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1. Uncertainty2. Foreseeability3. Emotional Distress4. Mitigation5. Liquidated and Punitive Damages
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Uncertainty: Freund at 95
Royalties too uncertain to provide a basis for expectation damages
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UncertaintyIs Drews at 952 any different?
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UncertaintyDrews
How to calculate lost profits? Gross profits less cost of obtaining them
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UncertaintyDrews
How to calculate lost profits? Gross profits less cost of obtaining them Suppose the business is an existing one.
Can we assume that the future will resemble the past?
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UncertaintyDrews
How to calculate lost profits? Gross profits less cost of obtaining them Is there a “new business rule” of non-
recovery?
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UncertaintyDrews
How to calculate lost profits? Gross profits less cost of obtaining them Is there a “new business rule” of non-
recovery? An evidentiary rule, not an absolute bar
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UncertaintyDrews
How to calculate lost profits? Gross profits less cost of obtaining them Is there a “new business rule” of non-
recovery? What was the evidence here?
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UncertaintyDrews
How to calculate lost profits? Gross profits less cost of obtaining them Is there a “new business rule” of non-
recovery? How would you satisfy the “establish with
reasonable certainty” standard for a resto? Would a marketing forecast help?
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UncertaintySmith v. Penbridge 955
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It’s an acquired taste…
UncertaintyGilroy v. ABC 956
How is this different from Freund?
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UncertaintyGilroy v. ABC 956
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UncertaintyRedgrave v. BSO 956
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UncertaintyRedgrave v. BSO
What was the basis for the claim?
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UncertaintyRedgrave v. BSO At a Los Angeles movie theater, in 1978, there was a
bombing and protests. The furor was sparked by a documentary called "The Palestinian," a film produced and bankrolled by Vanessa Redgrave.
"Many people were outraged. You remember what your reaction was?" Wallace asks.
"I didn't know why people were outraged to see a film about the Palestinians," she replies.
Perhaps it was a scene where she danced, wielding a Kalashnikov rifle. 60 Minutes
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Foreseeability
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ForeseeabilityHadley v. Baxendale at 113
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The Hadley Mill, Gloucester UK
Hadley v. BaxendaleGloucester to Greenwich
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2.5 hrs, according to Mapquest
ForeseeabilityHadley v. Baxendale
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Tel: 011-44-203-188-2100
ForeseeabilityHadley v. Baxendale
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Just what was the Δ told? Cf Victoria Laundry at 115
ForeseeabilityHadley v. Baxendale
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Just what was the Δs told?
What if the headnote had been correct?
ForeseeabilityHadley v. Baxendale
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Just what was the Δs told?
What if the headnote had been correct?
Why might this be a rule of efficiency?
ForeseeabilityHadley v. Baxendale
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Why might this NOT be a rule of efficiency?
ForeseeabilityHadley v. Baxendale
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Why might this NOT be a rule of efficiency?
How would you expect carriers to react?
ForeseeabilitySpang Industries at 957
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BattenkillBrudge
ForeseeabilitySpang Industries at 957
Fort Pitt breached by delivering late, with the result that Torrington incurred extra damages in pouring cement in cold weather Torrington could recover if this was on
the cards
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ForeseeabilitySpang Industries at 957
Could Torrington recover for these expenses?
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ForeseeabilitySpang Industries at 957
Could Torrington recover for these expenses? Yes, since the alternative of waiting
another 8 months would have increased the damages even more
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Foreseeability: Increased labor costs Cricket Alley 962
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Foreseeability: Increased labor costs Cricket Alley
What was the promise?
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Foreseeability: Increased labor costs Cricket Alley
What was the promise?
And what expenses did Cricket Alley incur as a consequence of the breach?
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Foreseeability: Increased labor costs Cricket Alley
If increased labor costs are foreseeable, why not lost profits? Same diff… Cook v. Woornick 965 More liberal than Drews?
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Foreseeability: Lost Profits
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Where the damages are astronomical, are you sure who the least cost risk avoider is? Qu. Western Industries at 966
Foreseeability: Lost Profits
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Where the damages are astronomical, are you sure who the least cost risk avoider is? Qu. Milgard Tempering at 117
Emotional Distress
Valentine at 967 Is it foreseeable that one might suffer
emotional distress on being fired?
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Emotional Distress
Valentine at 967 Is it foreseeable that one might suffer
emotional distress on being fired? So why no recovery?
Can you think of a justification for Restatement § 353
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Emotional Distress
Is Allen v. Jones consistent with Valentine?
38 Jules et Jim
Mitigation: Luten Bridge at 968Building bridges to nowhere
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Mitigation: Luten Bridge at 968Building bridges to nowhere
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MitigationShirley MacLaine
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Mitigation:Shirley MacLaine
Which film was the biggest turkey?
