Business
Introduction
Contracts are legal binding agreement that brings two or more parties together. The law of contracts is very vital to people involved in entering the contract. For example, when one decides to buy an item from the supplier with some terms and conditions in place, they may decide to sign a contract depending on the mode of payment. Contracts need not to be in writing, but parties involved may decide to do so. Only people above the age of 18 are allowed to sign a contract. Contracts do have benefits and damages to the parties involved and more importantly, there are various types of damages involved as discussed below.
- Types of Damages in a contract
- Liquidated damages: this is a type of contract damage which is specified in the contract signed by the parties involved. Always they may operate as an inducement with an intention not to break the contract but should not have a direct loss that could lead to the breaching of the contract signed. It is believed that courts avoid enforcing law on this kind of damages especially if they have the consequences of punishment.
- Compensatory Damages: these are types of damages that helps one get a compensation for the breached contract. More specifically, it is done on some aspects of economic loses done due to the broken contract to the parties involved.
- Consequential Damages: these are contract damages caused by breaching the contract indirectly by the party involved.
- Punitive damages: damages intended as a punishment for those guilty of breaching contracts. Sometimes they are not based on the actual economic deprivation like in the case of the compensation damages.
- Nominal damages: these are rewarded when there is no monetary loss suffered by the plaintiff.
- Restitutionary damages: these are a form of equitable remedy preventing the breaching party from being unfairly enriched in that maybe when one party fails to honor the contract like after being supplied with a particular item then he or she fails to pay, they may be involved in a restitutionary damage.
- Liquidated damages and possibility of being enforced.
It is a type of contract damage in which the party whose contract has been breached should get a total compensation for a given sum of money. It also advocates for compensation incase part of the contract is broken. Always they may operate as an inducement with an intention not to break the contract but should not have a direct loss that could lead to the breaching of the contract signed.
No, they will not be always enforced. If they have to be enforced, it should be a difficult task to determine actual damages. In addition, the damage amount should be reasonable under the prevailing conditions. If that is not the case, law will consider the marked amount as fine, rather compensation for injury. In such an event, the damages are considered as waste to the parties involved. They are then scrutinized by the legal firm with reference to the merits of the case.
- Types of Equitable Remedies
Equitable remedies are of three types according to Ken LaMance (2012):
- specific performance,
- contract rescission,
- contract reformation
- The court should rule in favor of Judith Bucklin since in the contract, though time factor was not spelt out, the other party, Frances Morelli did in several instances disobeyed and also did not indicate the marketable title as was outlined in the contract. Also, Morelli was to refund the deposit in 1st of September, but it was possible he opted to terminate the contract and give a refund when it was too late.
- Damages should be awarded to Judith Bucklin since she had taken her time waiting for Morelli to resolve the problems which they were encountering in their contract and the defendant was not able to challenge the binding agreement by the plaintiff, but all were in vain.
- In case she is not awarded for the damages, she is entitled to a remedy as per the terms of the contract as stipulated in the legal firms. Appropriate remedy is to get Frances Morelli to obtain marketable title for the house in question. This is in reference to Paragraph 10 of the contract which states that: “if Seller is unable to convey good, clear, insurable, and marketable title, Buyer shall have the option to: (a) accept such title as Seller is able to convey without abatement or reduction of the Purchase Price” (Jentz GA, Miller RL, Cross FB, 2010).
Reference
Ken LaMance (2012). Retrieved from http://www.legalmatch.com/law-library/article/types-of-damages-available-for-breach-of-contract.html.
BusinessDictionary. Retrieved from http://www.businessdictionary.com/definition/liquidated-damages.html.
Jentz GA, Miller RL, Cross FB (2010). Business Law: Text and Cases: Legal, Ethical, Global, and Corporate Environment, Cengage Learning. Retrieved from http://books.google.com/books?id=Is-O46iiMTAC&pg=PA109&lpg=PA109&dq=Chapter+5+Case+problem+5-6+Pfizer&source=bl&ots=sXUMfF1hSZ&sig=bdrYNp7ZeRx9Musqbl9hHmD9dqg&hl=en&sa=X&ei=bftBUYO_ArXj4AO37oCAAQ&ved=0CC0Q6AEwAA#v=onepage&q=on%20July%2C%207%202000%2C%20Frances%20Morelli&f=false.
