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McInnes/Kerr/VanDuzer: Managing the Law: The Legal Aspects of Doing Business, Fourth Edition
Chapter 12: Contractual Remedies
4) A distinction is often drawn between cost of cure damages and loss of value damages.
Which of those possibilities is closer to the remedy of specific performance? Explain your
answer.
McInnes/Kerr/VanDuzer: Managing the Law: The Legal Aspects of Doing Business, Fourth Edition
Chapter 12: Contractual Remedies
5) “Compensation is normally not available for intangible losses. Recently, however,
Canadian courts have begun to award compensation in such circumstances if one of the
purposes of the contract was to protect the plaintiff’s peace of mind. In one case, for
instance, an elderly couple was awarded damages for the grief that they suffered after their
beloved dog was suffocated in an airplane’s cargo hold. The couple had stressed to the
airline, at the outset, how much the dog meant to them.” On the basis of such cases, it has
been suggested that compensation is available for intangible losses if they are not too
remote from the defendant’s breach. Formulate an argument that supports that statement.
McInnes/Kerr/VanDuzer: Managing the Law: The Legal Aspects of Doing Business, Fourth Edition
Chapter 12: Contractual Remedies
6) What are nominal damages? Why is it sometimes dangerous to sue for breach of contract
and claim nominal damages?
7) When will punitive damages be available for a breach of contract?
McInnes/Kerr/VanDuzer: Managing the Law: The Legal Aspects of Doing Business, Fourth Edition
Chapter 12: Contractual Remedies
8) “A contractual term for liquidated damages relieves the court of the need to carefully
calculate the plaintiff’s losses. A contractual term for a penalty does not have the same
effect.” Explain the meaning of that statement. Explain whether or not that statement is
true.
9) Why are the courts willing to award injunctions more often than orders for specific
performance?
McInnes/Kerr/VanDuzer: Managing the Law: The Legal Aspects of Doing Business, Fourth Edition
Chapter 12: Contractual Remedies
10) On December 16, Ludwig agreed to sell an antique piano to Elise for $100 000. She
paid $20 000 immediately and promised to pay the remainder on March 26, when he was
required to deliver the instrument. Prior to the delivery date, however, Ludwig realized that
the piano was really worth $175 000. He therefore refused to perform the contract. Is Elise
entitled to specific performance? Identify and explain the factors that affect your answer. If
Elise is entitled to specific performance, is Ludwig entitled to receive anything from her in
return? If Elise is not entitled to specific performance, how much, if anything, will she
receive in damages? Explain your answer.
McInnes/Kerr/VanDuzer: Managing the Law: The Legal Aspects of Doing Business, Fourth Edition
Chapter 12: Contractual Remedies
11) Pascal, who is 15 years old, entered into a contract with Wagers Antique Shop. He
promised to trade his services as a computer programmer for an antique bible. Under the
terms of that agreement, he was required to begin work as a computer programmer as soon
as Wagers delivered the book to him two weeks later. The next day, however, Wagers
informed Pascal that it decided to keep the book for itself. Since Pascal is anxious to
acquire the book, which is unique, he wants to bring a claim for specific performance.
Explain why that claim may fail. Provide two (related) reasons for your answer.
12) On March 1, Shoshanah agreed to manufacture and sell a widget to Marshall for a total
price of $50 000. He paid $20 000 immediately and promised to pay the remainder on June
McInnes/Kerr/VanDuzer: Managing the Law: The Legal Aspects of Doing Business, Fourth Edition
Chapter 12: Contractual Remedies
15. The contract required Shoshanah to deliver the widget to Marshall on June 1. On April
15, Marshall spent $10 000 altering his production plant in a way that would accommodate
the widget that he expected to receive from Shoshanah. On May 20, Shoshanah informed
Marshall that she would not be able to deliver as promised. On June 1, the market value of
a widget was $65 000. Marshall can acquire a similar widget for that amount, but he will
have to once again spend $10 000 in renovations to his production plant to accommodate
that substitute. (No two widgets are exactly alike and each one has unique requirements.)
Is Marshall entitled to receive expectation damages? If so, on what basis and in what
amount? Is Marshall entitled to receive reliance damages? If so, on what basis and in what
amount? Is Marshall entitled to receive restitution? If so, on what basis and in what
amount? If Marshall has an option between several types of damages, which one should he
choose?
Answer:
McInnes/Kerr/VanDuzer: Managing the Law: The Legal Aspects of Doing Business, Fourth Edition
Chapter 12: Contractual Remedies
13) Berner Building Inc agreed to build a house to certain specifications for Kendra. The
total contract price was $500 000. A term in that contract required Berner to use marble
from a certain region in northern Italy in the main bathroom. By mistake, Berner used
marble from a region in southern Italy instead. The value of the marble was the same in
either event. Kendra nevertheless is unhappy. Because she had once enjoyed a wonderful
honeymoon in northern Italy, she was very upset that her demands were not met. She insists
that Berner should be required to renovate her bathroom using proper materials. That job
would cost $25 000 and it would not increase the value of the house at all. Is Kendra
entitled to any remedy? Explain your answer.
McInnes/Kerr/VanDuzer: Managing the Law: The Legal Aspects of Doing Business, Fourth Edition
Chapter 12: Contractual Remedies
14) Slodder Construction Co entered into a contract with the City of Lowey. It agreed to
build a tunnel under city hall in exchange for a total price of $5 million. Shortly after
beginning the project, Slodder realized that it had entered into a very bad bargain. The job
was much more difficult than initially expected. It would cost $15 million to complete.
Slodder nevertheless carried on in order to protect its reputation. Somewhat surprisingly,
however, after half the tunnel had been finished, Lowey breached the contract by refusing
to give Slodder access to the worksite. At that point, the city had already paid $2.5 million
to Slodder, and Slodder had already spent $7.5 million on the project. Before trial, another
construction company completed the tunnel under a separate contract with the city. Is
Slodder entitled to receive any more money from the city in the form of expectation
damages or reliance damages? Explain your answer. Is there any other basis upon which
Slodder can claim a remedy from Slowey? If so, how much will that remedy be worth?
Explain your answer.
Answer:
McInnes/Kerr/VanDuzer: Managing the Law: The Legal Aspects of Doing Business, Fourth Edition
Chapter 12: Contractual Remedies
15) A man and his elderly aunt entered into an oral contract. He promised to provide
services to her for the rest of her life and she promised to leave a specific house to him
under her will. That house was worth $10 000. The nephew performed his end of the
bargain by spending $3000 to care for his aunt before she died. He was disappointed upon
her death, however, to learn that her will did not leave the house to him. The nephew
thought about suing his aunt’s estate for breach of contract. His lawyer has explained,
however, that that action will fail because while the contract is valid, it is also
unenforceable. It deals with an interest in land, but contrary to the Statute of Frauds, it was
not evidenced in writing. It was entirely oral. Is there any basis upon which the nephew can
successfully sue his aunt’s estate? If so, will the expectations that the nephew had under the
contract be fulfilled? Or will some other measure of relief be available to him? Explain
your answers.
