Quiz 20: Breach of Contract and Remedies

Business

In this case it seemed that it was the school's misunderstanding of the situation which led to a lawsuit. The school may have been able to solve the problem without litigation. They were not owed liquidated damages due to their waiver of breach (see below). Refer to the case Textor Construction v Forsyth R-III School District (60 SW3d 692). Facts 1) School entered agreement with contractor to for construction of sports field. After completion of the contract the contractor was given only partial payment by the school. 2) The school is countersuing for liquidated damages due to delay of completion of the contract. 3) Trial court held for the contractor, the school appealed. Relevant Terms, Laws, and Cases Liquidated damages - are damages resulting from delay or breach of contract duties. The damage amount must be reasonable for the damage caused and not excessive. Opinion Appeals court affirmed the decision. The court found that contractor is owed the money due as it had performed the duty necessary for the construction of the ball park. The architect representing the school had misconstrued some of the contract conditions. On the liquidated damages count, the school had waived the breach when its representative informed the contractor claiming the school's responsibility for the delays in construction.

Liquidated damages are stated in contract as a penalty for failure to fulfill a duty. The damages will be upheld by court if actual damage can't be estimated and it is not too unreasonable. I f A agreed to sell to L a painting and fails to do so, L may be able to recover the liquidated damages. However, this amount though has to be reasonable in terms of actual damage. For example, if L was actually a buying this painting for someone else, it may be the commission lost to by L or additional cost of having to find another like value painting.

Case Facts: Person R is sued Company S for underpayment of minerals mined from his own property. Company had offered amount underpaid for one period, but he claims underpayment of multiple period and wants to rescind the contract. Trial court held that owner may not rescind lease. Owner appealed. One can consider that Person R is not correct in his claim of entitlement of rescinding the contract. As, it is an opportunity for the other party to rescind the contract when somebody commit a material or substantial breach of contract. On the other end, if the breach to be considered material or substantial. It need to be defeated the purpose of making the contract in the first place and whereas w.r.t this case concern the breach is not considered as substantial. The mistake that was happened on behalf of Person S was discovered. They have also attempted to rectify the issue but however Person R declined the claims of further underpayment. Hence, from the above discussion, one can conclude that the case is more related to guiltless misunderstanding rather than breach of contract.

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