10 - Remedies

Question 1

What is the purpose of an award of damages in a breach of contract case?

Answer 1

• The aim of an award of damages for breach of contract is to compensate the claimant for the damage, loss or injury they have suffered as a result of the defendant’s breach.
• This means putting the innocent party in the same position post-breach that they should have been in had the contract been performed.
• It is not intended to punish the defendant or recoup any benefit gained from the breach.
• If the claimant suffers no loss from a breach, nominal damages (e.g., £10) may be awarded to acknowledge the contract’s breach.
• Substantial damages aim to compensate the claimant for actual loss, necessitating proof that the loss resulted from the specific breach.
• This is the main remedy for breach.

Example: If a garage fitted defective brakes causing a crash, the claimant must demonstrate that the defective brakes, not reckless driving, caused the loss.

Question 2

How do we identify the loss resulting from a breach of contract?

Answer 2

The normal rule is to compare the claimant’s position after the breach with where they would have been if the contract had been properly performed.

This is because the breach deprives the claimant of the expected benefits from the contract’s performance.

Example 1: Ayesha sold a Ming vase to Barbara for £50,000, which turned out to be a copy worth £1,000. Had it been genuine, it would have been worth £60,000. Barbara would likely receive £59,000 in damages.
Example 2: Carol ordered goods for £1,000, which David failed to deliver. Carol had to buy similar goods for £1,200, so she may receive £200 in damages.
Example 3: Fields plc delivered goods to Esher & Co, who refused them, causing Fields plc to sell elsewhere for only £2,500 instead of £8,000. They may receive £5,500 in damages.
Example 4: Jason was hired for £250 but was told to stop before he could work. He may claim £220 for lost profit after expenses, as this was the amount of profit he was due to make.

Question 3

What is the difference between expectation loss and reliance loss in contract law?

Answer 3

The normal rule in contract is to look at the claimant’s position ‘as it is’, and compare it with the position the claimant would have been in if the contract was performed.

Expectation loss refers to the loss of the full benefit of the bargain, comparing the claimant’s current position with the position if the contract had been performed correctly. This is because the claimant has lost the full benefit of the bargain they struck.

Reliance loss involves claiming for expenses incurred based on the expectation that the contract would be performed, especially when profits are speculative. The circumstances in which a party claims reliance loss may arise where the profits they hope will materialise from the contract are too speculative.

Example: In Anglia Television v Reed, Anglia claimed all wasted expenditure when a leading actor refused to perform. The court awarded the costs incurred before the contract because profit was uncertain.

Question 4

What are pecuniary and non-pecuniary losses in contract law?

Answer 4

Pecuniary losses are easily translated into financial terms, such as lost profits or property damage. They are the consequences of breach that can be remedied by an award of damages.

Non-pecuniary losses cannot be readily assessed financially, including physical inconvenience or pain and suffering. These losses are more arbitrary in compensation amounts.
Non-pecuniary losses are less common in contract cases and can usually only be claimed in limited circumstances.

Example: In Jarvis v Swans Tours, Mr. Jarvis claimed damages for loss of enjoyment after a disastrous holiday, leading to a £125 award due to the failure of the holiday to meet its description. This was a non-pecuniary loss.

Question 5

What is the principle of remoteness of damage in contract law?

Answer 5

While the defendant should compensate the claimant for all losses suffered, some losses may be too improbable or unpredictable, making it unfair to hold the defendant responsible.

Lawyers refer to this issue as ‘remoteness’ of loss.

Example: If Rudi sold a camera with a one-year guarantee, he may reasonably expect to pay for repairs if it breaks. However, if the buyer lost £2,000 in profit from a wedding shoot because the camera broke, that loss would be too remote to claim.

Remoteness hinges on whether a particular loss would have been in the reasonable contemplation of the parties at the time of the contract, i.e., if the defendant knew of the special circumstances making the loss a likely consequence of the breach. If the loss is a natural consequence of the breach, the parties are deemed to have contemplated it.

Example: In Parsons (Livestock) Ltd v Uttley Ingham, the death of pigs due to a defective hopper was not considered too remote, as illness would have been within the parties’ contemplation at the contract’s formation.

