5. Remedies

Question 1

Dunlop Pneumatic v New Garage

Answer 1

(1) Use of words ‘penalty’ or ‘liquidated damages’ is not conclusive
(2) Essence of penalty is payment stipulated as in terrorem (to intimidate offending party); the essence of liquidated damages is genuine pre-assessment of loss
(3) The issue is one of each particular contract, judged at the time of making the contract, and not at the time of the breach – test includes whether sum is extravagant compared with loss

Question 2

Robinson v Harman

Answer 2

Unliquidiated damages compensatory in nature

Question 3

The Golden Victory

Answer 3

Aim is neither to punish nor to enrich

Question 4

Birse Construction v Eastern Telegraph

Answer 4

Cost of cure is usual way of calculating expectation interest for building contracts

Question 5

McGlinn v Waltham

Answer 5

If purely aesthetic, only nominal damages will be awarded

Question 6

Ruxley Electronics v Forsyth

Answer 6

Loss of amenity

Question 7

Regus v Epcot

Answer 7

‘Unusual, if not impossible’ for damages to be awarded for loss of amenity in a commercial setting

Question 8

Anglia Television v Reed

Answer 8

C has unfettered choice in electing which measure to claim

But here expectation interest regarding film that had to be abandoned after star pulled out too vague, so must turn to reliance

Question 9

McRae v Commonwealth Disposals Commission

Answer 9

Speculative nature of salvage expedition made it impossible for Cs to quantify their expectations with any degree of precision, so necessary to turn to reliance interest

Question 10

C and P Haulage v Middleton

Answer 10

It will only be possible for C to claim reliance interest if contract would have enabled him to recoup expenses had it been properly performed

Question 11

Attorney-General v Blake

Answer 11

Restitution interest allowed where C had a legitimate interest in preventing D’s profit-making activity and, hence, in depriving him of his profit

Question 12

Esso Petroleum v Niad

Answer 12

Liberal approach to restitutionary interest

Question 13

The ‘Sine Nomine’

Answer 13

Pushes back against restitutionary interest - not available for deliberate breach

Question 14

Addis v Gramophone Co

Answer 14

Court refuses to award damages for mental distress

Question 15

Jarvis v Swan

Answer 15

Court awards damages for mental distress where whole purpose of contract is provision of pleasure, relaxation and peace of mind

Question 16

Farley v Skinner (No 2)

Answer 16

HL allows damages for non-pecuniary loss, since major object (though not whole purpose) of contract is to provide pleasure, relaxation and peace of mind

Question 17

Malik v Bank of Credit and Commerce International

Answer 17

Damages for loss of reputation allowed

Question 18

Chaplin v Hicks

Answer 18

Damages for loss of opportunity allowed - lost chance must be quantifiable + there was a genuine chance that opportunity might have come to fruition

Question 19

Galoo v Bright Grahame Murray

Answer 19

Broad, ‘common sense approach’ to determining causal link - D’s breach should be a ‘dominant’ and ‘effective’ cause of the loss

Question 20

Novus Steamship v A/N

Answer 20

In terms of a novus actus, if the intervening event was ‘likely to happen’, it will generally not be held to break the chain of causation

Question 21

Hadley v Baxendale

Answer 21

Innocent party should receive damages such as may
o (1) Fairly and reasonably be considered either arising naturally (i.e. according to the usual course of things) from the breach, or
o (2) Reasonably be supposed to have been in contemplation of both parties, at time they made the contract, as probable result of breach

Question 22

Jackson v Royal Bank of Scotland

Answer 22

What was in the contemplation (or knowledge) of the parties was to be judged at the time of contracting, not at the time of the breach

Question 23

The Heron II

Answer 23

‘Reasonable contemplation’ test requires higher degree of likelihood than ‘reasonable foreseeability’ test (The Wagon Mound)

Question 24

Balfour Beatty Construction v Scottish Power

Answer 24

Loss suffered when power was cut for 30 mins, causing concrete being poured to harden, was too remote – SP could not be expected to know technical details of concrete construction

Question 25

British Westinghouse v Underground Electric Rail

Answer 25

Mitigation- innocent party should take ‘reasonable steps’

Question 26

Payzu v Saunders

Answer 26

Reasonable steps to mitigate may include accepting performance offered by D under a new contract even when that performance amounts to a breach of the original contract

Question 27

White and Carter v McGregor

Answer 27

Duty to mitigate does not preclude party from going to expense of performing his side of contract after other party has wrongfully repudiated contract

Question 28

Alaskan Trader

Answer 28

C can only perform his side of contract if he has legitimate interest in doing so

Question 29

Hounslow LBC v Twickenham Garden Developments

Answer 29

C can only perform his side of contract if he is able to perform without the co-operation of the other contracting party

Question 30

Vesta v Butcher

Answer 30

Contributory negligence only applies where D’s liability in contract is same as his liability in tort of negligence which arises independently of the contract

Question 31

Dies v British and International Mining and Finance

Answer 31

Deposit paid by party that then breaches contract by refusing to accept delivery recoverable (rare)

Question 32

Adderley v Dixon

Answer 32

Specific performance will never be granted where damages of a liquidated demand is appropriate and adequate

Question 33

Coatsworth v Johnson

Answer 33

The court will take into account the conduct of P, for he who comes to equity must come with clean hands

Question 34

Eads v Williams

Answer 34

The action must be brought with reasonable promptness

Question 35

Patel v Ali

Answer 35

Specific performance will not be awarded where it would cause undue hardship on D

Question 36

De Francesco v Barnum

Answer 36

Specific performance will not be awarded for breach of a contract of personal services, e.g. contracts of employment

Question 37

Co-operative Insurance Society v Argyll Stores

Answer 37

Specific performance will not be awarded where constant supervision of the court would be required – thus building contracts are generally excluded

Question 38

Evening Standard v Henderson

Answer 38

Newspaper company was granted an interlocutory injunction to restrain employee production manager from working for rival newspaper during his contractual notice period