Compensatory damages following a breach Flashcards
what is the purpose of damages for a breach
put the innocent party into the financial position they would have been in had the contract been performed.
what are the 3 ways of identifying the relevant expectation loss?
consequential loss- loss from breach
difference in value- look at difference between expected gain vs what they actually got.
cost of cure- cost of fixing contract
how are damages awarded if it too difficult to work out the value of the expectation interest.
wasted expenditure/ protecting reliance interests
what is a restitution interest based damage
claimant can recover benefits conferred on the defendant
non- pecuniary loss
recovering for inconvenience and discomfort. (NON FINANCIAL)
punitive damages
extremely rare.
- punish wrongdoer fro action recklessly
what are the 3 limitations when recovering damages
remoteness
mitigation
contributory negligence
what is remoteness
limiting liability to reflect the risk of loss that appeared to be accepted at the time of entering the contract
if the actual breach harms the reputation, which causes financial loss, can loss be recoverable
yes.
Farley v skinner
- seeking damages for loss of enjoyment or other mental distress can be claimed where it is a major or important object of the contract
what are the 4 different types of damages available for non-financial loss
- pain and suffering - available as a consequence of breach- godley v Perry
- physical inconvenience- consequence of breach- Bailey v bullock
- harmed reputation resulting from th breach- only if It results in financial loss- Malik v BCCI
- loss of enjoyment/ mental distress- if freedom from distress is an important object of the contract- Farley v Skinner
Addis v Gramophone
harmed reputation and injured feeling from the manner of a breach cannot be claimable in damages
can a business claim damages for mental distress
no
what does causation have to do with claiming damages
breach must have been the actual cause of the loss
- an intervening act can break the chain of causation
what is the reasonable contemplation test.
if the loss was reasonably foreseeable it means the parties knew there was a risk of a breach causing such a loss.
Hadley v baxendale
basic reasonable contemplation test
Victoria laundry v man industries
loss must be obvious and ordinary otherwise it is too remote
Heron ii
at the time of the contract, the loss from a potential breach must have been contemplate as quite likely or not unlikely.
what is mitigation
claimant cannot recover damages in respect of losses attributable to his failure to reduce the loss.
duty to mitigate–
1. reasonable steps to minimise loss
2. not unreasonably increase the loss.
what is specific performance
court order to perform contract
- damages must be inadequate to protect expectation interest
damages ca be inadequate where the loss is either difficult to quantify or prove- adderly v Dixon
what is an injunction
order to stop party doing something they promised not to.
what are the two types of injunctions
- prohibitory injunctions- used to stop breach by enforcing obligation
- mandatory injunction are used after the breach- removal of something
what is restitution for unjust enrichment
reversing the benefit gained by the other party
1. a party receives a benefit
2. the enrichment was at the expense of the claimant
3. it is unjust for the enriched party to keep the benefit.
if a contract exists is it possible tp rely on unjust enrichment
no.
contract is void or never came into existence means unjust enrichment restitution can apply