Question 6

What is the principle of mitigation of loss in contract law?

Answer 6

Mitigation of loss refers to the claimant’s duty to take reasonable steps to reduce the loss caused by a breach of contract. Losses attributable to failure to mitigate are not recoverable.

The claimant cannot simply sit back and allow losses to accumulate, expecting to pass these costs onto the defendant by claiming damages.

The question of what steps are ‘reasonable’ is one of fact. In Pilkington v Wood [1953] CH 770, it was held that there was no expectation that the claimant should embark on ‘a complicated and difficult piece of litigation’ in order to minimise the effects of the defendant’s breach.

Examples:
- Sheila should look for alternative employment after being dismissed in breach of contract.
- Nasser should immediately seek to buy similar goods elsewhere after Ellery refuses to deliver goods.
- Arjuna should attempt to sell the goods in the marketplace when Pauline refuses delivery.
- Elnora, after Hugh abandons a painting job, should obtain several quotations and hire someone else to finish at a reasonable price.

While this may seem harsh on the claimant:
- The defendant carries the burden of proving the claimant failed to mitigate their loss.
- Even if reasonable attempts to mitigate fail or increase the loss, the claimant can still claim for their loss.
- What constitutes reasonable steps is a question of fact determined by the court.

Question 7

What is the test for causation in contract law and what is it relevant to?

Answer 7

The claimant must establish a causal link between the defendant’s breach of contract and its loss in order to recover damages.

This means assessing:

(a) Whether in fact the breach by the defendant has caused the loss suffered by the claimant (known as factual causation); and also
(b) Whether as a matter of law the defendant should be held responsible for it (legal causation).

Factual causation - In contract the courts have treated the determination of factual causation in a broad way, advocating a ‘common sense approach.’ The court in Galoo suggested that the defendant’s breach should be a ‘dominant’ or ‘effective’ cause of the loss if that loss is to be recoverable.

Legal causation - Even if factual causation is established, the claim will fail if legal causation is not established, in particular if there is a novus actus interveniens – a particular category of intervening event which will be treated as having broken the chain of causation.

Question 8

How is quantification of damages carried out in breach of contract cases?

Answer 8

Quantification of damages involves measuring the loss and translating it into financial terms.

For defective work, the usual measure is the cost of reinstatement or ‘cost of cure’.

For defective goods, the starting point is the difference in value between the goods as they are and as they were expected to be.

In some cases, working out how to ‘put the claimant in the same position as they would have been if the contract had been properly performed’ can be complex.

Example: Ruxley Electronics v Forsyth
- Ruxley built a swimming pool that was shallower than specified.
- The House of Lords ruled that the cost of cure (£21,560) was unreasonable given the minimal benefit to Mr Forsyth, so they awarded £2,500 instead.
- This was based on the ‘loss of amenity’ or ‘consumer surplus’ experienced by Mr Forsyth due to his personal preference for a deeper pool.
- If the pool had a more critical purpose or the defect caused significant issues, Mr Forsyth might have received the full cost of cure.

Question 9

What are the three key methods for calculating expectation interest in contracts involving defective works?

Answer 9

1. Cost of cure.
2. Diminution in value.
3. Loss of Amenity.

Question 10

What is the cost of cure method for calculating expectation interest in defective works cases?

Answer 10

The cost of cure is the usual method of calculating expectation interest in contracts involving defective works, such as when a building is not constructed to contract specifications.

This method represents the cost of substitute or remedial work required to put the claimant in the position they would have been in had the contract been properly performed.

Example: In Birse Construction Ltd v Eastern Telegraph Co Ltd [2004], the cost of cure was applied.

Claimants must act reasonably regarding defective works. In McGlinn v Waltham Contractors [2007], the claimant acted unreasonably by demolishing and rebuilding an entire property for aesthetic reasons. The court limited the award to the costs of remedying the defects in the original building.

Question 11

What is the diminution in value method for calculating expectation interest in defective works cases?

Answer 11

Diminution in value is an alternative method for calculating a claimant’s expectation interest by measuring the difference in value between the performance received and that promised in the contract.

