A contract breach happens when one of the parties in the contract does not follow the terms and conditions set within the contract. Based on the clip, Spud’s emergency is insufficient to excuse him from contractual obligations without liability. According to the Unfair Contract Terms Act, 1977 (UCTA), liability can only be excluded from a contract if the clause is reasonable and fair (Clarkson et al., 2018). Spud’s emergency is associated with fraud and has breached all contractual duties leaving Oscar with no meaningful remedy.
Oscar, the store manager, now has the authority to seek compensatory damages, consequential damages, and punitive damages. Oscar calls for compensatory damages due to an incomplete contract and general costs incurred to complete the future job, accumulating to $3000. Consequential damage is caused by special circumstances, which lead to additional losses. Since Spud is aware of the additional losses, Oscar might incur the delayed movement of merchandise and costs while looking for a new contractor legally; Oscar, as the non-breaching party, might recover consequential damages. The punitive damages are also available since Spud openly asks for a fraudulent double increase of payments. This action is both a breach of contract and a tort designed to deter future actions.
Vinny, the assistant manager, is calling for a compensatory damage remedy to cover the loss due to Spud’s breach of contract. The remedy includes refunding the advance salary and reimbursing the consequential damage of $3000 due to the breach of contract. Legally courts in an employment contract would grant the remedy.
The mitigation doctrine requires the wronged party to make reasonable efforts to minimize the losses and damages caused by the breached party. This doctrine helps both parties from an excessive accumulation of damages. The doctrine of mitigation of damages applies to Oscar as he appoints Vinny, his assistant manager, to immediately take over the contractors’ job under carpentry with only knowledge of the woodshop. This is mitigation based on fairness and common sense to reduce losses. Instead of failing to move $5000 merchandise, Oscar quickly recovers through his assistant. The value of the damage is a balanced process that might lead to the plaintiff settling the remained incurred losses.
Reference
Clarkson, K. W., Miller, R. L., & Cross, F. B. (2018). Business Law: Text and cases. (14th ed.). Cengage Learning.