Drama of the Law: Free Speech: Constitutional Issues

Drama of the Law: Breaches and Remedies

Breaches and Remedies Building for a Better Tomorrow

Answer Guide for Discussion Questions

Is an emergency a sufficient reason to breach a contract?

While a real emergency may be a moral reason to breach a contract, it is not a legal reason—unless, of course, the emergency makes performance of the contractual obligation impossible.

Spud explains that he can work for a month on another job. Is this a legally sufficient reason to breach a contract?

Now, Spud is giving a monetary REASON FOR BREACH—if he breaches the contract, he can be made better off. A better job offer, however, does not form a legally sufficient reason to breach a contract. Spud will breach his contract with Oscar if he fails to perform the work on these grounds.

Oscar asks for his money back, plus the money that he's going to lose. What are the legal implications behind this request?

Oscar is adding up the money damages he is claiming. As COMPENSATORY DAMAGES, he wants the money he paid Spud in advance, the price of the ads, and any other expenses directly resulting from Spud's breach. As CONSEQUENTIAL DAMAGES, he wants the lost profits that will result from the breach. The consequential damages may be overstated by Oscar, however. Lost profits are by nature speculative, and there is always a possibility that not all of the goods would have been sold during the advertised sale. Therefore, a court of law might not agree with Oscar's calculations.

Oscar is clearly going to have to pay Vinny more to finish the job that he had contracted to pay Spud. Who is liable for the difference between what it will actually cost Oscar to get the job finished and the amount that Spud had been paid to complete the task?

Spud is liable for the difference between the payment that Oscar must make to Vinny to get the job done and the payment designated in the Oscar-Spud contract for the same work. By hiring Vinny to complete the job, Oscar has mitigated his damages. If Vinny had not agreed to complete the display shelving and Oscar could find no other person to do the work, Spud would also be liable for the compensatory and consequential damages.