ALTERNATE CASE PROBLEM ANSWERS
CHAPTER 19
BREACH OF CONTRACT AND REMEDIES
19-1A. Mitigation of damages
The court awarded Vuylsteke $74,012 ($72,000 for the annual salary and $2,012 for shipping
costs to move to London). Broan appealed to a state intermediate appellate court, which
affirmed the award. As to Broan’s argument that Vuylsteke had not taken reasonable measures
to mitigate her damages, the court that stated that the “question of whether a plaintiff properly
19-2A. Waiver of breach
No. The court acknowledged that Dorn and Britt’s consistent acceptance of payments that
were, on the average, one or two weeks late might have precluded their basing an action to sell
19-3A. Mitigation of damages
The court awarded West damages that included $216,852.27 for his salary through October
B-2 APPENDIX B: ALTERNATE CASE PROBLEM ANSWERS—CHAPTER 19
mitigation of his damages, the appellate court stated, “An employee damaged by the breach of
an employment contract has a duty to take steps to minimize the loss by making a reasonable
19-4A. Liquidated damages v. penalties
The court entered a judgment against Gaddis for the amount of the unpaid dues, plus $58 in late
fees. Gaddis appealed to a state intermediate appellate court, which affirmed the lower court’s
judgment. The appellate court observed, “The provision at issue here, which provides for a flat
19-5A. Limitation of liability
The court pointed out that state statutes specifically prohibited contract clauses purporting to
exempt parties from liability for the consequences of their own willful acts, including negligence,
19-6A. Liquidated damages versus penalties
The court granted summary judgment to the Sobels, validating the clause as an enforceable
liquidated damages provision. The Ivanovs appealed. The state appellate court affirmed, also
APPENDIX B: ALTERNATE CASE PROBLEM ANSWERS—CHAPTER 19 B-3
19-7A. Mitigation of damages
The trial court concluded that Red Lion was in breach of contract, and awarded Fair more than
$180,000, including damages for her loss of salary after Red Lion’s offer of reinstatement. Red
19-8A. Damages
The court awarded Hudson what it sought, and Beys appealed to a state intermediate appellate
court. This court reversed the award of the trial court and remanded the case for the entry of a
judgment in favor of Beys. The appellate court pointed out that there was no proof Beys was
19–9A . Compensatory damages
Ek is entitled to recover damages in an amount that compensates her for the loss of the bargain
and reimburses her for any expenses she suffered as a result of Peterson’s breach. The court
held that Peterson breached the contract with Ek and awarded her damages that included the
B-4 APPENDIX B: ALTERNATE CASE PROBLEM ANSWERS—CHAPTER 19
19-10A. A QUESTION OF ETHICS
1. The jury found that Garza had failed to mitigate his damages. The court
disregarded this finding and entered a judgment in Garza’s favor that included an amount for
lost earnings. TAHC appealed to a state intermediate appellate court. The state intermediate
appellate court held that Garza was not entitled to an award for lost earnings and reversed this
2. Generally, it is fair to require employees to try to mitigate damages, even when the
employee has been wronged. This doctrine has sometimes been called the “rule of avoidable
consequences.” Phrased another way, a party is held not to be able to recover for damages that
3. The ethics underlying the mitigation doctrine include the work ethic and the
concept of good faith. A party should not, in good faith, be permitted to recover for damages that