Example: In Ruxley, the diminution in value was £0, as the pool’s value was the same whether it was 6 feet or 7½ feet deep.

However, the court did not apply this approach to valuation in Ruxley.

Question 12

What is the loss of amenity method for calculating expectation interest in defective works cases?

Answer 12

Loss of amenity is an alternative to the cost of cure and diminution in value methods when neither is appropriate for assessing expectation interest.

Example: In Ruxley, the court awarded £2,500 in loss of amenity damages, reflecting the non-economic loss of pleasure suffered by the claimant from not receiving the pool he contracted for.

The loss of amenity measure recognises the court’s acceptance that a consumer should have a remedy even when the loss is not economic but still has value to them.

In commercial settings, damages for loss of amenity are generally not awarded, as seen in Regus (UK) Ltd v Epcot Solutions Ltd [2007], where it was noted that it would be “unusual, if not impossible” for such damages to apply.

Question 13

What is the distinction between specified damages clauses and penalty clauses in contract law, and how does the court decide which type of clause is engaged in the contract?

Answer 13

A specified (or liquidated) damages clause is a genuine pre-estimate of the loss likely to be caused by a breach, binding the parties to a fixed sum regardless of the actual loss.

A penalty clause is an attempt to pressure the party to perform the contract, stipulating an extravagant or disproportionate amount, and is unenforceable.

Specified damages clause:
- The amount specified will be paid, and normal rules of measure of damages, remoteness, and mitigation do not apply.

Penalty clause:
- If deemed a penalty, the court will assess damages using standard rules, and the clause is not binding.

Case law: The Supreme Court stated that a penalty rule is engaged only if the clause imposes an exorbitant alternative to ordinary damages.
The test is whether the clause imposes a detriment out of proportion to the legitimate interest of the innocent party.
In ParkingEye v Beavis, the £85 fee for overstaying in a car park was upheld because it served the legitimate interest of regulating the car park, despite not being a pre-estimate of loss.

Question 14

Provide a summary of damages for breach of contract.

Answer 14

• Damages are available for all breaches of contract. If there has been no loss the
  claimant will be awarded only nominal damages.
• The aim of damages is loss of expectation, ie to put the claimant, as far as money can do it, in the position the claimant expected to be in if the contract had been properly performed.
• Most types of loss are recoverable, although damages for distress/ disappointment only
  tend to be awarded where the main purpose of the contract was to provide pleasure or peace of mind.
• The type of loss must not be too remote, ie it must be a natural consequence of the breach or otherwise the defendant must have known at the time of the contract of special circumstances making the loss a likely consequence of the breach.
• The usual measures of loss are difference in value and cost of cure. However, damages
  have been awarded for loss of amenity where there was no difference in value and the cost of cure was deemed out of all proportion to the loss sustained.
• Claimants must take reasonable steps to mitigate their loss.

Parties to commercial contracts may agree in advance the amount of damages
payable in the event of a particular breach.
- Specified (liquidated) damages clauses are
enforceable and the specified amount is what the claimant will be awarded whatever
their actual loss.
Penalty clauses, on the other hand, are unenforceable and damages will
be assessed in the usual way

Question 15

What is an action for an agreed sum in contract law, and when is it used?

Answer 15

An action for an agreed sum, also called an action in debt or an action for the price, is a remedy where the claimant sues for a fixed amount of money that is owed under a contract.

This is normally the price for goods or services supplied.

It is a more direct remedy than a claim for damages because the claimant does not need to prove loss or show that it is not too remote.

The key requirements are:
- Money must be owed; and
- The date for payment must have fallen due.

Once the claimant establishes their right to the money, they can claim it, plus accrued interest for late payment.

Question 16

What is specific performance in contract law, and under what circumstances is it granted?

Answer 16

Specific performance is an equitable remedy where the claimant asks the court to require the defendant to perform their obligations under the contract, rather than seeking compensation.

It is generally only available if damages are not an adequate remedy, such as in cases involving contracts for the sale of land.

Example: Claire has exchanged contracts to buy a specific house, but the seller is refusing to transfer it. Claire could seek damages but may instead seek a court order for specific performance, as she wants that particular house, not just a replacement.

