Commercial Remedies

Question 1

Photo Production Ltd v Securicor Transport (1980)

Answer 1

Lord DIplock
Breach of primary obligation –> secondary obligation
Usually to pay monetary compensation for loss caused by the breach

Question 2

Robinson v Harman (1848)

Answer 2

Baron Parke

Put in same situation, re damages, as if contract had been performed

Question 3

Williams v Agius (1914)

Answer 3

market price>sub-sale price
SOGA s51(2) or (3)?
Rodoconachi v Milburn
Viscount Hladnae LC, Rodoconachi is right, and is consiisent w British Westinghouse
Also, the law has not been affected by s51. By ss3, general pricniple is recognised as prima facie rule, and nothing in ss2 is inconsistent w this

Question 4

Rodoconachi v Milburn (1886)

Answer 4

Lord Esher MR
“If there is a market… the value will be the market value when the goods ought to have arrived”
“the value is to be taken independently of any circumstances peculiar t the plaintiff”
“the law does not take into account in estimating the damages anyhting that is accidental as between the plaintiff and the defendant”

Question 5

Clark v Macourt (2013)

Answer 5

Damaged frozen sperm, replacement costs covered by patients fee
Keane J, the claim is not for obtaining replacement, but for value of Gs to whcih C = entitled
Hayne J “Any difficulty encountered in applying [the Robinson v Harman principle] stems ultimately from the failure, when speaking of ‘compensation’ for ‘loss’ to identify what ‘loss’ is being compensated”.

Question 6

Jamal v Dawood, Sons & Co (1916)

Answer 6

B wrongfully rejects shares, S later sells for > market price at tiem of rejection
SOGA s50(2) or (3)
Lord Wrenbury: Speculation is that of S, not B. S cannot recover more if market falls, nor is he liable to B for profts if market rises
C who sues for damages owes duty to mitigate loss consequent upon breach and connt claim damages due to hsi own neglect. But the loss to be ascertained=loss at the date of beach

Question 7

R Stevens, “Damages and the Right to Performance: A Golden Victory or Not?”

Answer 7

Damages are awarded in first instance to vindicate right violated (substitutive damages)
Different from damages awarded to compensate loss consequent upon the BOC (consequential damages)

Question 8

G Treitel (1997)

Answer 8

Where S delivers G not conformming w con, B may eb prejudiced in 2 different ways
Value of G may be less
B may have intended some use fo which these Gs are not suitable
First type is not subject to remoteness
E.g. Get metal alloy instead of gold riing, no doubt that B can recover simply bc the object = wprth less than contracted for
This = rule @ s53(3)

Question 9

The Mediana (1900)

Answer 9

Had replacement ship, doesn’t matter
Lord Halsbury LC
“The plaintiffs were deprived of their vessel”. Not “the use of their vessel”. “What right has a wrongdoer to consider what use you are going to make of your vessel?”
Example of chair taken from room.
Broad pricniple is independent of the particular use C was to make of the thing.
Except where trying to establish specific loss of profit, where that loss must be shown

Question 10

In case like Agius, must any sub-sale by B be disregarded when calculating damages?

Answer 10

No.
E.g. if B is deprived of sub-sale at higher market value, that may be recoverable consequential loss
e.g. R & H Hall v WM Pim Junior & Co Ltd (1928), B informed S he needed the goods for lucrative sub-sale
Viscount Haladne, measure of damages extends to whatever may reasonbly be supposed to have been in the cntemplation of both parties at time con made, as probable result of its breach.
This accords w second branch of Hadley v Baxendale.
Pricniple not conficnned to sub-con already actually made @ date of con, but applies also to case of sub-con which will probably be made

Question 11

Breach of Warranty

What bit of statute does all this shit?

Answer 11

S53(1)-(4)

Question 12

Slater v Hoyle & Smith Ltd (1920)

Answer 12

Cloth not good enough, BOW
Scrutton LJ, after discussing Rdoconachi and Agius, now apply these principles to damaged goods. B has paid con price but not got sound goods. His loss is threrfore the difference between market value of sound and of damaged goods
Sub-cons do not come into account bc B is under no obligaiton to use these gs for hsi sub-con

Question 13

Bence Graphics (1998)
Otton LJ

Answer 13

Slater sitinguished. There, sub-sale was same Gs after bleaching, S did not know of contemplated sub-sale.
Here, Gs were cusbstantiall converted/prcess by B and S was aware of precise use of vinyl @ time con =made
Once Gs had been converted in manner conteplated by the parties, Slater has no application, damages must be assessed by reference t sub-sale “whether the plaintiff likes it or not”

