or else a windfall**The measure of damages**• When should the Π be limited to reliance damages?**The measure of damages**• When should the Π be limited to reliance damages? • Contracts with Physicians • Hawkins v. McGee**The measure of damages**• When should the Π be limited to reliance damages? • Contracts with Physicians • Hawkins v. McGee**The measure of damages**• When should the Π be limited to reliance damages? • Contracts with Physicians • Why a different result in Sullivan v. O’Connor?**The measure of damages**• When should the Π be limited to reliance damages? • Contracts with Physicians • Hawkins v. McGee • Why a different result in Sullivan v. O’Connor? • What would the two measures give? • What difference in pain and suffering claims?**The measure of damages**• When should the Π be limited to reliance damages? • Contracts with Physicians • Hawkins v. McGee • Why a different result in Sullivan v. O’Connor? • What would the two measures give? • What difference in pain and suffering claims? • Is this available in commercial cases?**The measure of damages**• When should the Π be limited to reliance damages? • Contracts with Physicians • Hawkins v. McGee • Why a different result in Sullivan v. O’Connor? • What would the two measures give? • What would restitution give?**The measure of damages**• Kizas v. Webster Robert Stack as Eliot Ness**The measure of damages**• Kizas v. Webster • The FBI attracted college graduate to work as clerical staff because of the possibility of receiving preferential consideration as special agents • The FBI stopped the program in 1977 because (1) they weren’t getting qualified people, and (2) the FBI wanted to institute an affirmative action program.**The measure of damages**• Kizas v. Webster • So what do you think of the takings argument?**The measure of damages**• Kizas v. Webster • So what do you think of the takings argument? • Reversed on appeal**The measure of damages**• Kizas v. Webster • So what do you think of the takings argument? • If it would succeed, what kind of damages?**The measure of damages**• Kizas v. Webster • So what do you think of the takings argument? • If it would succeed, what kind of damages? • What are the problems with expectation damages?**The measure of damages**• Kizas v. Webster • So what do you think of the takings argument? • If it would succeed, what kind of damages? • What are the problems with expectation damages? • Uncertainty • FBI’s right to terminate**The measure of damages**• Kizas v. Webster • So what do you think of the takings argument? • If it would succeed, what kind of damages? • Do expectation damages place a ceiling on reliance damages?**The measure of damages**• Kizas v. Webster • So what do you think of the takings argument? • If it would succeed, what kind of damages? • Do expectation damages place a ceiling on reliance damages? • Yes—but no proof that a bad bargain.**The measure of damages**• Kizas v. Webster • So what do you think of the takings argument? • If it would succeed, what kind of damages? • Do expectation damages place a ceiling on reliance damages? • So what they get is the difference between what they received as FBI employees (and for a year afterwards) and what they would have received in the labor market, plus dislocation**Anglia v. Reed 902**Robert Reed, The Brady Bunch**Anglia v. Reed**• What was the problem with expectation damages?**Anglia v. Reed**• What was the problem with expectation damages? • If expectation damages are speculative, could any reliance damages be awarded?**Anglia v. Reed**• What was the problem with expectation damages? • If expectation damages are speculative, could any reliance damages be awarded? • Both pre- and post-contract reliance damages awarded**Restitution**• The forms of action: • Trespass • Action on the case • Negligence • Assumpsit • Quasi Contract • Money had and received**Restitution or Unjust Enrichment**• A general principle of restitution out of Quasi Contract, Money had and received, breach of fiduciary duty • Based on Δ’s unjust retention of a benefit as against Π, and not on Π’s reliance losses.**Restitution**• Suppose that, without asking you permission, I put orange aluminum siding on your house. Can I recover the cost of doing do from you?**Restitution**• Bailey v. West p. 5 • What should the Πs have done with the horse?**Restitution**• Bailey v. West p. 5 • What should the Πs have done with the horse? • Restitutionary remedies are available in spite or the absence of consent—but not if the Π is an officious intermeddler**Restitution**• Bailey v. West p. 5 • What should the Πs have done with the horse? • Restitutionary remedies are available in spite or the absence of consent—but not if the Π is an officious intermeddler • If not, see Leebow at p. 911**Restitution**• Bailey v. West p. 5 • What should the Πs have done with the horse? • Restitutionary remedies are available in spite or the absence of consent—but not if the Π is an officious intermeddler • But that problem doesn’t arise when restitution is sought as a remedy in contract**George Mason School of Law**Contracts II Reliance/Restitution/Punitives F.H. Buckley fbuckley@gmu.edu 36**Zara Contracting**Tri-cities Airport, Endicott NY**Zara Contracting**• Zara contracts with US gov’t to build an airport • Zara subcontracts the entire job to Π • Two months after Π begins work, Zara wrongfully fires it and finishes the job itself.**Zara Contracting**• Two months after Π begins work, Zara wrongfully fires it and finishes the job itself. • What can Π recover? • Value of work done at contract rate?**Zara Contracting**• Two months after Π begins work, Zara wrongfully fires it and finishes the job itself. • What can Π recover? • Value of work done at contract rate? • Quantum meruitfor value of work done (more than contract rate as the work was harder than expected)?**Zara Contracting**• Two months after Π begins work, Zara wrongfully fires it and finishes the job itself. • What can Π recover? • Value of work done at contract rate? • Quantum meruit for value of work done (more than contract rate as the work was harder than expected)? • What was the benefit unjustly retained by Zara?**Zara Contracting**• Two months after Π begins work, Zara wrongfully fires it and finishes the job itself. • Quantum meruit for value of work done (more than contract rate as the work was harder than expected)? • Contrast Palmer Construction at 909 • Qu. Breachers vs. non-breachers**Zara Contracting**• Two months after Π begins work, Zara wrongfully fires it and finishes the job itself. • Quantum meruit for value of work done (more than contract rate as the work was harder than expected)? • Contrast Palmer Construction at 909 • Qu. Breachers vs. non-breachers • Britton v. Turner?**Ventura v. Titan 910**Gov. Jesse Ventura (Ind. MN)**Ventura v. Titan**• If Ventura had bargained for $X in royalties, could he recover more than this in quantum meruit?**Ventura v. Titan**• If Ventura had bargained for $X in royalties, could he recover more than this in quantum meruit? • Is this consistent with Zara?**Can restitution damages exceed expectation damages?**• Britton v. Turner 906 • What would expectation damages amount to?**Can restitution damages exceed expectation damages?**• Britton v. Turner • What would expectation damages amount to? • Unlike Zara, Π is in breach here**Can restitution damages exceed expectation damages?**• Britton v. Turner • What would quantum meruit give the Π?**Can restitution damages exceed expectation damages?**• Britton v. Turner • What would quantum meruit give the Π? • Aliter a temptation to strategic behavior by the employer?