Specific performance is rarely available for contracts involving goods, as damages can typically be used to buy similar goods elsewhere.
It is also generally not granted for contracts involving personal services, such as employment contracts, because these depend on trust and confidence between the parties.

As an equitable remedy, specific performance is not available ‘as of right’ and will only be granted if it is just and equitable. The court will also consider whether granting it would cause disproportionate hardship to the defendant

Breach of this can be treated as contempt of court and lead to imprisonment.

Question 17

What is an injunction in contract law, and when can it be granted?

Answer 17

An injunction is an equitable remedy used to restrain the defendant from doing something they have agreed not to do under the contract.

Like specific performance, an injunction is only available at the discretion of the court and when damages would be inadequate.

Example: Reya has sold her hairdressing business and agreed with the buyer that she will not set up another hairdresser’s in the same village. If she tries to open a new business in the village, the buyer could seek an injunction to stop her from breaching this agreement.

However, an injunction will not be granted if it would effectively force the defendant to do something that specific performance could not require, such as forcing someone to work for a particular employer.

Question 18

What is the principle of restitution in contract law, and when might a claim in restitution arise?

Answer 18

Restitution in contract law seeks to prevent one party from being unjustly enriched at the expense of the other party.

A claim in restitution may arise in a number of situations, including:
- Where money has been paid under a contract and there has been a total failure of consideration; and
- Where one party has done work or supplied goods to the other and seeks compensation for the work done or goods delivered.

It is important to note that a claim in restitution is not available in every case where there has been an element of unjust enrichment.

Question 19

When can a payer recover money paid under a contract due to a total failure of consideration?

Answer 19

A payer can bring an action in restitution to recover money paid under a contract if:
- The payee is in breach of contract, and
- There has been a total failure of consideration,
which means that the payee has not done any part of what they were supposed to do under the contract.

If the payer has received nothing in return for their money, they can recover the amount paid.

Example: If Bill pays £800 in advance to get his house painted but the painter does not turn up, Bill can claim restitution to recover the £800.
However, if the painter starts the job and then abandons it, this would not amount to a total failure of consideration, so Bill’s only remedy would be damages for the additional amount he would have to pay a new painter to finish the work.

Question 20

How does restitution apply when compensation is sought for work done or goods supplied, and the contract has been broken?

Answer 20

Where one party has supplied goods or done work and the other party breaches the contract, the party supplying the goods or doing the work may bring a claim in restitution for a reasonable sum for the work done or goods supplied.

This would be an alternative to a claim for damages, and the supplier has a choice between claiming a reasonable sum or damages (i.e. net loss of profit on the project).

Example: If Gavin agrees to build a garage for Ray and does some work, but Ray breaches the contract by telling Gavin to stop because he no longer wants the garage, Gavin can sue for damages or bring a claim in restitution to receive a reasonable sum for the work he did.

Question 21

How can restitution apply in cases where a contract was never formed but work was done?

Answer 21

• Restitution can apply where a party does work before a contract is finalised.
• This often occurs in situations where negotiations are complex and time-consuming, but there is a desire to start work as soon as possible.
• If no contract is ultimately formed, the party who did the work would be entitled to a reasonable sum for the work they have done.

Example: In British Steel Corp v Cleveland Bridge and Engineering Co Ltd, the claimants were entitled to recover a reasonable sum for the work they had done after negotiations broke down and no contract was finalised.

Question 22

What are restitutionary damages, and when might they be awarded in contract law?

Answer 22

Restitutionary damages are awarded based on the gains made by the defendant, rather than the loss suffered by the claimant.

This approach is exceptional and is outside the strict principles of restitution, which are generally concerned with preventing unjust enrichment at the claimant’s expense.

Example: In Attorney-General v Blake, the court awarded the Crown the profits from Blake’s book, even though the Crown had suffered no financial loss from the publication. The court found it appropriate to award the profits as a just response to Blake’s breach of his undertaking, even though the information was no longer confidential.

Question 23

What are negotiating damages, and when might they be awarded?