Question 14

Bence Graphics (1998) 
Auld LJ

Answer 14

Slater should be reconsidered at least in context of claims by B for damages for BOW where he has made successful sub-sale without claim from his buyers.
Case is not materially distinguishable from Slater on the grounds Otton suggests.
The principle is recovery of true loss. Put complaining party in position he would have been in if con had been performed.
Where there is evidence shwowing nature of the loss parties ust be taken to ahve contemplated in event of breach, it is not to be set aside by appying s53(3) test simply bc it is difficult to claculate, ot to produce result where C recovers > true loss

Question 15

The Golden Victory (2007)

Answer 15

No loss suffered and no damages payable after March 2003 (beginning of Gulf War)
Lord Scott
underlying principle = victim entitled to damages representing value of contractual benefit to which he is entitled but deprived
Assessment at date of breach rule not always apt, particularrly where con is for supply of goods over eriod, rather than one-off sale
Any rule that required damages after what wold be frustrating event would be inconsistent w the over-riding compensatory prciniple on whichh awards of contractual damages ought be based

Question 16

Melachrino v Nickoll & Knight (1920)

Answer 16

Breach by S, B acceopts repudiation, then waits until market price = below con price to substitute the Gs
Bailhache LJ, only nominal damages available
Adopting date of antitcipatory breach as date market price ought to be taken would put B in better position than if his con was duly performed

Question 17

British Westinghouse (1912)

Answer 17

Viscount Haldane LC
“When in the course of his business, [B] has taken action arising out of the transaction, which action has diminished his loss, the effect in actual diminution of the loss he has suffered may be taken into account even though there was no duty on him to act…[B’s act reducing the loss must be] one which a reasonable and prudent person might in the ordinary course of business properly have taken.”

Question 18

How can Westinghouse be reconciled with Jamal?

Answer 18

R Stevens
Consequential lossess are assessed at time of judgment, taking into account events subsequent to thte wrong that decrease the loss (Westinghouse)
Substitutive damages are valued at the time of infringment. Subsequent events are irrelevant as court’s task is not to calculate actual loss suffered. Q is instead: “what is the difference in value at the time of breach between the performance promised and the performance received?”

Question 19

Cases incosnsitent w focus on monetary compensation for loss sustained in consequence of breach (Photo Production) and putting C in sae posiion as if con performed (Robinson v Harman)

Answer 19

Williams v Agius
Jamal v Dawood
Slater v Hoyle
Clark v Macourt

Question 20

Decisions whihc prioritise limiting recovery to actual loss flowing from D’s breach

Answer 20

Bence Graphics
The Golden Victory
British Westinghouse

Question 21

Hadley v Baxendale (1854)

Answer 21

D = liable for loss arising naturally from BOC, or that may reasonably be supposed to have been in contemplation of parties, at time they made con as probable result of it’s breach

Question 22

Victoria Laundry v Newman Industries (1949)

Answer 22

D doesn’t know C have lucrative dying contracts, delivers boilers 5 months late.
Asquith LJ, C can only recover the losses that were reasonably foreseeable. Laundry losses were reasonably foreseeable, but D did not knwo of lucrative dyign contracts, so recovery = capped at level of reasonably foreseeable dying contracts

Question 23

The Heron II (1969)

Answer 23

Lord Reid
If D thought about it, would realise it was not unlikely that sugar would be sold at market price on arrival and that market prices are apt to fluctuate day-to-day.
Test of whether loss is not unliklet is defined as “denoting a degree of probability considerably less than an even chance but nevertheless not very unusual and easily foreseeable”. Is loss “sufficiently likely to result from the breach of contract to make it proper to hold that the loss flowed naturally from the breach or that loss of that kind should have been within [D’s] contemplation”?

Question 24

Weld-Blundell v Stephens (1920)

Answer 24

D’s liability arises if there is “some knowledge and acceptance… of the purpose and intention of [C] in entering the contract”

Question 25

Horne v Midland Rwy (1873)

Answer 25

Blackburn J
“in orrder that the notice may have any effect, it must be given under such circumstance as that an actual contract arises on the part of [D] to bear the exceptional loss”
Very high threshold, doubted by Lord Upjohn in Heron II, who states that such liability need not be made a term of the contract

Question 26

The Pegase (1981)

Answer 26

Robert Goff J
Lost resale profits at unusually high prices cannot be recovered unless D has sufficient knowledge at or before time contract was amde, so taht it was w/in hsi reasonable contemplation that he was assuming responsibility.
May well be encessary for C to have specifically drawn to the attention fo D the reason why due performance was of such critical importance to him

Question 27

Stapleton on the Pegase

Answer 27

Says that “assumption of responsibility” is a meaningless phrase
Judge really just decides whether D should be responsible and then says he assumed responsibility

Question 28

The Achilleas (2009)

