Remedies
Reading Assignments
For 9/14, review Northern Illinois Gas:
1. Is the court right to make such a clear distinction between clauses governed by UCC
§ 2-719 and§ 2-718? What arguments are there for and against the court’s approach?
2. Is the following clearly one or the other kind of clause?
“ALARM CO. IS NOT LIABLE FOR LOSSES WHICH MAY OCCUR IN
CASE OF MALFUNCTION OR NONFUNCTION OF ANY ALARM
SYSTEM. ALARM CO.’s EXCLUSIVE LIABILITY IN CASE OF
MALFUNCTION OR NONFUNCTION (EVEN IF DUE TO ALARM
CO.’s NEGLIGENCE OR FAILURE OF PERFORMANCE) IS LIMITED
TO THE AMOUNT OF THE ANNUAL SERVICE CHARGE ($10,000).”
Also read pp. 68-80 (you can skim Oden) in the textbook. This involves avoidable
consequences, offset and the collateral source rule. Keep in mind the following
questions:
1. What is the rule of avoidable consequences? Regarding S.J. Groves, what damages
does the court say plaintiff should recover? Why should plaintiff get those damages
when there was perfectly good concrete sitting next door (at Trap Rock) that it didn’t
buy?
2. Most of the litigation in avoidable consequences cases involves the reasonableness of
plaintiff’s efforts to avoid their losses – what are reasonable efforts?
Consider the following example – Gerda is a high school math teacher with Master’s
degrees in math and physics. She was recently unlawfully fired from her job at
which her monthly contract wages were $3,000 (assume breach of contract). She was
fired 1 month into her annual contract. What kind of job must she take in order for
her to meet the “reasonable efforts” requirement? Must she:
a. Take a job as a bus driver for the remainder of the year for $1,500/month?
b. Take a job as a math/physics teacher in a town 50 miles away? 15 miles
away?
c. Take a job as a substitute teacher in another district that will require her to
commit to her new employer for the remainder of the year and allow her to
teach math BUT only guarantee her teaching 2 days a week @ $15/hour.
In a slightly different vein - what kind of steps should a person have to take to avoid
personal injury damages – e.g., should a person have to undergo a perilous
operation to avoid potential pain and suffering in the future?
3.
What is the relationship between the avoidable consequences doctrine and the
offsetting benefits doctrine?
a. Exactly what kinds of benefits must be offset?
b. How does offset work differently in torts and contracts situations?
c. Remember Gerda – what if the teaching job she was fired from actually
allowed her to take a new job that paid her $4,000/month for the
remainder of the original contract term?
4.
Collateral sources – just skim Oden and the notes (we will talk about the tort
reform aspects in a few days – I just want you to know the basics of the
collateral source rule.
a. What is the collateral source rule (Oden v. Chemung County)?
b. When does it apply?
c. What is the reasoning for the rule?
d. What counts as a collateral source?