11. Remedies Flashcards

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1
Q

What are the four types of damages?

A
  1. Expectation damages
  2. Reliance damages
  3. Non-monetary losses
  4. Nominal damages
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2
Q

What is the intent behind the expectation measure of damages?

A

To put the party back in the position they would have been in had the contract been performed

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3
Q

What is another term for expectation damages?

A

Loss of bargain damages

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4
Q

In one of what two ways are expectation damages calculated?

A
  1. The cost of curing the defects, or
  2. Difference in value between what was actually provided and what should have been provided under the contract
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5
Q

When might reliance damages be used?

A

When expectation damages are too speculative

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6
Q

What does reliance damages seek to compensate?

A

Expenses incurred in reliance on the contract up to the time of breach

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7
Q

What are the three types of non-monetary losses for which damages can be awarded?

A
  1. Physical injury from the breach of contract
  2. Loss of amenity
  3. Loss of reputation
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8
Q

Are damages for injuries to feelings generally allowed?

A

No

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9
Q

When does loss of amenity arise and to whom is it available only?

A

Where the purpose of the contract was enjoyment, e.g. a holiday, but only a consumer may be awarded damages for loss of amenity.

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10
Q

Are punitive damages generally awarded in contract cases?

A

No

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11
Q

What are nominal damages?

A

A trivial sum, such as £1, in damages, in situations where there technically is a breach, but no actual loss

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12
Q

What is the general rule for when damages are assessed?

A

Damages are generally assessed at the date of breach

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13
Q

What are some exceptions to the general rule that damages are assessed at breach?

A
  1. Innocent party was not aware of the breach for a period of time
  2. Difficulty in finding alternate performance
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14
Q

However, when is remoteness considered?

A

When the contract was entered into

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15
Q

In order to not be too remote, and therefore unrecoverable, damages should have one of what two criteria?

A

Damages should:

  1. Fairly and reasonably be considered to arise naturally from the breach, or
  2. Have been in the contemplation of both parties as a probable result of breach
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16
Q

On the exam, how might remoteness be tested?

A

Innocent party enters into a one off arrangement, not in their ordinary course of business

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17
Q

What is the difference between the rules on remoteness in contract and tort?

A

Contract: Whether loss was a serious possibility or not unlikely + must flow naturally from breach or be in the contemplation of the parties

Tort: Whether loss was reasonably foreseeable (a lower bar)

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18
Q

What is the test for causation in contract?

A

Whether the breach was the effective cause of the loss

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19
Q

Will a reasonably expected intervening event break the chain of causation in contract?

A

No

20
Q

Is the party in breach still liable if the breach is one of two effective causes of the loss?

A

Yes

21
Q

When is contributory negligence available in contract?

A

When the liability is the same both in contract and in tort, i.e. there would be a duty in tort even if there was no contract

22
Q

Is contributory negligence contract a complete defence?

A

No, only partial

23
Q

What is the measure of damages when looking at expectation interest?

A
  1. Difference in value between what was actually provided and what should have been provided under the contract
  2. Cost of remedying the defect
  3. The value of loss of amenity
24
Q

What is the measure of damages if the buyer has a claim for non-delivery of goods or delivery of non-conforming goods?

A

The estimated loss resulting directly and naturally from the seller’s breach

25
Q

If there is a market for the goods, what is the starting point for calculating damages?

A

Difference between the contract price and the market price of the goods when they ought to have been delivered

26
Q

What rules apply when the seller attempts delivery but the buyer breaches by refusing to accept?

A

Similar rules to when they seller is in breach

27
Q

What is the innocent party’s duty to mitigate?

A

The innocent party must take reasonable steps to mitigate their loss and cannot recover losses that are a direct consequence of a failure to mitigate

28
Q

What is required for a liquidated damages clause to be valid?

A

The damages must be based on a genuine pre-estimate of the innocent party’s loss

29
Q

As penalty clauses will be struck out, what will the innocent party’s recourse be?

A

The ordinary damages channels

30
Q

When will a damages clause be considered a penalty?

A

When the damages are out of proportion to the obligation breached

31
Q

How can an innocent party save a clause which looks like a penalty?

A

By demonstrating that the clause:

  1. Protects a legitimate business interest and that the damages are proportionate to that interest, and
  2. Is not extravagant, exorbitant, or unconscionable
32
Q

What is a debt claim?

A

A claim for an amount due under a contract, rather than damages

33
Q

What are the two advantages of a debt claim over a damages claim?

A
  1. No need to consider remoteness or causation
  2. No duty to mitigate
34
Q

Are equitable remedies available as of right?

A

No, they are discretionary

35
Q

What is specific performance?

A

An order requiring the party in breach to carry out their obligations in full.

36
Q

What statute gives specific performance a statutory basis?

A

Sale of Goods Act 1979

37
Q

In what five situations would specific performance not be granted?

A
  1. Undue hardship on party in breach
  2. Consideration is inadequate + another factor e.g. undue hardship or unfairness
  3. No mutuality (innocent party still has unperformed obligations)
  4. Contract for employment or personal services
  5. Order would require court supervision
38
Q

In what circumstances can an injunction be used related to an employment contract?

A

To restrain a breach of a negative term, provided it does not compel performance

39
Q

What is rescission and what is the effect?

A

Cancellation of a voidable contract, as if the contract never existed

40
Q

When must the grounds for rescission occur?

A

At the time or before the contract is entered into

41
Q

In what instance would equitable remedies not be available?

A

If it would be unfair to the defendant

42
Q

What three defences to equitable remedies are available?

A
  1. Unconscionable behaviour (unclean hands)
  2. Waiver
  3. Unreasonable delay (delay defeats equity)
43
Q

What is the primary aim of restitution?

A

To prevent unjust enrichment based on value acquired during a contract, after the contract has been set aside

44
Q

What must the innocent party show to claim restitution?

A

A legitimate interest in preventing the party in breach from retaining the value

45
Q

What are the terms given to the proportionate payment or return of money in a services context and a goods context, respectively?

A

Services: quantum meruit
Goods: quantum valebat

46
Q

What three remedies, in addition to those under the general law, are available to consumers under the Consumer Rights Act 2015?

A
  1. Right to reject defective goods within 30 days, for a full refund
  2. Right to require to trader to repair/replace at the trader’s expense (if not rejected or if 30 days has passed)
  3. Right to have price reduced or to reject (even after 30 days) if repair/replacement is not successful, too expensive, or cannot be carried out in a reasonable time