User:Nkimmett1/sandbox

Scenario:
A low-income school in the Boston area signed a three-year contract to use a start-up's services. The start-up company would provide access to our full arsenal of college prep services in exchange for three annual payments. After the first year, the school decided to continue using, but not pay for the final two years of the start-up's services.

Answer in IRAC Form:
ISSUE: Can damages be rewarded for this breach of contract?

RULE: Generally, a breach of contract is a failure of one of the parties to “perform any promise that forms all or part of the contract.” If a breach of contract takes place, the innocent party has a right to be awarded damages for the breach. These damages can be classified as compensatory or consequential. Compensatory damages make up for the loss that the non-breaching party “incurred as a result of the breach of contract.” Consequential damages are those that arise as an indirect result and can be recovered, “so long as they were foreseeable to the breaching party.” Remedies to these damages can take the form of money, specific performances, rescission, liquidation, and other unique remedies. Money is the most typical form.

ANALYSIS: Here, we see that there has been a breach in contract and that there is harm to the start-up as a direct result of the school’s breach of contract. Two years of potential payment are being taken away by the breaching party, thus leaving the start-up without payment and flexibility.

CONCLUSION: Therefore, compensatory damages, most likely in the form of a monetary payment, should be rewarded to the start-up. The reward should be able to completely cover or mitigate the losses caused by the school.

Neutral Voice:
When looking at a case where a party claims a breach of damages, you must answer a few questions before deciding on whether or not damages need to be rewarded:

1. Did a contract exist?

2. If so, what did the contract require from each of the parties?

3. Was the contract modified at any point?

4. Did the claimed breach of contract occur?

5. If so, was the breach material to the contract?

6. Does the breaching party have a legal defense to enforcement of the contract?

7. What damages were caused by the breach?

Going through these questions, it is clear that the Boston school has breached their contract with the start-up. From here damages are awarded to the innocent party that covers the loss “directly and necessarily”. The determination of how much is to be rewarded is left to the discretion of the court. Ultimately their goal is to put both parties in the positions they would have been in if the contract was carried out without a breach. In this instance, it is reasonable that the school would be required to pay the remaining two years of the contract to the start-up.