Q & A Remedies 251 - 300

251. Why is specific performance granted for executory land sale contracts?

The key element for granting specific performance is the unique nature of land which makes remedies at law inadequate.

252. Will a liquidated damages clause in an executory land sale contract preclude specific performance as a remedy?

A decree of specific performance will still lie even for a contract with a liquidated damage clause. The clause will only apply to the remedy of damages and does not compensate for the uniqueness of the land.

253. Besides getting a decree for specific performance, a buyer in an executory land sale contract may recover for damages incident to a delay in the seller's performance. What is the measure of this recovery? Is it governed by Hadley v Baxendale?

The recovery for delay is not governed by Hadley v Baxendale. It is not a damages remedy per se, but it is an accounting between parties to balance the scales of equity.

254. What is specific performance with abatement?

In an executory land sale contract whereby the seller is unable to perform because of a defect in title, the quantity of the land, or the quality of the land, the buyer may insist on specific performance and an abatement of the purchase price to reflect the nature and value of the defect.

255. How is abatement accomplished when there is a defect in the quantity of the land conveyed?

Usually, a pro-rata reduction in the purchase is given in abatement to the buyer.

256. What is the main problem in giving abatement when there is a defect in the quality of the title conveyed?

The problem in abatement with a defect in quality is the issue of value. If the value of the defect can be determined with reasonable certainty, there is no problem. If the defect is uncertain and difficult to value, some courts refuse to grant abatement.

257. What is the basic limitation on specific performance with abatement?

Specific performance with abatement must not act inequitably. There must be no undue hardship to the seller.

258. In lieu of seeking specific performance or damages for an executory land sale contract, what else may a buyer do?

Depending on the materiality of the breach, the buyer may elect to rescind the contract and seek restitution of the benefits conferred on the seller.

259. What remedies are available for a seller in default of an executory land sale contract?

The seller may be granted specific performance with an abatement in price if the default is immaterial. If the default is material, specific performance will not be granted.

260. Are the remedies available to the seller for a buyer's breach of an executory land sale contract dependent on the type of contract involved?

Yes. The remedies are dependent on whether the agreement is a buy-sell contract or an installment land sale contract.

261. What remedies are available for the buyer's breach of a buy-sell contract for the sale of land?

Damages plus consequential damages.

Specific performance.

Rescission and restitution.

262. What are the seller's remedies for a buyer's breach of an installment land sale contract?

Damages.

Foreclosure of the vendor's lien.

Strict foreclosure.

Quiet title.

Rescission and restitution.

Ejectment.

263. What remedies are available for a buyer's breach after conveyance of title in a land sale contract?

Damages.

Foreclosure of grantor's lien.

Specific performance.

Quasi-contract.

264. Why is restitution not an available remedy for a grantor when a buyer breaches after conveyance of title in a land sale contract?

Historically, the right to restitution is not available where the injured party has fully performed and is entitled to a liquidated sum of money.

265. What remedies are available to a buyer in default of a land sale contract?

Restitution is available under the modern trend of authority, but not under traditional views. Specific performance is available under a minority view.

266. When specific performance is granted to a buyer in default of a land sale contract, what must the buyer show before the decree is given?

Specific performance will be granted if the buyer pays the full purchase price owed and shows that he has not been guilty of unclean hands or laches.

267. What are a buyer's remedies for nondelivery?

Damages.

Cover.

Replevin.

Specific performance.

Rescission.

268. What is the measure of damages for a seller's nondelivery of goods?

The buyer may recover the difference between the market price at the time the buyer learned of the breach and the contract price, incidental damages, and consequential damages, less expenses saved by the breach. See UCC 2-711 and 2-713.

269. How is market price determined under the UCC?

Market price is determined as of the place of tender, and at the time the buyer learned of the breach. See UCC 2-713

270. What is the basic limitation for recovery of damages for a seller's breach of contract under the UCC?

Lost profits must be a foreseeable result of the breach, and consequential damages are not recoverable if they could have been avoided by cover. See UCC 2-715.

271. What is cover?

Cover is an alternative remedy to damages. Cover requires the buyer to make a substitute purchase of the goods in a reasonable fashion and without undue delay.

272. If a buyer covers, what is the measure of recovery against the seller?

The buyer may recover the difference between the cost of cover and the contract price, and incidental or consequential damages. Cover is the replacement cost of the items that seller has breached in his contract with the buyer. See UCC 2-712.

273. How are consequential damages measured under the UCC when the buyer has covered?

Hadley v Baxendale is the limitation. Damages that were in the contemplation of the parties at the time of contracting will be recovered. See UCC 2-715(2)(a).

274. When is replevin available under the UCC?

Replevin is available when goods have been identified to the contract, and when cover cannot be effected. See UCC 2-716(3).

275. What is the position of the UCC on specific performance?

The goods must be unique, or there must be other proper circumstances. See UCC 2-716(1).

