rambleon65 wrote:In a breach of an Option Contract (that is, w/ consideration), I understand the non-breaching party will likely get expectancy since the breach of an Option Contract is a breach of an express contract.
But exactly how is that measured?
It appears the only expected value of the option contract is the value of expectancy under the secondary (main) contract.... but seems like a stretch?
I pay $10 to keep your offer for a movie deal open (Option K). You revoke the deal. Would I get whatever I would have gotten through the movie deal even though the movie deal itself is a secondary contract?
NVM: Per Prof, you get specific performance.
A breach of an option K is almost always going to be because I wanted to exercise that option to get at whatever I paid for to keep whatever open. If not well then the other guy gets to keep my $ if I choose not to exercise the option within the time limit.
The damages is going to depend upon what the subject matter of the K was for. So simple example. Let's say it was for idk some widgets that were going at $50 overall. Now we're gonna measure this with expectation damages. I'm going to either cover or receive the market differential between the widgets that were going at $50 and whatever substitute I can find. Out of that we're going to subtract already the costs I paid for the option K as this is costs I would have had to already sustain if I wanted my widgets. What this means for our case is we're not getting the $ we paid for the option K back.
This all ties back to the purpose of damages which is to put the injured party in as good a position as he would've been if the deal had gone through.
Edit. Didn't see you were talking about a movie deal. It's not so easy as specific performance. There's issues when it comes to a personal service contract and depending upon if the deal would have to include some sorta of personal service (i.e. maybe the offeror has to play in how to direct or manage the movie) the court would not order specific performance.
Actually most likely, the court will interpret the breach as entitling you to the full benefit of your bargain. In Parker v. 20th Century Fox, the court found there to be no equivalent substitute for something like a movie deal and found that the injured party had no duty to mitigate by accepting a lesser and inferior role. As a result, they awarded her the FULL amount she would've earned from the movie deal from doing absolutely nothing but sitting on her ass.