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Mitigation:Shirley MacLaine
Which film was the biggest turkey?
What if she had been offered a role as a nun in a western?
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Mitigation
What if the injured party is a business that gets new clients after the breach? Kersage Computer at 978
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Mitigation
What if the injured party is a business that gets new clients after the breach? Kersage Computer at 978 The analogy to lost volume sellers
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What do they have in common?
1. Uncertainty2. Foreseeability3. Emotional Distress4. Liquidated and Punitive Damages
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A common valuation problem
1. Uncertainty: By the court ex post
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A common valuation problem
1. Uncertainty: By the court ex post2. Foreseeability: By the parties ex ante
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A common valuation problem
1. Uncertainty: By the court ex post2. Foreseeability3. Emotional Distress
1. Both ex post and ex ante
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A common valuation problem
1. Uncertainty: By the court ex post2. Foreseeability3. Emotional Distress
1. Both ex post and ex ante2. Endogenous preferences
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A common valuation problem
1. Endogenous preferences
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Ron Hunt in 1974:
Notice anything unusual about his batting stance?
A common valuation problem
1. Uncertainty: By the court ex post2. Foreseeability3. Emotional Distress4. Liquidated and Punitive Damages
1. If we knew what the damages would be, we wouldn’t worry about a liquidated damages clause
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Liquidated damages:When permitted
Restatement § 356
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Liquidated Damages
How to distinguish an effective liquidated damages clause from a penalty?
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Lake River v. Carborundum
Lake River to bag Carborundum’s Ferro Carbo and serve as distribution center
Why did LR insist on a liquidated damages clause?
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Lake River v. Carborundum
And why was this a penalty?
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Lake River v. Carborundum
And why was this a penalty? So what’s wrong with penalties?
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Lake River v. Carborundum
And why was this a penalty? So what’s wrong with penalties?
The efficient breach argument?
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Lake River v. Carborundum
And why was this a penalty? So what’s wrong with penalties?
A suitable case for paternalism?
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Lake River v. Carborundum
And why was this a penalty? So what’s wrong with penalties?
Signalling?
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C and H Sugar at 988
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MV Moku Pahu
C and H Sugar
Sun to pay damages of $17K/day after delivery date of June 30, 1981
Sun completed the barge on March 16, 1982
Halter supplies the catamaran tug boat on July 15, 1982
Sun assembles tug to barge in July ‘82
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C and H Sugar
Sun to pay damages of $17K/day after delivery date of June 30, 1981, or $4.4M
Was this in excess of the damages actually suffered?
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C and H Sugar
Sun to pay damages of $17K/day after delivery date of June 30, 1981
Was this in excess of the damages actually suffered?
How does Restatement § 356 assist? Cf Comment B
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C and H Sugar
Sun to pay damages of $17K/day after delivery date of June 30, 1981
Was this in excess of the damages actually suffered?
How does Restatement § 356 assist? Qu. Illustration 4
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C and H Sugar
Sun to pay damages of $17K/day after delivery date of June 30, 1981
Was this in excess of the damages actually suffered?
How does Restatement § 356 assist? Contrast Massman at 994
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So what’s changed from last summer?
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Recognize this?
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Commentaries 1765
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Pure and proper slavery does not, nay cannot, subsist in England; such I mean, whereby an absolute and unlimited power is given to the master over the life and fortune of the slave. And indeed it is repugnant to reason, and the principles of natural law, that such a state should subsist anywhere.
Commentaries 1765
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Upon these principles the law of England abhors, and will not endure the existence of, slavery within this nation: so that when an attempt was made to introduce it, by statute 1 Edw. VI. c. 3. which ordained, that all idle vagabonds should be made slaves, and fed upon bread, water, or small drink, and refuse meat; should wear a ring of iron round their necks, arms, or legs; and should be compelled by beating, chaining, or otherwise, to perform the work assigned them, were it never so vile; the spirit of the nation could not brook this condition, even in the most abandoned rogues; and therefore this statute was repealed in two years afterwards . And now it is laid downd, that a slave or negro, the instant he lands in England, becomes a freeman; that is, the law will protect him in the enjoyment of his person, his liberty, and his property.
Seven years later…
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Granville Sharp
Seven years later…
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It comes to court: R v Knowles, ex parte Somersett, 20 State Tr. 1 (1772).
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Wm Murray, Earl Of Mansfield
Mansfield’s judgement
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The state of slavery is of such a nature, that it is incapable of being introduced on any reasons, moral or political, but only by positive law, which preserves its force long after the reasons, occasion, and time itself from whence it was created, is erased from memory. It is so odious, that nothing can be suffered to support it, but positive law. Whatever inconveniences, therefore, may follow from the decision, I cannot say this case is allowed or approved by the law of England; and therefore the black must be discharged.
Good luck!
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