Introduction
In an ideal world, business contracts would be entered, all parties would benefit and be thrilled with the outcome, and no dispute would arise. However, things are different because of breaches of contracts and other issues. The contract between Twin Creeks and JVC was marked with issues because of the breach by JVC. After entering into a contract with Twin Creeks, JVC breached the deal by refusing to accept the cassettes it had agreed upon. Twin Creek sued JVC and demanded damage interest, including the money it owes Paramount. However, JVC claimed that Twin Creek is not entitled to the damages. Therefore, JVC will succeed in having the claim dismissed because of a lack of enough details.
Expectation Interest
Twin Creeks will receive its expectation interest if the court orders JVC to pay Twin Creeks the full amount of money under the contract. The term “expectation interest” refers to the fact that the real value of a contract to a company is limited to the loss already incurred as a result of a contract violation. When one party breaches a contract, it is important that the other party receives expected damages. The main intention of giving expectation interest is to return Twin Creeks to a position it would have been if the contract would not be breached. Twin Creeks agreed with Paramount because of the contract they made earlier on with JVC. Therefore, allowing Twin Creeks to get the full amount of money as per the contract would take the company to a situation prior to the breach.
Reliance Interest
Twin Creeks made a claim for damages like the amount it owed Paramount, which is $600,000. The $600,000 interest is considered reliance interest because it was framed from the reliance of Twin Creeks on JVC. Reliability interest is often used when it is challenging to envisage the benefits that would have been achieved if the contract was not violated. The interest is awarded for losses experienced in reasonable reliance on a promise. In this situation, if the interest is granted, Twin Creeks would recover lost expenditure on the contract’s performance. In the case study, Twin Creeks’ profit would have been made if the contract remained is not provided. The reliance interest would restore Twin Creeks to its original position occupied before it acted in reasonable reliance on the promise.
Specific Performance
The court would use specific performance as a legal remedy to a case. Specific performance is a remedy that courts use when there is no other remedy available, such as money, to effectively reward the other party. In the case of Twin Creeks and JVC, specific performance would not be considered because the subject of the contract, which is cassettes, is not unique. There exist a variety of cassettes available in the market that can be accessed. In addition, specific performance is not considered because the case is merely about money. Twin Creeks’ argument, in this case, is the money it claims to owe Paramount. The court would not be able to consider the concept of specific performance because the cassettes are not unique, and the case presented major on money.
Consequential Damages
In the case of Twin Creeks and JVC, consequential damages do not enter into consideration. Consequential damages are losses that do not flow directly and immediately from the act. From the case, Twin Creeks only entered into an agreement with paramount to buy a minimum of $600,000 worth of cassettes. However, it is not indicated that they had already bought the cassettes. The damages that Twin Creeks claimed would be direct if the company would have bought the cassettes from Paramount. With the situation, it is possible for the company to negotiate with Paramount and inform them about the changes in the intended agreement.
JVC will be successful in having the claim dismissed because there is no causal relationship between the breach and the claim. Specific performance and consequential damages do not support the claims made by Twin Creeks on the amount it owes Paramount. There is no direct relationship between the breach of contract and the alleged claims in terms of consequential damages. There is no direct monetary loss because of the breach. The situation can be solved through negotiation to make sure that both parties agree on a common solution. The two parties involved should discuss and negotiate using the most appropriate strategy to solve the situation.
In the case scenario, Twin Creek is claiming consequential damages for losses incurred as a result of entering into an arrangement with Paramount following the contract it signed with JVC. Only those damages incurred by the plaintiff because of the injured party’s unusual circumstances are reimbursed, given that the defendant should have foreseen or was informed of such circumstances at the time of contract. However, the plaintiff does not offer enough details to the fact finder to estimate the damages. It is challenging to determine whether the breach had direct damage to the plaintiff. Therefore, JVC will succeed in having the claim dismissed because the plaintiff cannot substantiate the claims.