Remedies for Breach of Contract (???????)

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Remedies for Breach of Contract(???????)
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Remedies for breach of contract under the CISG

• The remedies outlined in the CISG include
• (1) avoidance of the contracts,
• (2) sellers right to remedy or cure,
• (3) sellers additional time to perform,
• (4) price reduction,
• (5) money damages,
• (6) specific performance.

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Money damages

• Under the common law
• (1) Money damages make the injured party be
  placed in the position they would have occupied
  if the contract had been fully performed.
• (2) Types of damages ( T or F statements)
• A. Consequential damages are to make the injured
  party whole and these damages compensate the
  injured party only for injuries actually
  sustained.

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• B. When a seller does not deliver goods, knowing
  that a buyer is planning to resell those goods
  immediately, compensatory damages are awarded
  for the loss of profits from the planned resale.
• C. Consequential damages differ from compensatory
  damages in that they are caused by special
  circumstances beyond the contract itself.
• D. If a nonbreaching party wants to recover
  consequential damages, the breaching party does
  not need to know the special circumstances will
  cause the nonbreaching party to suffer an
  additional loss.

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• E. When an innocent party suffers some financial
  loss, nominal damages can be awarded.
• F. Nominal damages are often small, such as a
  dollar, but they do establish the fact that the
  defendant acted wrongfully.
• G. Exemplary damages are designed to punish a
  guilty party where an intentional tort may be
  tied to a breach of contract.

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• Money damages under the CISG (Art. 74----77)
• What damages does the CISG recognize?
• The CISG provides that a breaching party
  shall be liable for damages in an amount
  sufficient to make the injured party whole in the
  event of a breach.
• Article 74 states that damages to an injured
  party shall consist of a sum equal to the loss.
  
• Thus, under the CISG, both the compensatory
  damages and consequential damages can be awarded.

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• (2) How to measure money damages?
• A. The method of measuring damages depends on
• ----whether the buyer has been able to purchase
  substitute goods from another supplier.
• If the seller fails to perform and the buyer does
  purchase substitute goods ,
• damages the substitute goods pricethe contract
  price

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• b.If the buyer has not purchased substitute
  goods,
• damages the current market price the
  contract price
• B. As under the UCC, damages under the CISG may
  also include an amount for lost profits and other
  consequential damages arising as a reasonable
  foreseeable consequence of the breach.
• Art.74 sets limits for the consequential
  damages, which are those that the parties
  foresaw or ought to have foreseen at the time of
  the conclusion of the contract.

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Case analysis Delchi Carrier Spa v. Rotorex
Corporation

• (1) background and facts
• (an Italian Com.) (a N.Y. corp.)
• Delchi
  Rotorex
• (buyer) air compressor (seller)
•  
• (for use in producing Ariele air
  conditioners)

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• 2. Legal issue
• (1) whether Roterex breached the contract
• (2) what damages Delchi should recover
• 3. Legal principle
• The CISG is the governing law of this case (Art.
  74, 77 of the CISG).

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• 4. Decision
• (1) the decision of the district court
• The defendant breached the contract the
  plaintiff was awarded compensatory damages and
  those incidental and consequential damages were
  denied.
• (2) the decision of the circuit court
• The circuit court agreed the district court
  decision regarding breach of contract and the
  district courts award of damages for lost
  profits, but disagreed with the denial of
  incidental and consequential damages.

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