Chapter 7 - Remedies

Question 1

What is a remedy?

Answer 1

Something given by the court to a party who has suffered through non-performance of a contract. The main remedies are damages and equitable remedies.

Question 2

What are damages?

Answer 2

A money payment made by a party in breach of a contract to the other party. The amount paid is assessed by the court. They are available to all winners of a civil action as their right.

Question 3

Parke B described the court’s aim when awarding damages as what in Robinson v Harman [1848]?

Answer 3

That “so far as money can do it” the party who has sustained the loss will be “placed in the same situation, with respect to damages, as if the contract had been performed”

Question 4

What is a case law example of when damages weren’t awarded due to the claimants having made more profit as a result of the breach?

Answer 4

Omak Maritime Ltd v Mamola Challenger Shipping Co [2010]

Question 5

What are nominal damages and when might they be awarded?

Answer 5

Damages of a few pounds or even pence, which may be awarded when the loss resulting from the breach of contract is minimal or non-existent.

Question 6

What are contemptuous damages and when are they awarded?

Answer 6

Contemptuous damages such as one penny are awarded by the court when they feel that a claimant is technically correct in suing but is wasting everyone’s time doing so.

Question 7

What are pecuniary damages?

Answer 7

Ones which aim to compensate an injured part for their financial losses.

Question 8

How will the court award damages based on loss of bargain/expectation loss (in an overall sense)?

Answer 8

They will try to put the claimant into the position they would have been in financially if the contract was properly performed.

Question 9

How are damages awarded for loss of bargain/expectation loss in sale of goods cases?

Answer 9

Often based upon the difference between the agreed contract price and the marked price on the day which the goods should have been delivered, which means if the price has gone down the damages will be nominal (market price rule). The court aims to award the cost of replacement to give the claimant what they should have had.

Question 10

What does it mean if damages are awarded based on loss of amenity, and give a case law example?

Answer 10

The damages are based on the overall loss of enjoyment suffered by the claimant, such as in Ruxley Electronics and Construction Ltd v Forsyth [1996] when a swimming pool wasn’t built as deep as requested.

Question 11

What are speculative damages and what is a case law example of when these were awarded?

Answer 11

Damages awarded based upon lost opportunity wherein the court has to guess what might have happened, like in Chaplin v Hicks [1911] (missed interview but only 12/50 candidates would pass the interview). They are not always recoverable due to their uncertainty.

Question 12

What does it mean if the court awards damages based on ‘reliance loss’ and what is a case law example?

Answer 12

When it is impossible to quantify exactly what the loss of a bargain has cost so instead damages are awarded based on the sums the injured party spent on reliance of the other party fulfilling their obligations (also called consequential losses). Example case is Anglia Television v Reed [1972].

Question 13

What are non-pecuniary damages?

Answer 13

Compensation awarded for non-financial loss such as mental distress

Question 14

What are the two key exceptions to the traditional rule that courts are reluctant to award non-pecuniary damages, which were refined by HoL in Farley v Skinner (No 2) [2001]?

Answer 14

If the object of the contract is to provide pleasure, relaxation, peace of mind or freedom from distress (need not be the only reason for the contract) / If the breach causes physical inconvenience and discomfort leading to mental suffering.

Question 15

What is a case law example of non-pecuniary damages being awarded in relation to a holiday not being as advertised?

Answer 15

Jarvis v Swan Tours [1973]

Question 16

What four things must be shown by a claimant to claim damages?

Answer 16

That there was a breach of contract / that the breach caused the loss complained of / that the loss was not too remote from the breach / that they have attempted to mitigate the loss they are claiming

Question 17

Hadley v Baxendale [1854] established the basic rule that a party in breach of a contract will only be liable for losses which …? (2)

Answer 17

Are reasonably foreseeable as a result of the breach or which the claimant had specifically warned them about.

Question 18

What is an example case law in which the loss was considered too remote to award damages and the rule of Hadley v Baxendale [1854] was applied?

Answer 18

Victoria Laundry v Newman Industries [1949]

Question 19

What is an example case law in which the party in breach was liable for the damages because they should have anticipated a price fluctuation?

Answer 19

The “Heron II” [1969]

Question 20

What was the rule suggested in Jackson v Royal Bank of Scotland [2005] regarding what damages a defendant is liable for?

Answer 20

They will only be liable for results they should reasonably have contemplated as a likely result of the breach at the time of entering into the contract

Question 21

When should the remoteness rules of Hadley v Baxendale and Jackson v RBS not be followed?

Answer 21

If following them would produce an outcome which does not reflect the expectation/intention that the parties could reasonably have had.

Question 22

How does ‘mitigation of loss’ limit the amount (if any) of damages which can be awarded to a claimant?

Answer 22

It means the claimant must keep their losses to a minimum and are unable to claim for any loss which they could reasonably avoid. For example if a seller of goods waits an unreasonably long time and the price decreases, they may only receive the difference between the contract price and the price on the date of the breach.

Question 23

What are the two main equitable remedies for breach of contract and when are they available to a claimant?

Answer 23

Injunction and specific performance. They are awarded only at the court’s discretion. If someone breaches a court order for an equitable remedy they may be punished by imprisonment .

Question 24

What is specific performance?

Answer 24

A court order which orders the performance of the contract.

Question 25

Will specific performance be ordered in sale of goods cases? Why?

