Breach of contract
The Open Offer
Jimmy, an art dealer and merchant, is running out of funds. Luckily, he owns a priceless Van Gogh painting. He writes his friend Tommy. The letter says “Tommy you remember that Van Gogh painting you were interested in buying? I will offer it to you for $500,000. I will give you one month to accept this offer.” Jimmy signs the letter. Tommy receives the letter, and he is very excited. He writes back two weeks later saying that he accepts, and Tommy encloses a check for $500,000. Unfortunately, Jimmy received a better offer for the painting, and Jimmy accepts that one.
Is there a breach of contract?
If so, what remedies may Tommy get?
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Breach of contract
Parties engaged in a contract are bound by the contract and failure to abide by the contract amounts to a breach of the contract. In the case, that one party violates the terms of a contract they are bound to pay and settle for the damages suffered by the other party in the contract. There are various remedies to address a breach of contract with the aim of reinstating the position of the aggrieved party. In the arrangement of Jimmy and Tommy in the sale of Van Gogh, there is a clear contract established between the two parties. In the contract all the components of contracts that include, offer, acceptances, legal capacity, the legality of the contract, consideration, writing requirement, and capacity and competence are present. However, Jimmy violates the terms of the contract by giving the offer to another party with a better deal. Jimmy breached the contract with Jimmy and there are various remedies that can be applied in the case.
To begin with, compensatory damages to the breach of the contract can be instituted as a remedy (Burrows, 2004). The party that suffers from the breach of contract is entitled to the benefit of the agreement they entered. The plaintiff in the case is entitled to receive compensatory damages in the amount of money or value equal to the contract. In this respect, Tommy will receive money from Jimmy equal to the benefit that would have been realized if the contract had not been breached.
Consequently, a restitution of the contract could have been instituted as a remedy to the breach of the contract (Burrows, 2004). Restitution entails is a remedy created to restore the victim of a breached contract to a position they were before the contract. Tommy will get restitution in the case of money they spent in relation to the contract. In this case, the acceptance of the offer could have spent money such as legal or consultation fees before writing it.
Furthermore, punitive damages can be used as remedies to the contract (Wilkinson and Baron, 2009). The punitive damages are exemplary damages that are instituted to punish the party that fraudulently, willfully and maliciously breach the contract. In this regard, Jimmy will be compelled to pay Tommy a reasonable amount that will be decided in a court of law as a punishment for breaching the contract. The punitive damages are used as a deterrent to parties in a contract to avoid malicious and fraudulent breaching of contracts.
Moreover, specific performance can be used as a remedy to a breach of contract (Wilkinson and Baron, 2009). The specific performance forces the parts involved in breaching a contract to perform their duties and obligations in the contract. The specific performance is instituted when the money damages cannot fully compensate the plaintiff. In this case, Jimmy will be forced to play meet his obligation in the previously entered contract. Jimmy will be forced to sell Van Gogh painting to Tommy as earlier agreed in the original contract. This remedy ensures that the contracts are completed to the benefit of the plaintiff.
In conclusions, there is a wide range of remedies available to parties in a contract once a contract has been breached by one party. The remedies are meant to ensure that the plaintiff does not suffer from breaching of a contract that they were willing to perform. The remedies, in this case, include compensatory damages, punitive damages, restitution, and specific performance. The party breaching the contract is punished while the other part benefits from the contract.
References
Burrows, A. S. (2004). Remedies for torts and breach of contract (Vol. 122). Oxford: Oxford University Press.
Wilkinson‐Ryan, T., & Baron, J. (2009). Moral judgment and moral heuristics in breach of contract. Journal of Empirical Legal Studies, 6(2), 405-423.
