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Contract law
Formation
Capacity Offer and acceptance Meeting of the minds Abstraction principle Posting rule Mirror image rule Invitation to treat Firm offer Consideration Implication-in-fact Collateral contract
Defences
Misrepresentation Mistake Threats and unequal bargaining power Illegality and public policy Unconscionability Culpa in contrahendo Force majeure Frustration of purpose Impossibility Impracticability Hardship Set-off Illusory promise Statute of frauds Non est factum Unclean hands Accord and satisfaction Exculpatory clause
Interpretation
Parol evidence Contract of adhesion Integration clause Contra proferentem UNIDROIT Principles
Dispute resolution
Choice of law clause Forum selection clause Hague Choice of Court Convention Arbitration New York Convention UNCITRAL Model Law Mediation Singapore Mediation Convention Enforcement of foreign judgments Hague Judgments Convention
Rights of third parties
Privity of contract Assignment Delegation Novation Third-party beneficiary
Breach of contract
Anticipatory repudiation Cover Exclusion clause Efficient breach Deviation Fundamental breach
Remedies
Specific performance Money damages Liquidated, stipulated, or penal damages Rescission
Quasi-contractual obligations
Promissory estoppel Quantum meruit Unjust enrichment Restitution Negotiorum gestio
Duties of parties
Duty of honest contractual performance (or doctrine of abuse of rights) Duty of good faith (also implied covenant of good faith and fair dealing or duty to negotiate in good faith) Contract A and Contract B in Canadian contract law
Related areas of law
Conflict of laws Commercial law
By jurisdiction
Australia Canada China (mainland) Ireland India Saudi Arabia United Kingdom England and Wales Scotland United States
Other law areas
Tort law Property law Wills, trusts, and estates Criminal law Evidence
Notes
1 Specific to common law jurisdictions 2 Specific to civil and mixed law jurisdictions 3 Historically restricted in common law jurisdictions but generally accepted elsewhere; availability varies between contemporary common law jurisdictions 4 Specific to the German Bürgerliches Gesetzbuch and other civil codes based on the pandectist tradition 5 Explicitly rejected by the UNIDROIT Principles of International Commercial Contracts 6 Specific to Canadian contract law both in Québec and in the country's common law provinces 7 Specific to civil law jurisdictions, the American Uniform Commercial Code, and Canadian jurisprudence in both Québec and the common law provinces pertaining to contractual and pre-contractual negotiation
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Cover is a term used in the law of contracts to describe a remedy available to a buyer who has received an anticipatory repudiation of a contract for the receipt of goods. Under the Uniform Commercial Code, the buyer is permitted (but not required) to find another source of the same type of goods. The buyer may then file a lawsuit against the breaching seller to recover the difference, if any, between the cost of the goods offered and the cost of the goods actually purchased.

The possibility of cover will prevent a party from being able to sue for specific performance, which is an equitable remedy that requires the buyer have no adequate remedy at law. If the buyer is able to buy elsewhere and sue for the difference, that provides an adequate remedy. This prohibition does not apply, however, to the sale of unique goods such as original works of art, collectibles, real estate, and exclusive rights.

Judge Richard Posner has suggested that the availability of cover allows for efficient breach - that is, that it encourages the most efficient allocation of resources by allowing a seller to breach a contract to sell goods to one buyer when another, more lucrative opportunity comes along. The seller may thus be able to realize a sufficiently increased profit to make more money even after repaying the difference to the original buyer. Therefore, no value is lost in the transaction because the original buyer is in the same position he would have been in but for the breach, and the seller is in a better position.

References

1. Uniform Commercial Code, section 2-712.
2. Gregg, John T.; Mears, Patrick E. (2006). Auto Supplier Insolvencies and Bankruptcies: Issues for Suppliers and Customers of Financially Troubled Auto Suppliers. American Bankruptcy Institute. p. 63. ISBN 9780978529246. Retrieved February 5, 2024.

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