Answer 25

Not usually because damages are considered sufficient. Damages will allow a buyer to buy replacement goods, unless the goods were unique and unobtainable elsewhere such as the Mona Lisa. Property is also usually considered a ‘unique’ good.

Question 26

Was specific performance awarded in the case of Ryan v Mutual Tontine Westminster Chambers Association [1893] to require a porter to be in “permanent attendance”? Why?

Answer 26

No, because checking if the porter was in ‘permanent’ attendance would require constant supervision from the court to ensure the order was being complied with.

Question 27

Was specific performance awarded in Posner v Scott-Lewis [1986] to appoint a porter? Why?

Answer 27

Yes, because the court did not need to constantly supervise to ensure compliance with the order.

Question 28

Will specific performance be available in personal services contracts, such as employment?

Answer 28

No

Question 29

Specific performance is subject to the principle of mutuality. What does this mean?

Answer 29

That if it is available to one party, it must also be available to the other. It also works in reverse, so if the remedy is not available to one party, it will not be available to the other.

Question 30

What is an injunction?

Answer 30

An order which orders someone not to do something.

Question 31

When will an injunction not be granted? Give a case law example.

Answer 31

If granting it would give the effect of forcing the performance of a personal services contract, because this would be ordering the specific performance of a personal service contract. (Page One Records v Britton [1967])

Question 32

What are the three “steps” outlined in CRA 2015 and in which section is this?

Answer 32

Short time right to reject (within 30 days of ownership) / Right to repair or replacement / Right to a price reduction or final right to reject - in s19

Question 33

Can a consumer seek other remedies if seeking remedies under s19 CRA 2015

Answer 33

Yes, they may seek other remedies as appropriate such as damages, specific performance and repudiation but they cannot recover more than once for the same loss.

Question 34

What is the short time right to reject under CRA 2015 and which sections are relevant here?

Answer 34

This gives a 30 day window in which a consumer may reject goods in breach of any implied terms (the time limit may vary if goods are perishable). If they do so, the contract is ended and they are entitled to a full refund which must be given within 14 days from agreement of the same (provided the consumer has returned or made available the unwanted goods). ss20-22

Question 35

In which three ways can goods be rejected under s21 of CRA 2015?

Answer 35

Rejecting all goods supplied (even if some are non-faulty) / Rejecting all faulty goods and keeping any non-faulty goods / Rejecting some faulty goods but also keeping some faulty goods (and any which are non-faulty).

Question 36

What is the right to repair or replacement under CRA 2015 (what should the trader do and what should the consumer do) and what section provides for this?

Answer 36

Under s23, a consumer can require the trader to either repair or replace goods which are faulty. The trader must replace or repair in a reasonable time period, without causing significant inconvenience to the consumer and bear any costs incurred in doing so. The consumer must allow the trader reasonable time to do this before seeking the alternative or enforcing their short time right to reject if still available (timer on this is paused during this remedy).

Question 37

What is the right to price reduction or final right to reject under CRA 2015 and which section sets this out?

Answer 37

Usually available if repair/replacement has not be successful or was not possible, s24 allows a consumer to either keep the goods but insist on a price reduction or finally reject them. If they choose to keep the goods, the price reduction will be based on the difference of value from what was paid against what was provided. This can be anything up to an including the full price. If they reject, the refund must be paid within 14 days after this agreement and the trader may deduct from the value based upon any use the consumer has benefitted from. Usually this will only happen after 6 months.

Question 38

What is the right to repeat performance in relation to services contracts and what section of CRA 2015 provides this?

Answer 38

When a service is not performed with reasonable care and skill, a trader is required to perform the service again at their own cost, within a reasonable time period and without causing significant inconvenience to the consumer. Under s55

Question 39

What is the right to price reduction in relation to services contracts and what section of CRA 2015 provides this?

Answer 39

If the repeat performance remedy is not possible or if the service was not carried out within a reasonable time, a consumer has the right to require the trader to reduce the cost of their service by an amount appropriate to the severity of their breach, which can be up to 100%. This refund must be paid within 14 days of its agreement. Under s56

Question 40

In relation to contracts for digital content, what is the right to repair or replacement and what section of CRA 2015 provides this?

Answer 40

A repair in this context means making sure the content conforms with the contract (e.g. a software update). It must be completed within a reasonable time period, without causing significant inconvenience and the trader must bear the cost of the repair or replacement. The consumer must allow the trader time before deciding to enforce the short time rejection or seeking the alternative. S43

Question 41

In relation to contracts for digital content, what is the right to price reduction and what section of CRA 2015 provides this?

Answer 41

If a repair or replacement is not possible or cannot be done without causing inconvenience or in a reasonable time, a price reduction becomes an option under s44. This can be up to 100% and must be paid within 14 days of its agreement.

Question 42

In relation to contracts for digital content, what is the right to a refund and what section of CRA 2015 provides this?

Answer 42

Under s45, this remedy is only available if the breached term is the trader’s right to supply digital content (i.e. the seller has no right to sell what they are selling). The refund will be up to 100% and payable within 14 days of agreement.

Question 43

In relation to contracts for digital content, what is the remedy for damage to a device or to other digital content and what section of CRA 2015 provides this?

Answer 43

Under s46, if the digital content has caused damage to the consumer’s device or other digital content, and the trader did not use reasonable care and skill to prevent this happening, a consumer is entitled for the trader to either repair the damage or pay compensation for it. Payment must be paid within 14 days of its agreement.