Chapter 35- Common Law Remedies

Question 1

What is the purpose of damages

Answer 1

• To compensate the innocent party for losses from a breach of contract
• Damages: This refers to the sum of money paid for compensation
• The damages aim to put the person in the same position they were in had not the breach occurred

Question 2

List the measures/ calculations of Damages

Answer 2

• Expectation loss
• Reliance loss
• Non-pecuniary loss

Question 3

What are expectation losses

Answer 3

• These aim to put the innocent party in the position they would have been in if the contract had been performed

Question 4

What are reliance losses

Answer 4

• These damages compensate for wasted expenditure
• They also apply where it would be difficult to assess what the benefits would have been to the claimant

Question 5

What are non-pecuniary losses

Answer 5

• These cover losses that are not financial such as:
• emotional distress
• pain and suffering
• damage to commercial reputation
• physical inconvenience

Question 6

List the limitations on recovery of damages

Answer 6

• Causation
• Remoteness
• Mitigation

Question 7

Define Causation

Answer 7

• The breach must be the cause of the loss
• the court will decide whether the breach is the main reason for the loss suffered by the claimant

Question 8

Define remoteness

Answer 8

• Losses must have been foreseeable at the time of contracting

Question 9

Define mitigation

Answer 9

• The innocent party is required to take reasonable steps to minimize losses
• The claimant should not take any unreasonable steps that would increase the amount of loss

Question 10

Advantages to use of remedy of damages

Answer 10

• Provides financial compensation
• Flexible
• widely recognized

Question 11

Disadvantages to use of remedy

Answer 11

• May not fully compensate for non-pecuniary losses
• does not restore the specific performance of the contract

Question 12

Evaluate the use of common law remedies

Answer 12

• Easier to quantify financial loss than emotional distress
• When calculating monetary damages, some guess work is used however, is limited in non-pecuniary losses
• Allowing distress claims can lead to floodgates of cases
• Compensation for emotional loss is cheaper
• Courts rarely award damages for emotional distress in business cases
• Loss of reputation is only compensable once they prove financial harm has been done

Question 13

Evaluate the causation and remoteness of damages as well as mitigation

Answer 13

• Not fair to make defendant liable for every consequential loss
• Justice would be served if there was a link between the breach of contract and loss
• Would only be fair to claim for losses that are reasonably foreseeable.
• The tests relies on what the reasonable man MIGHT have foreseen not what they MUST seen
• Mitigation is necessary in order to prevent defendant being liable for excessive losses
• Mitigation can be subjective