1.5 Remedies Flashcards
What must a claimant prove to recover damages? (in terms of causation)
Causation that is not too remote from the breach
What is a guarantee?
Third party promises to pay for a party’s default
How are equitable remedies made available?
At the discretion of the court
What are the legal requirements of a guarantee?
Guarantee must be in writing and signed by the guarantor or at the guarantor’s direction. Not enforceable if not.
Name the equitable remedies that are available for a breach of contract
specific performance, injunction, rescission and rectification, which
are available at the discretion of the court
Common law remedy for a breach of contract
Damages which is available as a right
What is restitution?
Restoring to the innocent party benefits transferred under the contract before it
was discharged by the other’s breach
What are the three main types of remedies for breach of contract?
(1) Common law remedies (damages), (2) Equitable remedies (specific performance, injunction, rescission, rectification), and (3) Restitution.
What is the purpose of damages in contract law?
To place the claimant in the position they would have been in had the contract been performed properly.
What is reliance interest?
Damages awarded to put the claimant in the position they would have been in had the contract never been made.
What are the two categories of losses that are recoverable?
(1) Normal loss – arises naturally from the breach, and (2) Abnormal loss – recoverable only if both parties knew about the special circumstances at the time of contracting.
What must a claimant prove to recover damages?
Causation – the loss must not be too remote from the breach.
What is expectation loss?
Compensation for the loss of the bargain, putting the claimant in the position they would have been in had the contract been properly performed.
What is the cost of cure?
The cost of remedying defective goods or services, recoverable only if reasonable. THINK CURE = DEFECTIVE GOODS
What happens if a party makes a bad bargain?
The court does not protect bad bargains (caveat emptor).
When can damages be awarded for loss of a chance?
If the lost chance is quantifiable and likely to have occurred.
Can damages be awarded for disappointment or injured feelings?
Generally no, unless the contract was for a pleasurable experience (e.g., a holiday).
Can a claimant recover for losses suffered by a third party?
Usually only nominal damages, except in cases like family holiday bookings.
What is the duty to mitigate loss?
The claimant must take reasonable steps to reduce their loss. The burden of proof is on the defendant.
What is a anticipatory breach?
Where one party cancels the contract before performance is due, indicating an intention not to perform their obligations
Does the duty to mitigate apply in an anticipatory breach?
Yes, if the claimant accepts the breach; no, if they do not accept it.
When is a liquidated damages clause enforceable?
If it is a genuine pre-estimate of loss.
When is a penalty clause unenforceable?
If it imposes a disproportionate penalty rather than compensating for loss.
What is an indemnity clause?
A promise to compensate the other party for specific losses under the contract.
Does not need to be in writing
What are the key equitable remedies?
(1) Specific performance, (2) Injunction, (3) Rescission, (4) Rectification.
When will specific performance be granted?
Only if damages are inadequate; not available for employment contracts.
What is an injunction?
A court order to stop or compel an action.
When is restitution available?
When there is no valid contract or the contract has been discharged, to prevent unjust enrichment.
Unliquidated damages are
In contrast to liquidated damages, unliquidated damages are determined by the court.