Answer 28

D returns late w ship, so C has to renegotiate w X for less, bc market fall
C wants to claim both the over-run (costing them the higher charges they would have had) AND the contract difference
CA says yes, its reasonably foreseeable that C would need to renegotiate and market could fluctuate
But HL says too remote
Commonly accepted in shipping that these losses could not be recovered and generally presumed this is the case
Its expected to pay the charges C missed out on, but not for re-negotiated contract
Court wants to compy w the parties’ pre-exisitng commercial expectations

Question 29

The Achileas Lord Hoffman

Answer 29

It is logical to found libaility for damages upon the intention of the parties because all contractual liability is voluntarily undertaken
Wrong to hold D liable for risks which people entering into a contract in their market would not reasonably eb consisdered to have undertaken
The “freseeabel as not unlikley” approch in Heron II is a prima facie asumptiona bout what parties may be taken to have intended, usually applicable, but capable of rebuttal
cases of departre form the ordinary foreseeability rule based on individual circumstances will be unusual
Trying to say that the commercial and actual test is the same

Question 30

The Achileas

Lord Hope

Answer 30

Assumption of responsibility is determined by more than what at the time of the contract was reasonably foreseeable.
Question is whether the loss was a type of loss for whcih the party can reasonably be assumed to have assumed responsibility.

Question 31

The Achileas Lord Walker

Answer 31

“what is most important is the common expectation, objectively assessed, on the basis of which the parties are entering into their contract.”

Question 32

Lord Hoffmann (2010) 14 Edinburgh Law Review 47, 52

Answer 32

Sees Achileas as a new approach
Orthodox approach has high indeterminacy bc relies on only two concepts: kind of loss and degree of probability
New approach will free CL from need to explain decision on remoteness by the single criterion of probability and enable it to reconise that liability may be influenced by commonsense distincitons between different commericla relationships

Question 33

s51(2) SOGA vs The Acileas

Answer 33

SOGA: “The measures of damages is the estimated loss directly and naturally resulting, in the ordinary course of events, from the seller’s breach of contract.”
Achileas: possibility that loss in ordinary course of events may be seen as too remote, as parties’ understanidng may be that D was not to be liabel for such losses
Note, Hoff says cases of departure rom ordinary foresseability wil be unusual

Question 34

John Grimes v Gubbins (2013)

Answer 34

Sir David Keene
Ordinary foresseability test from Hadley = “standard rule”
Depart from only then “commercial background” is such that the “standard approach would not reflect the expectation or intention reasonably to be imputed to the parties.”

Question 35

SOGA 1979 s49poo

Answer 35

(1) Where, under a COS, the prop in G has passed to B and he wrongfully does not pay according to terms of con, S may maintain action against him for price of G
(2) Where, under a COS, the price is payable on a day certain irrespective of delivery and B wrongfully does not pay such price, S may maintain an action for the price, although the prop in G has not passed and the G has not been appropriated to the contract

Question 36

Habton Farms v Nimmo (2004)

Answer 36

Auld LJ
entitlement to price is quite different from remedy of damages for breach of contractual obligation
S need onyl prove that price is contractually due
Need not prove any actual loss (e.g. that the subject matter of the con has a lower market value than the sale price)
Similarly, no Qs of remotentess or mitigation

Question 37

Stein, Forbes & Co v pooCounty Tailoring Co (1916)

Answer 37

Con for sale of sheepskins provides for payment “against documents on arrival of the steamer”
B refuses to accept presented documents
S sues for price - fails
Atkin J, case does not fall w/in s49:
Property ahad not passed; and
“this is not a case where the price is payable on a day certain irrespive of delivery. On the contrary, it is payable expressly against delivery”

Question 38

Habton Farms v Nimmo at [123]:poo

Answer 38

Where S has not delivered G bc they have been lost or destroyed in the meantime, his entitlement to claim price from B depends where prop and risk lie.
Where prop and risk remain w S, his entitlemtnt to price depend on his continuing ability and willingness to deliver G in accordance w con
Where both have passed to B, B must pay even if S is unbable to deliver bc they have been lost or destroyed

Question 39

Shell-Mex v Elton Cop Dyeing (1928)

Answer 39

Distinction between price being payable and price being earned
Sale of oil, to be delivered in instalments @ request of B
Con: S has right at any time to invoice B the due G not taken up, and demand payment on invoice amounts”
B repudiates after only part of oil delivered
S retains ownership of remainder, then claims price of undelivered oil
Wright J, no action for the price payable, as prop had not passed and the price was not earned “irrespective of delivery”
Even thoguh price was payable by B under terms of con, S had not earned right to price

Question 40

PST Energy 7 Shipping LLC v OW Bunker Malta Ltd (2016)

Answer 40

Lord Mance, “the main focus of s49(2) may well have been on cases where delivery has not been made - hence the phrase ‘irrespective of delivery’”

Question 41

Oil Bunkers (2016)