Answer 23

Negotiating damages compensate for the loss of the opportunity to negotiate a release fee, rather than compensating for actual financial loss.

They are awarded where the claimant has suffered no discernible financial loss, but it would be unfair to allow the defendant to take the full benefit of their breach of contract. It is not available where there is a loss of business, for example.

Example: In Wrotham Park Estate v Parkside Homes:
- The land acquired by Parkside Homes was subject to a restrictive covenant. Parkside nevertheless built on the land, in breach, making a profit.
- Wrotham had lost the chance to negotiate a fee for relaxing the restrictive covenant.
Wrotham Park Estate was awarded damages based on the value of the opportunity lost to negotiate a fee for relaxing a restrictive covenant.
- The development had caused no diminution in the value of the land owned by Wrotham Park Estate, but they had lost the chance to negotiate a fee.
- The damages awarded were calculated as 5% of the developer’s profit.

Negotiating damages should only be awarded where the only loss is the opportunity to negotiate a release fee, not where the claimant has suffered clear financial loss.

Question 24

What are the types of loss with special rules in breach of contract cases?

Answer 24

The aim of damages for breach of contract is to compensate the claimant for the damage, loss, or injury they have suffered due to the defendant’s breach.
Usually, damages aim to put the defendant in the position they would have been in if the contract had been performed.

The court has developed specific rules for certain types of loss:
- Loss of reputation
- Loss of chance
- Mental distress

Question 25

When are damages awarded for mental distress in breach of contract cases?

Answer 25

The general rule is that damages are not awarded for mental distress, anguish, or annoyance caused by a breach of contract, as held in Addis v Gramophone Co Ltd [1909].

An exception applies when the whole purpose of the contract was to provide pleasure, relaxation, or peace of mind, as in Jarvis v Swan Tours [1973].

In Farley v Skinner (No. 2) [2001], the House of Lords extended this to situations where a major object of the contract was to provide pleasure, relaxation, or peace of mind, allowing for non-pecuniary loss (such as loss of amenity). This was moving on from the position in Jarvis v Swann where damages were awarded only where the whole object of the contract was pleasure, relaxation and peace of mind

Question 26

When are damages awarded for loss of chance in breach of contract cases?

Answer 26

Loss of chance is recoverable if it is quantifiable in monetary terms and if there was a real and substantial chance the opportunity could have materialised.

The courts are reluctant to dismiss claims as too speculative and may award damages based on expectation interest, as in Chaplin v Hicks [1911], where the claimant was compensated for losing the chance of winning a competition.

The loss is typically assessed as a percentage below 50%, and it must be real and substantial as reaffirmed in Allied Maples Group v Simmons & Simmons [1995] and Perry v Raleys Solicitors [2019].

If the chance of obtaining a benefit is 50% or greater, the claimant should seek to recover their expectation loss in full.

Question 27

What is the rule regarding damages for loss of reputation in breach of contract cases?

Answer 27

The general rule is that damages are not awarded for loss of reputation.

An exception exists where there is an implied term of trust and confidence in employment contracts, as in Malik v Bank of Credit and Commerce International [1998]:
- In that case, the House of Lords found that the claimant had grounds for action against the employer due to financial loss caused by the adverse effect on their employment prospects resulting from the way the employer ran its business.
- Damages were awarded but limited to the claimant’s financial loss due to the inability to obtain alternative employment.

Question 28

What is the principle of a contract of guarantee, and what are its key features?

Answer 28

A contract of guarantee is an agreement where one person (the guarantor) guarantees that if another person (the debtor) does not pay back money owed, the guarantor will pay the money instead.

Key features include:
- It is a secondary obligation, meaning the guarantor agrees to discharge the debt only if the debtor defaults.
- Evidenced in writing: Contracts of guarantee must be evidenced in writing to be valid. This does not mean the contract itself must be written, but there must be written evidence of the transaction signed by the guarantor.
- The written evidence must have existed before the creditor seeks to enforce the contract and may comprise a series of documents linked by reference.

Question 29

What is an indemnity, and how does it differ from a guarantee?

Answer 29

An indemnity creates a primary obligation, where one party promises to reimburse the other party pound-for-pound for a specific loss arising under the contract.

