Contracts Essay 3 Module 22
Contracts Essay 3
Issues Raised by Breach of Contract
Breach of Contract A breach of contract occurs when a party’s duty to perform under a contract is absolute, and that party fails to perform. The duty can be absolute because it was not conditional in the first place; any conditions were either excused or fulfilled; or the duty was not discharged. According to the facts Bilda had an absolute duty to finish building the cabin by December 1, the agreed upon completion date. Since Bilda committed the breach willfully, the court may tend to side with Homer and find that Bilda willfully and materially breached the contract. Bilda did complete half of the construction; Homer will probably be entitled to damages amounting to the value of his work.
Anticipatory Repudiation Occurs when a party unequivocally repudiates his duty to perform, before the performance is due. Performance was due by December 1, and Bilda walked off the job on November 1, telling Homer “the job is not going to be profitable” and “besides the trout are biting at Clear Lake.” The facts show that Bilda has repudiated by walking off the job.
Damages
If a breach is considered material, the breach recipient can cancel the contract and sue for damages. However, there must actually be damages before such relief can be granted. Damages in a contract case are generally determined by examining a party’s expectation interest. That is, the breach recipient is entitled to damages measured by how much in money damages would be required to put the party in the same position as if the contract had been properly performed. Homer has no damages unless the costs and expenses to complete the cabin will exceed the original contract price ($200,000) Homer expected to pay.
Cost of Completion Homer’s cost to complete construction was $110,000. In addition, he will also have a $20,000 cost to replace the fireplaces. A party is required to mitigate damages, but the law
Issues Raised by Breach of Contract
Breach of Contract A breach of contract occurs when a party’s duty to perform under a contract is absolute, and that party fails to perform. The duty can be absolute because it was not conditional in the first place; any conditions were either excused or fulfilled; or the duty was not discharged. According to the facts Bilda had an absolute duty to finish building the cabin by December 1, the agreed upon completion date. Since Bilda committed the breach willfully, the court may tend to side with Homer and find that Bilda willfully and materially breached the contract. Bilda did complete half of the construction; Homer will probably be entitled to damages amounting to the value of his work.
Anticipatory Repudiation Occurs when a party unequivocally repudiates his duty to perform, before the performance is due. Performance was due by December 1, and Bilda walked off the job on November 1, telling Homer “the job is not going to be profitable” and “besides the trout are biting at Clear Lake.” The facts show that Bilda has repudiated by walking off the job.
Damages
If a breach is considered material, the breach recipient can cancel the contract and sue for damages. However, there must actually be damages before such relief can be granted. Damages in a contract case are generally determined by examining a party’s expectation interest. That is, the breach recipient is entitled to damages measured by how much in money damages would be required to put the party in the same position as if the contract had been properly performed. Homer has no damages unless the costs and expenses to complete the cabin will exceed the original contract price ($200,000) Homer expected to pay.
Cost of Completion Homer’s cost to complete construction was $110,000. In addition, he will also have a $20,000 cost to replace the fireplaces. A party is required to mitigate damages, but the law