In-Class Exercise: Damages Calculation

This class meeting may include a damages-calculation exercise. The professor decides each semester whether the exercise runs in class, as a take-home prompt, or not at all. Any work submitted counts toward Class Participation. There is no separate grade for the exercise.

What the lab does

The remedies chapters teach the doctrine; this lab makes you compute the number. The prompt gives a supply contract that breaks down mid-term: a buyer who covered at a higher price, a foreseeable consequential loss flagged by a pre-breach warning, and a mitigation question. You produce a one-page memo in four sections — direct cover-price damages, foreseeable consequentials, mitigation, and a total with the strongest counter-argument and your reply.

The skills

Direct damages are the cover differential: the difference between the cover price and the contract price, times the quantity, for the remaining term (UCC § 2-712). Consequential damages turn on Hadley v. Baxendale — here the test is factual, not doctrinal: was the loss communicated, and was it therefore foreseeable? Mitigation operates as both a limit on recovery and a planning tool. The counter-argument is the part most students skip: a memo that states a recovery figure without surfacing what the defendant would say in response has not done the work the exam tests.

What you should be able to do

Run the four-section structure cold: compute the cover differential, identify the notice fact that makes a consequential loss foreseeable, apply the mitigation limit, and total it — then write the strongest counter and answer it. This is the Spring capstone artifact and the exam in miniature. Practice it in the weeks before the final.