Key differences from a guarantee:
- Unlike guarantees, indemnities do not need to be evidenced in writing.
- Indemnities are often used in commercial transactions, such as business acquisitions or land purchases, to allocate known specific liabilities or losses.
- Example: If a buyer discovers land contamination costing £100,000 to clean up, they could seek an indemnity for £100,000, meaning the seller would reimburse the amount as required.

Indemnities allocate known liabilities, while guarantees are secondary obligations to pay if the debtor defaults.

Question 30

How does the difference between guarantees and indemnities impact their practical application?

Answer 30

Guarantees are secondary obligations and are only triggered if the debtor defaults, whereas indemnities are primary obligations, meaning the party gives a personal undertaking to pay regardless of the debtor’s performance.

Example:
- A guarantee: “Let him have the goods. If he does not pay you, I will.” This would amount to a guarantee and would be void if not evidenced in writing.
- An indemnity: “Let him have the goods. I’ll ensure you’re paid.” This is a personal undertaking to pay and would constitute an indemnity, which does not need to be evidenced in writing.

Question 31

Provide a summary of the remedies available under contract law.

Answer 31

The main remedies that make a defendant perform the contract are:
- Action for an agreed sum (which is a straightforward debt action)
- Specific performance
- Injunction

Specific performance and injunctions are both equitable remedies. They are awarded at
the discretion of the court when an award of damages would be inadequate.

The aim of restitution is to stop one party being unjustly enriched at the expense of the
other. Examples include:
- Recovery of money paid where there has been a total failure of consideration;
- Claim for a reasonable sum (as an alternative to damages) for goods or services supplied; and
- Claim for a reasonable sum for work done where a contract is never formed.

A claimant will only be awarded an account of profit in exceptional circumstances.

A claimant may be awarded a sum as negotiating damages where the only loss is the opportunity to negotiate a release fee.

A guarantee is a secondary obligation to pay if the debtor defaults. Guarantees must be
evidenced in writing.

An indemnity is a primary obligation to pay for a known loss/ liability. Indemnities do not have to be evidenced in writing.

Question 32

What are the key provisions under the Consumer Rights Act 2015 regarding non-conforming goods sold to consumers and the remedies available?

Answer 32

The Consumer Rights Act 2015 states that if goods sold to a consumer do not meet the requirements of:
- s 9 (satisfactory quality)
- s 10 (reasonably fit for their particular purpose)
- s 11 (correspondence with description)

The goods are deemed non-conforming if they do not fit with the above requirements.

In the case of non-conforming goods, consumers have three remedial options:
(a) The short-term right to reject
(b) The right to repair or replacement
(c) The right to a price reduction or the final right to reject

Question 33

What is the process and timeframe for exercising the short-term right to reject non-conforming goods?

Answer 33

The short-term right to reject is available to consumers for 30 days, starting from when:
(i) Ownership has passed (or possession transferred in contracts for hire)
(ii) The goods have been delivered
(iii) In cases where the trader must install the goods or perform actions for consumer use, the trader has notified the consumer that these steps have been completed (s 22).

Question 34

Under what conditions can a consumer exercise the right to repair or replacement for non-conforming goods?

Answer 34

The right to repair or replacement is available unless:
- Repair or replacement is impossible
- Repair or replacement is disproportionate (imposing unreasonable costs on the trader relative to the other remedies and the interests of the consumer) (s 23).

Question 35

What are the conditions under which a consumer can exercise the right to a price reduction or the final right to reject non-conforming goods?

Answer 35

Consumers are not entitled to both a price reduction and final rejection; they may only exercise the remedy if:
(a) After one repair or one replacement, the goods still do not conform to the contract
(b) The consumer can require neither repair nor replacement (because it is impossible or disproportionate)
(c) The consumer has required the trader to repair or replace the goods, but the trader has breached this requirement within a reasonable time and without significant inconvenience (s 24).

Additionally, if the final right to reject is exercised within 6 months, the consumer is entitled to a full refund with no deduction for use, except for motor vehicles or other specified goods (s 24(10)).