Answer 41

s49 does not focus on soem situations. In thoses cases, is action for price excluded?
The 1893 Act was rooted in and intended to reflect CL authority, developed in era when freedom f contract and trade were axiomatically accepted as beneficilal.
Certainly, a court could not now recognise a claim for price falling within s50,, and should be cautious about recognising claim to price of goods in cases not falling w/in s49.
But this leaves at least ome room dor claims for price in other circumstances than those covered in s49
Castle v Playford (1872)
Action for price allowed where prop had not passed, but risk had passed to B, and goods then lost or destroted without fault of S
Oil Bnkers case s stronger as although bunkers remain prop of S, the bunkers are at risk of B re damage and destruction and B is permitted completely consume the bunkers
Does nto suggest this is limit fpo circumstance outside s49 where price may be recoverable, this mst be left for future determination

Question 42

White & Carter (Councils) v McGregor (1962)

Answer 42

C supplies dustbins to council and agrees to carry D’s adverts on them, D repudiates, C does not accept and affirms contract, carries adverts, and claims price due under con
Majority of HL allow

Question 43

White & Carter (Councils) v McGregor (1962) Lord Reid

Answer 43

If it can be shown that C has no legitimate interest, financial or otherwise, in performance of the contract rahter than claiming damages, he ought not be allowed to saddle D w additional burden w no benefit to himself
If a party has no interest to enforce a stipualtion, he cannot in general enforce it
So it might be that if a party has no interest to insist on a particular remedy, he ought not be allowed to insist on it

Question 44

Specific performance and injucntions

Answer 44

SGA 1979, s52

(1) In any action for BOC to deliver specific or ascertained goods the court may direct that the con should be performed specifically, without giving D the option of retaining the G on paymnt of damages
(2) P’s application may be made @ any time before judgment or decree
(3) The judgement or decree may eb unconditional, or on such terms and conditions as to damages, payment of the price and otherwise as seems just to the court

Question 45

Re Wait (1927)

Answer 45

A court is very unlikely to order specific performance of a contract to provide unascertained goods

Question 46

Sky Petroleum v VIP Petroleum (1974)

Answer 46

C applies for injuction to prevent Ds breaching contract to supply petrol to Cs filling stations
Aim is to protect D and prevent it going out of business, peding resolution of dispute between C and D
Goulding J: Where Ds are only source of supply and supply is necessary for C to continue its business then, even though con was for sale of UAG, specific performance/injunction may be granted, as damages will not be an adequate remedy

Question 47

Co-Operative Insurance Society v Argyll Stores Ltd (1998)

Answer 47

Action for specific performance of D’s promise to keep its supermarket open
C wants D’s supermarket to stay open to attract customer to the shopping centre
HL allows Ds appeal
General rule is against mandatory injuction to carry ona business, and here D’s duty is too imprecise for such an injuction
Hoff: Order for specifc performance may cause injustice by allowing C to enrich himself at D’s expense. Loss which D may suffer through having to comply w oder may be far greater than C would suffer from con being broken
True that it is D’s fault that he is in such a position. But purpose of law of contract is not to punish wrongdoing but to satisfy the expectations of the party entitled to performance
A remedy that gives more than performance due is unjust, and a waste of resources, and yokes parties together in a continuing hostile relationship
Grant or refusal of specific performance remains matter for judge’s discretion. There are no binding rules, but this does not mean that there cannot be settled pricniples, founded on practical considerations, which do not have to be re-examined in every case, but which the courts will apply in all but exceptional circumstances

Question 48

Attorney-General v Blake (2001) HL

Answer 48

Confirms general position that such remedies are not available in response to a BOC, but identifies an exceptional case where such a remedy is warranted

Question 49

FHR European Ventures LLP v Cedar Capital Partners LLC (2015)

Answer 49

Standard response to receipt of bribe/secret commission by agent is that the bribe/commission will be held by agent on constructive trust for the principal
Lord N: that the rule applies to all unauthorised benefits an A receives = consistent w the fundamental pricniples of the law of agency
A owes dty of undivided loyalrt
P thus entitled to entire benefit of A’s acts in course of agency
Principle = wholly unaffected by fact A may have exceeded auth
A’s duty = accordingly to deliver up to his P the benefit he has obtained, not simply pay compensation for having obtained it in excess of hsi authority
Wider policy considerations too, Lord Templeman in AGHK v Reid (1994): “bribery is an evil practice which threatens the foundations of any civilised society”. Secret commissions are also objectionable as they inevitably tend to undermine trust in the commercial world.”
Nonetheless, D’s arguemtn based on potential prejudoce to the A’s unsecured crediors has some force, but is balanced by fact that a P whose A obtained a bribe should be able to trace the proceeds o the bribe into other assets and follow them into hand of knowing recipient (as in Reid)