276. What is the definition of 'other proper circumstances'?

Specific performance may be decreed where goods are not unique if damages are difficult to estimate.

277. What is meant by the term 'unique' under the UCC?

The definition includes common chattels that cannot be replaced in the market due to a scarcity.

278. What are a buyer's remedies against a seller for a delay in delivery for the sale of goods?

A material delay in delivery may result in a breach of contract, and the buyer is excused from further performance. If the delay is immaterial, the buyer is entitled to damages for the delay. However, Hadley v Baxendale restricts the damages for delay.

279. What are a buyer's remedies for a seller's delivery of nonconforming goods?

Breach of warranty.

Revocation of acceptance.

280. Under breach of warranty, can the buyer accept the goods and still sue for breach of warranty?

Yes. See UCC 2-714. The measure of damages is the difference at the time and place of acceptance between the value of the goods accepted and the value they would have been had they been as warranted. Incidental and consequential damages may be recovered if proven.

281. How is the 'value as warranted' defined?

Fair market value is the measure of the value as warranted. In the majority of cases, fair market value and contract price will be the same. The buyer has the option of proving a different value.

282. What are the incidental damages for breach of warranty?

Incidental damages are expenses of inspection and receipt, transportation, care, and custody. See UCC 2-715(b).

283. What is the effect of a limitation of liability for breach of warranty?

These limitations are subject to the review of UCC 2-302 as to unconscionability.

284. What is revocation of acceptance under the UCC?

When a buyer receives nonconforming goods, he may reject the goods when tendered or revoke acceptance after delivery.

285. When must a buyer revoke goods after acceptance?

A revocation of goods after acceptance must be done promptly after discovery of the defect. Notification to the seller is sufficient. See UCC 2-608.

286. What are a buyer's remedies after a revocation of acceptance of goods?

Recovery of the price paid and damages for nondelivery with a security interest in the rejected goods in the buyer's possession. The buyer is permitted to resell goods in possession to recover losses. The surplus must be paid to the seller. See UCC 2-711 and 2-706.

287. Does the use of the chattels by the buyer negate the use of revocation of acceptance?

Use of the goods by the buyer will not negate the use of revocation of acceptance if such use was reasonable and minimized economic waste. The seller may be entitled to a setoff in damages owed to the buyer by the buyer's use.

288. What are the remedies for a buyer in default under the UCC?

If a liquidated damages clause is present, the buyer is entitled to any amount over reasonable liquidated damages paid. If there is no liquidated damages clause, the seller can get 20% of the total value of the contract or $500, whichever is smaller. See UCC 2-718.

289. What are a seller's remedies for nonacceptance of goods by the buyer?

Damages.

Alternative measure of damages.

Resale.

Rescission.

Specific performance.

Action for the full price.

290. How are damages determined for a buyer's nonacceptance of goods?

The measure of damages is the difference between the market price and the unpaid contract price, with incidental damages. See UCC 2-708.

291. Where is the market price determined for a buyer's nonacceptance of goods?

The market price is determined at the time and place of tender.

292. When is market value determined for a buyer's nonacceptance of goods?

Market value is determined when the seller learns of the breach. See UCC 2-723.

293. What standard is used if market value cannot be determined in a buyer's nonacceptance of goods?

The cost of performance or manufacture is used if no market value can be determined.

294. What are incidental damages when a buyer does not accept goods under a contract?

See UCC 2-710. Incidental damages include expenses incurred in stopping delivery, in the care of the goods, in the custody of the goods, in resale, and in the cost of refinancing.

295. Under what affirmative duty is the seller when he learns of a breach by the buyer for the sale of goods?

When the buyer notifies the seller of the repudiation of the contract, the seller must stop further performance and take reasonable measures to minimize the loss. This is the avoidable consequences rule. Note: completion of the product may be required to minimize the losses.

296. In what situation may the seller use the alternative measure of damages or the lost volume seller remedy?

If the seller has an unlimited supply and the demand is limited, and the normal measure of damages will not give the seller adequate compensation for the buyer's breach, the seller may use the lost volume seller's remedy.

297. What is the measure of damages for a lost volume seller when a buyer repudiates a contract?

The measure of damages is the profit and reasonable overhead that the seller would have made from full performance by the buyer. See UCC 2-708(2).

298. What is resale?

Upon a breach of contract by the buyer, the seller has the right to sell the goods and recover the difference between the resale price and the contract price as well as incidental damages. The seller is under a duty to use reasonable care and to mitigate damages for goods under manufacture. This may require selling the scrap or salvage by completion. See UCC 2-706.

299. When a buyer repudiates a contract for the sale of goods or refuses delivery, may the seller rescind the contract?

Yes. The seller may cancel the contract. See UCC 2-703(f).

300. When is a seller entitled to specific performance of a contract for the sale of goods that a buyer has repudiated?

Specific performance may be granted to the seller if there are unusual circumstances present including agreements to provide security, or when a trust or fiduciary relationship is present

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