Common Law remedies

Question 1

Purpose & Nature of Damages

Answer 1

• Damages are a sum of money paid by the defendant to the claimant once liability has been established in compensation for the harm suffered by the claimant.
• In contract, the purpose is to compensate the claimant for losses suffered as a result of the breach
• The aim of damages is to put the person in the position they would’ve been in had the contract been properly completed and performed by the defendant

Question 2

The measure or calculation of damages

Answer 2

Unliquidated damages(those assessed by the courts) compensate the claimant for the loss they’ve suffered as a result of the breach. Their purpose is not to punish or recoup the gain made by the defendant. 3 types of measures:
* Expectation loss
* Reliance loss
* Non-pecuniary loss

Question 3

Expectation loss

Answer 3

• Damages are awarded for the loss of a bargain. The aim is to put the party in the same position as if the contract had been performed.

Question 4

Reliance loss

Answer 4

• Damages are awarded for out-of-pocket, wasted expenditure. This is the format used in tort, putting the parties back to where they were.
• These damages are also used where it would be difficult to assess what the benefits would have been to the claimant
• Anglia Television v Reed- The claimant recovered all costs as they were reliance losses as it was not known if the project would make a profit/loss and so only costs incurred were compensated for.

Question 5

Non-pecuniary loss

Answer 5

• Damages will be awarded in certain cases for things such as pain and suffering, physical inconvenience, damage to commercial reputation and distress to the claimant.
• Traditionally, there was no award for injured feelings as was shown in Addis v Gramophone Co. and subsequently confirmed in Johnson v Unisys but some limited exceptions have been recognised namely in Jarvis v Swan Tours for loss of holiday enjoyment.
• It’s thought that this will apply to consumer contracts not commercial contracts as well as contracts to do with personal enjoyment.

Question 6

Limitations on recovery of damages

Answer 6

• Remoteness and causation
• Mitigation

Question 7

Remoteness and Causation

Answer 7

• Causation- The court will decide whether the breach is the main reason for the loss suffered by the claimant.
• Generally losses need to have been within the reasonable contemplation of the parties at the time of the contract. Rules governing remoteness in contract were set out in Hadley v Baxendale- The claimant sued for loss of profit but was unsuccessful as the defendant was unaware of the importance of the urgent delivery of the goods.
  Following this case, damages will only be recoverable if:
• they can be fairly and reasonably considered as arising from the breach or
• the parties may have reasonably have contemplated the damages at the time of the contract.
• CL: Victoria Laundry Ltd v Newman Industries Ltd- The claimant successfully sued for loss of usual profits from the date of the breach, but failed to gain damages for loss of profit on a deal unknown to the defendant when the contract was formed.
  In contrast with:
• The Heron II- The defendants were liable for the loss because they knew there was a sugar market in the port of destination, and should have anticipated that prices would fluctuate.
• It was felt that the 2 rules stemming from Hadley v Baxendale should be reviewed, and so they were in Transfield Shipping Inc. v Mercator Shipping Inc.(The Achilleas).
• The Achilleas was considered in Supershield Ltd v Siemens Building Technologies Fe Ltd where it was confirmed that:
  -Hadley v Baxendale remains the standard rule.
  -The Achilleas approach shoud be taken where the Hadley v Baxendale approach would not reflect the expectations or intentions that could be reasonably imputed to the parties.

Question 8

Mitigation

Answer 8

• Mitigation limits the amount of damages that the claimant may be awarded. The claimant is expected to keep their damages to a minimum, and cannot claim for losses they could reasonably have avoided. e.g. if seller waited an unreasonably long time and the price fell, they may be expected to bear some of the loss.
• Claimant will not be bound to go to extraordinary lengths in order to mitigate the loss as they are bound to try to keep the loss to an acceptable minimum or not to deliberately increase the loss
• CL: Pilkington v Wood- The defendant argued that the claimant could’ve brought his action against the seller and thus mitigated his losses in the action against the defendant, but this claim was rejected.
• The Borag- Ship detained for breach of contract and owners borrowed large sums of money at exorbitant rates in order to gain it’s release. The COA wouldn’t allow recovery of damages in respect of the interest, since it held there was no real justification for incurring them.