Andy enters into a contract with John to redecorate his New York penthouse. John
ID: 2747898 • Letter: A
Question
Andy enters into a contract with John to redecorate his New York penthouse. John sets to work immediately. He install new wallpaper and lighting in Andy's house, and paint a mural of little cherubs on his dining room ceiling. Shortly thereafter, Andy breaches the agreement by refusing to pay for anything. John has spent $10,000 including labor on the installation of the wallpaper, lighting and mural, and the market value of these items is $15,000. The total redecorating contract was for $50,000.
(A) Assume that John cannot estimate with specificity what his cost of the completion would have been. If John sues, what damages can he collect? Explain.
(B) Now assume that the total contract price was $12,000. How much may John recover?
(C) Now assume that John has fully performed under the contract, and Andy has refused to pay anything. John spent $25,000 to perform. The market value of the new decor is $60,000. The total contract price was $50,000. What damages can John recover?
Explanation / Answer
(A) the primary remedy in this case expectation damages or benefit of the bargain. If John sues, he can collect the damages to the extent of the fair market value of the work that he has completed, which is $15000.
(B) In this case, John may recover damages to the extent of the contract value, i.e $ 12,000.
(C) In this case, As a remedy for promissory Estoppel, John may recover reliance damages upto the extent of the promise, ie. contract price only which is $ 50,000 .