Chapter 3: Damages Flashcards
What is the intention of damages as a common law remedy?
They are intended to put both parties in the position they would have been in has the contract been performed properly.
What is meant by ‘remoteness’?
It may not be justifiable to blame the party at fault for all the consequences of their actions.
Damages will only be awarded for losses which are not too remote.
Hadley v Baxendale (1854)
Facts of ‘Hadley v Baxendale (1854)’
C owned a mill.
One of the mill parts had broken.
C made a contract with D for the transport of the old part to London as a pattern for making a replacement.
D was responsible for a delay in delivering the part.
As a result the mill was closed for a longer duration.
C claimed for loss of profits during the period of delay.
Held in ‘Hadley v Baxendale (1854)’
D did not know the mill was inoperable without the part.
The stoppage was not a natural consequence of delay in transportation.
C could have had a spare part and did not alert D that the mill would be in inoperable.
Accordingly, D was not liable for the loss of profit.
Which case established that there are two types of loss that can be recovered?
Hadley v Baxendale (1854)
What are the two types of loss that can be recovered?
Losses which are a natural consequence of the breach.
Where losses are not reasonably foreseeable, the party in breach of contract will only be liable for them if they knew at the time of the contract that such losses could arise in these particular circumstances.
Facts of ‘Victoria Laundries v newman (1949)
A delay in the delivery of a boiler caused the loss of the normal trading profit plus an extra-large profit on the loss of a government contract.
Held in ‘Victoria Laundries v Newman (1949),
The loss of the normal profit could be claimed but not for the government contract since this was not made known to the defendant and was therefore too remote.
When are damages not usually recoverable?
For loss of enjoyment
Jarvis v Swan Tours (1973)
Facts of ‘Jarvis v Swan Tours (1973)’
Jarvis entered into a contract for a holiday at a winter sports’ centre.
What was provided was significantly inferior to the description in the brochure.
A very low award was given for financial loss.
Held in ‘Jarvis v Swan Tours (1973)’
The damages should be increased to compensate for the disappointment and distress because the principal purpose of the holiday was the giving of pleasure.
What is meant by the measure of damages?
The courts will usually value damages as the cost to put the claimant back in the position they would have been if the contract had been properly performed.
What is meant by damages for loss of bargain?
Bought goods for £50.
Seller refused to deliver.
Buyer had to pay £60 for the goods from someone else.
The buyer’s damage would be £10.
When will the claimant be awarded nominal damages?
If the claimant has suffered no actual loss, the buyer will be awarded only nominal damages.
What is meant by reliance losses?
These enable the claimant to recover compensation for expenses incurred in performing their part of the contract before the breach occurred.
Anglia TV v Reed (1972)
