Next Generation Bar Exam Quiz
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CONTRACTS
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Petra, a wedding planner, contracted to plan a corporate retreat for a fee of $12,000. The client repudiated after Petra had (i) paid $3,500 in nonrefundable deposits to a caterer, (ii) paid $2,000 to a graphic designer for printed programs, (iii) spent 60 hours of her own time, billed at $150/hour, on planning, and (iv) declined another client who would have paid her $7,000. Petra cannot prove lost profits on the corporate retreat with reasonable certainty. She sues for reliance damages. In Carew v. Biltmore, the court held:
'A plaintiff who cannot prove lost profits with reasonable certainty may elect reliance damages. Reliance damages are limited to out-of-pocket expenditures made in reasonable reliance on the contract. They do not include the value of the plaintiff's own time or labor, and they do not include profits that the plaintiff would have earned from other engagements. The plaintiff must show that the expenditures were caused by the contract and were not expenditures she would have made regardless.'
What is the maximum amount of reliance damages Petra may recover?
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