Contracts

Breach of contract happens when a legal agreement is not honored as expected by the parties involved (Golden 2016). In a situation where a breach of contract is established, there is compensation by the guilty person to the other party (Hickey, 2017). Payment is calculated mainly as the financial loss caused by the breach of contract.

As agreed in the contract, Brick was supposed to complete the work not later than 10th May, and it was in agreement that upon failure, the Owner will be paid $100 for each day the job is not completed. Since construction was delayed for ten days, Brick is expected to pay $1000 to the Owner. The terms of a contract should be adhered to, and that includes such a clause that Brick agreed to pay the Owner in case the contract is failed. Furthermore, the Owner still has a right to recovering the damages in terms of the money he would have gotten if the terrace was completed in time. This means that the Owner can calculate the profit he would have gained daily if the business was opened in time and charge it on Brick.

Generally, if the breach of a contract is partial, the plaintiff can file for compensation amounting to the money spent in hiring a different person to complete the work (Goldberg, 2018). However, in situations where the amount paid by the plaintiff, for the replacement, is higher than the value of the service, some courts can be inclined to consider the diminished value and the contemplated value and find the difference between the two (Hickey, 2017). In the scenario, it is not right for the owner to deny owing Mr. Green money. The basic things to consider are the performance of Green before he walked away from the job and since he had managed to work through half of the required job. Even though the owner had to pay the replacement, Green has a right to be paid for the job he did. The Owner is only limited to recovering the work that was not done, and hence Green can sue for the unpaid work as indicated in the contract. In this sense, Green has the right to the difference between the value of the service in the contemplated contract and the actually offered value.

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In the given contract with Furnco, the owner can claim compensatory damages such that he can be paid for the damages caused as a result of the bleach. The owner expected the tables would be brought in time for him to arrange and be prepared before Memorial Day. However, due to Furnco’s failure, the owner lost all the profits he would have made if the business was already open. If the case is presented in court and it is established that Furnco had a malicious reason for not meeting his end of the deal, additional compensation can be added in Furnco’s account; this is referred to as punitive damages as demonstrated in Revelations Perfume and Cosmetics Inc. v. Prince Rogers Nelson.

The owner, therefore, can claim the consequential damages that are all the amount in profit the owner would have gained if the terrace was opened during the traditional Memorial Day. The owner can also claim expectation damages based on the agreed terms in the contract.

 

References

Revelations Perfume & Cosmetics, INC. v. Nelson, 2012 N.Y. Slip Op 50721 (Sup. Ct. 2012).

Hickey, S.J., 2017. Punitive damages for breach of contract: A Singaporean perspective. Common Law World Review, 46(3), pp.239-245.

Golden, J.M., 2016. Reasonable Certainty in Contract and Patent Damages. Harv. JL & Tech., 30, p.257.

Goldberg, V.P., 2018. Reckoning Contract Damages: Valuation of the Contract as an Asset. Wash. & Lee L. Rev., 75, p.301.