7. Contractual Remedies I

Question 1

Robinson v Harmen

Answer 1

Aim of damages is to put parties in the position they would be in if contract had been performed

(makes sense - function of contract = security of knowing parties will perform)

Question 2

Photo Productions v Securicor

Answer 2

Lord Diplock - breach of primary obligation gives rise to secondary obligation for breacher to pay monetary compensation for loss bc of breach

Question 3

William v Agius

Answer 3

s. 51 non-delivery
- s.51(3) prevails because SOGA follows common law
- general principle is B gets difference between MV of goods at time of delivery and the contract price)

Question 4

Rodacanachi v Milburn

Answer 4

carriage of goods case

• S failed to deliver cotton
• damages: difference between MV of goods at time of delivery and contract price

Question 5

Clark v Macourt

Answer 5

HIGH COURT OF AUSTRALIA
- Doesn’t matter that D didn’t suffer any loss (patients paid for sperm)

CLAIM IS TO VALUE OF GOODS

Hayne J: take a broader definition of loss (not just out of pocket loss)
- loss includes failure to obtain something you were entitled to

Question 6

Jamal v Dawood

Answer 6

s.50 non-acceptance

• damages: loss ascertained at date of breach
• if S held onto shares after it is at S’s risk (doesn’t increase or decrease damages)

Question 7

R&H Hall v Pim Junior

Answer 7

for consequential loss, sub sale can be taken into account if remoteness test is met

Question 8

The Mediana

Answer 8

lightship damaged but C had another

D must pay for loss of use of ship (doesn’t matter that C had a replacement ship)

once D damages, C is entitled to VINDICATE right (C is deprived of an opportunity to use and law puts value on this)

particular losses only relevant for “special damage” (consequential loss)

Question 9

Slater v Hoyl

Answer 9

s.53 breach of warranty

B entitled to difference between MV of goods and contract goods actually delivered

doesn’t matter that B used anyway to fulfil order and SB paid in full

Supports S/T view and Jamal and Agius

Question 10

Bence Graphics v Fasson

Answer 10

breach of warranty (vinyl not good)

• SB complained and S compensated for that
• any further liability?

NO FURTHER LIABILITY
- DAMAGES CAN BE REDUCED BC LOSS SUFFERED IS LIMITED

OTTON LJ: distinguish Slater

• Slater: reselling same goods (here B changed) and S didn’t know what goods used for (here S knew)
• goods converted = Slater doesn’t apply

AULD LJ: reconsider Slater

• aversion to idea that commercial party can recover more than actual loss
• challenge Slater (windfall)

Question 11

The Golden Victory

Answer 11

D repudiated contract in 2001 (returned ship early)

C claims damages for remaining period (4yrs) but in 2003 Gulf War broke out and that term would allow D to repudiate

HELD: NO damages for loss post-2003 (artificial to disregard events that actually occurred)

NOT inconsistent with s/t because benefit = on-going contract and that needs to be valued (valuation includes term)

Question 12

Melachrino v Nikoll

Answer 12

S repudiates (anticipatory breach) and B accepts

S liable but NOMINAL DAMAGES

• B suffered no loss
• Damages determined by MV @ contract date (this was the right)

Question 13

British Westinghouse

Answer 13

Benefits acquired by B in acquiring new turbines must be taken into account

• B did not suffer loss by replacing goods
• S already paid for differences in value

Question 14

Blue Circle v MOD

Answer 14

Value assessed by reference to earliest time at which it could be sold by B (£4mn)

NOT the difference between what it is worth now and what is was worth (D cannot reasonable expect C to hold onto land)

Question 15

Hadley Baxendale

Answer 15

consequential loss:
1) arising naturally in ordinary course of events

2) reasonably supposed to be in contemplation of parties at time of contract

Question 16

Victoria Laundry v Newman

Answer 16

D did not know of lucrative contract so C cannot recover damages for that

NOT LIMB 1
NOT LIMB 2 (D didn’t know)

damages capped at reasonably foreseeable loss

Question 17

The Heron II

Answer 17

Limb 1 Hadley v Baxendale

- ordinary course of events = “not unlikely” (2% not fine, 25% probably fine)

Question 18

Weld Blundell v Stephens

Answer 18

D’s liability arises if there is some knowledge and acceptance of purpose/intention of entering contract

Question 19

Horne v Midland

Answer 19

for notice to have effect, must be “an actual contract” (Blackburn J)

• highest test stated
• doubted in The Heron (no need for contractual agreement)

Question 20

The Pegase

Answer 20

for limb 2 - not just knowledge, but no need for contract either….

MIDDLE GROUND: ASSUMPTION OF RESPONSIBILITY
- knowledge and reasonable person would contemplate that on breach, they would be liable for this (middle ground)

Question 21

The Achillias

Answer 21

Court said that damages were not unlikely (ordinary course of events - limb 1)

BUT too remote
because commercial practice that these losses are not recoverable

• seems to be adding AOR into limb 1?

Question 22

John Grimes v Gubbins

Answer 22

ordinary foreseeability test from Hadley is the “Standard rule” but will be departed from when “commercial background” is such that the standard approach does not reflect expectations

Question 23

Habton v Nimmo

Answer 23

s.49 = difference to remedy for “damages”

S ONLY has to show price is due (no need to show loss)

Question 24

Stein, Forbes, v County

Answer 24

B breaches (doesn’t take delivery) and S sues for price

NO S.49 because property had not passed (and not a case where price due irrespective of delivery either)

Question 25

Shell-Mex v Elton Cop

Answer 25

ROT clause

• property not passed so no action for price
• s.49 only if price earned

Question 26

PST Energy

Answer 26

s. 49 is irrespective of delivery

- can be earned without delivery

Question 27

Oil Bunkers

Answer 27

• not SOG case
• but if it was, can there be action for price outside s.49?
• NO S.49 is exhaustive

Question 28

Castle v Platford

Answer 28

allowed action for price where property had not passed

risk passed to B (and goods destroyed without fault of S)

Question 29

White & Carter v McGregor

Answer 29

C earned price and brought action for price (kept contract alive - did not accept repudiation)

• unusual: only works if C can complete their side of the contract without co-operation
• if D can show C has no legitimate interest in performance, D can resist

Question 30

Re Wait

Answer 30

court unlikely to order SP for unascertained goods because damages likely adequate

Question 31

Sky Petroleum v VIP

Answer 31

Exceptionally, if damages inadequate maybe SP

• D was only source of supply and C needs supply to continue business
• damages inadequate

Question 32

Co-Op v Argyll

Answer 32

SP involves court forcing a party to perform os court reluctant to order

C cannot argue he has a right to performance and so must be SP

• compare C’s loss to D’s burden
• if burden on D is higher, no SP

Question 33

AG v Blake

Answer 33

general position = no gain based remedy

here yes but exceptional case (spy and gov)

Question 34

FHR v Cedar

Answer 34

RECIEPT of bribe/secret commission by AGENT is held by A on CT for P

GAIN BASED PROPRIETARY REMEDY = VERY UNUSUAL