- Pages: 2
- Word count: 475
- Category: Contract
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In our case of National Drilling Company filing suit against Overland Transport, Inc. asking compensatory, consequential, and punitive damages, the recovery of National will be based on Quasi Contract. As one reads through the scenario, he or she may ask themselves a few questions. What were the exact terms of the contract between National Drilling and Overland Transport? Did National Drilling have in writing or inform Overland how they (Overland) would know when the pump’s repairs were complete? This is significant in that if American Hydraulic or National Drilling knew the pump was repaired, but didn’t inform Overland Transport, how could Overland be held liable? Was it American Hydraulics duty to inform National Drilling or Overland Transport the pump was ready? Lastly, what party was in charge of alerting Overland the pump was ready? These are just a few questions one may ask. Since no terms like this were mentioned in the paragraph, one has to assume no actual contract exists.
Our text book tells us that in some situations, when no actual contract exists, a court may step in to prevent one party from being unjustly enriched at the expense of another party. This seems to be the situation set up by the agreement between National Drilling and Overland Transport. National Drilling is seeking compensatory, consequential, and punitive damages. Let’s take a look at what it takes for parties that are involved with disagreements such as ours to receive these types of damages in a court of law. Compensatory damages are damages that compensate the nonbreaching party for the loss of the bargain (Miller & Hollowell, 2011). These damages are equivalent to the damages sustained by the aggrieved party.
Consequential damages are special damages that compensate for the loss that is not direct or immediate (Miller & Hollowell). Our text book tells us these special damages must have been reasonably foreseeable at the time the breach occurred. Punitive damages are designed to punish and make an example of a wrongdoer for the purpose of deterring similar conduct in the future (Miller & Hollowell). As our text book tells us, these damages are usually awarded only in cases involving willful or malicious misconduct. I believe unless National Drilling can provide proof, and show what the performance of the act promised in the contract was, (specific performance) ir will be hard for them to recover. One could view this as, if Overland Transport was not informed of the specific consequences of returning the pump back late, National Drilling will not be able to recover anything. While it would seem that Overland Transport is totally wrong for delaying the return of the pump for five days, National Drilling’s recovery seems to fall under recovery based on Quasi Contract.
Miller, R., & Hollowell, W. E. (2011). Business law: Text & exercises.