Contracts Class Notes 8/29/03

A variation on Rockingham

The bridge company’s agreement with Rockingham County is breached, but then they go to another county and start building another bridge. Does this affect their ability to collect damages on the breach?

Compare to Parker. Shirley MacLaine is not expansive. She can only do one thing at a time. The bridge company can probably build one, two, or ten bridges at the same time. Its limitation on how many bridges it can build is probably how much work it can get.

So if Luten could have performed its contract with Rockingham County and Bunkum County at the same time, its gain from dealing with Bunkum County doesn’t matter to its loss.

On the other hand, if Shirley MacLaine goes and makes another movie during that 14 weeks in question, the earnings from that movie mitigate her losses from the breach of contract over “Bloomer Girl”.

Say you’re a solo-practioning lawyer. If you have lots of time and not many clients, it’s unlikely that picking up another client and making money off them will mitigate damages from another client who breaches their contract with you. If, on the other hand, you get really busy, getting another client could mitigate.

Say you have a contract with X, and X repudiates his promise, and you tell X that you’re going to sue. Now say that X wants to offer you another deal. Is it your duty to take the offer? Is X an untrustworthy contract-breaker? Sometimes you can clearly ignore the second offer from the contract-breaker.

The Practice Exam Question

A party aggrieved by a breach has a duty to mitigate damages that can be recovered without undue trouble. Jobs available to you do not mitigate unless they are comparable. One way courts look at it is: if a job is either different or inferior in kind to the contract job, you don’t have to take it.

A lot of jobs are going to mitigate in these circumstances. Is UK different enough to say that it’s different in kind or inferior in kind? Who decides this? It is decided by a jury.

On the other hand, you don’t need a jury to tell you that driving an 18-wheeler is inferior to working for a law firm. You could get that on summary judgment.

How would you argue Graduate’s case to a jury? How is a jury going to react to your client? How would a jury react to Shirley MacLaine who wants $750,000 for sitting around?

Graduate asks the jury to pay her $110,000 or a significant part of that when she could have mitigated the damages to a great degree. How sympathetic will the jury be to her?

The difference in pay between the two jobs is not a factor that makes it inferior in kind because she can recover the difference between the two salaries. If the salary difference was a lot bigger, that fact might be seen as evidence that UK is inferior in kind.

There are some superior aspects to UK. For example, a higher percentage of UK’s lawyers are partners. UK also has jobs available, whereas DCH is losing clients and laying off attorneys.

This is a jury question. You need to think about arguments you would make to a jury.

Big deal: DCH offered a one year contract, and it never said that UK was offering the same. That’s something that could be superior with DCH. Tricky tricky! If nothing else, it’s probably different.

The question we’re discussing usually doesn’t arise with most employees and most employers.

So if the UK job doesn’t mitigate, what does she get? She gets $70,000.

Was the law clerk job different in kind? Yes, because it’s a temporary job. The law firm job is, in all likelihood, a lifetime job. That doesn’t matter, because a job taken mitigates.

When the broken contract was for full-time employment, anything you do for money during the contract’s time period will mitigate your damages.

In order for Graduate to only receive nominal damages, you would have to show that there were other firms in the same place at the same time that weren’t inferior or different in kind that would have paid her $110,000 or more.

DCH might go around to its competitor firms and ask: “Would you have hired this person at the time we repudiated?” This would go toward proving that Graduate didn’t do a decent job search.

We know that Graduate can recover no more than $70,000.

If the plaintiff rejects a comparable job, that’s her right, but she gives up the loss of wages she could have mitigated.

Exam tips!

· Keep your reader in mind.

· Logically order your points.

· Do it in a way you’re comfortable with.

· Pretend you’re a lawyer.

Questions on Billetter v. Posell

1. What if the plaintiff was offered a position as a sales clerk? That’s pretty different in kind.

2. What if the plaintiff was offered a position as a waitress? That’s very different in kind.

3. If she takes the position, then the money she makes mitigates the damages from the breach.

4. We don’t ask the aggrieved party to move to another town to mitigate damages, in so far as this involves a change in social status.

Problem

What if the employee breaks the employment contract? The speech therapist breaches her promise to work for the school district. What will it cost to reasonably replace this employee? How replaceable are you?

In this problem, the school district had to be replaced with someone who had more teaching experience who they therefore had to pay more. It turns out that the speech therapist owes the school district the $3,000 difference. The school district didn’t want a more experienced person. That’s not a benefit to them.

C.f. 332 N.W.2d 774.

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