Question 36

What remedies does the Consumer Rights Act 2015 provide for non-conforming digital content?

Answer 36

According to s 42, if digital content is non-conforming, consumers have two options:
(a) The right to repair or replacement
(b) The right to price reduction

Importantly, s 42(9) states that digital content failing to conform at any time within six months of supply is considered not to have conformed when supplied.

Question 37

What are the conditions for exercising the right to repair or replacement for non-conforming digital content under the CRA 2015?

Answer 37

s 43 specifies that the trader must repair or replace digital content:
(a) Within a reasonable time and without significant inconvenience to the consumer
(b) Consumers cannot require repair or replacement if it is impossible or disproportionate
(c) The nature of the digital content and its intended purpose are factors in assessing what constitutes a reasonable time or significant inconvenience (s 43(5)).

Question 38

Under what circumstances can a consumer exercise the right to price reduction for non-conforming digital content?

Answer 38

The right to a price reduction under s 44 is applicable when:
- The consumer cannot require repair or replacement (because it is impossible or disproportionate)
- The trader has failed to repair or replace the digital content within a reasonable time and without significant inconvenience to the consumer.

Question 39

What is the consumer’s right to a refund when the trader had no right to supply the digital content?

Answer 39

Under s 45, if the trader had no right to supply the digital content, the consumer is entitled to a refund of all money paid.

This refund must be issued within 14 days and using the same payment method as the original transaction, without imposing any fees for the refund.

Question 40

What are the consumer’s rights if non-compliant digital content causes damage to their device or other digital content?

Answer 40

According to s 46, if a trader supplies digital content that damages a consumer’s device or other digital content, the consumer is entitled to:
- Repair of the damage or
- Compensatory payment

This is applicable if the damage would not have occurred had the trader exercised reasonable care and skill.

Question 41

What remedies are available to consumers under the Consumer Rights Act 2015 for non-conforming services?

Answer 41

Under s 54, if services are non-conforming, consumers have two remedies:
(a) The right to require repeat performance
(b) The right to a price reduction

Question 42

What are the conditions for exercising the right to require repeat performance of non-conforming services?

Answer 42

The right to require repeat performance is elaborated in s 55, which states:
(a) The supplier must provide repeat performance within a reasonable time and without significant inconvenience to the consumer
(b) Consumers cannot require repeat performance if completing it in conformity with the contract is impossible (s 55(3)).

Question 43

Under what conditions can a consumer exercise the right to a price reduction for non-conforming services?

Answer 43

A price reduction becomes available under s 56(3) when:
- Repeat performance is impossible
- The trader has failed to provide repeat performance within a reasonable time and without significant inconvenience to the consumer.

Question 44

How does the Consumer Rights Act 2015 apply in the standard scenario of purchasing a kettle where a consumer buys a kettle that becomes non-compliant shortly after purchase?

Answer 44

In a scenario where a consumer buys a kettle that becomes non-compliant shortly after purchase (e.g., it does not switch on), the consumer’s legal position allows them to:
- Reject the kettle within 30 days for a full refund
- Accept a replacement or insist on repair (unless impossible or disproportionate).

If the kettle’s issue is discovered later (after the 30-day window), the consumer must give the trader the opportunity to repair or replace before seeking a price reduction or final rejection.

Question 45

How are consumer remedies affected in the case of more complex goods, like a laptop, under the Consumer Rights Act 2015?

Answer 45

For complex goods, resolution relies on standards of reasonableness and proportionality rather than strict rules.

If a laptop shows intermittent faults, the trader must repair or replace it within a reasonable time and without significant inconvenience (s 23(2)(a)).

The determination of what is reasonable and significant involves considering:
- The nature of the goods
- The purpose for which the goods were acquired (s 23(5)).

If the consumer lacks confidence in the laptop’s reliability, they may consider exercising their right to reject once reasonable repair opportunities have been exhausted.

Question 46

Provide a summary of remedies available under the Consumer Rights Act 2015.

Answer 46

• The remedies available depend on whether the contract is for goods, services or digital content.

INSERT diagrams from BPP adapt - Contract Law - Remedies under CRA 2015.