📑Contract: damages, other remedies, termination, frustration Flashcards
What are nominal damages?
- Awarded when theres a breach but no loss, to recognise breach (£10 ish)
- Not worth bringing claim where no loss as C will have to pay Ds legal costs
Damages: how are losses as a result of breach established?
- Expectation loss=compare Cs position as is with the position they’d have been in if the contract had been fully performed
- Reliance loss=Where loss of expectation to speculative, C just claims for expenses incurred because of reliance on the contact being performed
How are damages quantified
Aim: to put the claimant in the same position, so far as money can, as they would have been in had the contract been performed
Eg.
□ Cost of cure UNLESS unreasonable in relation to benefit to be obtained
□ Difference in value
□ Loss of amenity/consumer surplus (if contract is for amenity
What are the types of loss recoverable?
Pecuniary losses (can be assessed in financial terms)
□ loss of profit
□ damage to property
Non pecuniary losses (cant easily be assessed in financial terms
□ Disappointment/mental distress IF objects of contract was to provide pleasure or peace of mind (eg. Holiday/wedding contracts)
What is remoteness
The loss must have been within the reasonable contemplation of the parties at the time of the contract as being a probable result of the breach:
1. Is the loss an inevitable/natural consequence of breach?
2. Did the D know of special circumstances making the loss a likely consequence of the breach?
As long as loss isn’t too remote, the extent of the loss is irrelevant
What is mitigation?
C must take reasonable steps to mitigate the loss caused by the breach (even if steps failed/increased loss)
Where is the burden of proof for mitigation?
Burden on D to show C failed to mitigate their loss
What is a specified damages clause? (aka. liquidated damages clause)
Clause stating the amount of compensation which will be paid if theres a particular breach
ENFORCEABLE regardless of actual loss
What is a penalty clause?
An attempt to put pressure on a party to perform the contract because the sum is disproportionately high
UNENFORCEABLE: Court assess damages in usual way
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How to decide if a clause is a specified damages or penalty clause?
- Only penalty if provides an exorbitant alternative to ordinary damages.
- Is the clause penal and is it a genuine pre-estimate of loss?
- Does the clause impose a detriment on the contract breaker out of all proportion to any legitimate interest of the innocent party in the enforcement of the contract.
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What remedies can make the defendant perform the contract?
- Action for an agreed sum
- Specific performance (equitable)
- Injunction (equitable)
What is an action for an agreed sum also known as?
Action in debt/action for the price
What is an action for an agreed sum and the conditions to bring it?
- Suing for a fixed amount of money owed (+accrued interest for late payment)
- Conditions:
□ Money must be owed
□ Date for payment must have fallen due
Does the C have to prove loss for an action for an agreed sum?
No
What is specific performance?
An order of the court which requires a party to perform its contractual obligations.
What is the effect of failure to comply with an order for specific performance?
will be contempt of court.
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When wont specific performance be granted?
When:
1. Damages are an adequate remedy
2. For sale of goods (more common for sale of land)
3. Contracts requiring continuous supervision by the court
4. Contracts involve services eg employment(bc rely on trust)
5. If its not just and equitable to do so (equitable remedy)
What is an injunction
Restrains D from doing what they agreed not to do
When wont an injunction be granted?
if the effect would be to compel D to do acts they couldn’t be ordered to do by specific performance
Types of injunction
Prohibitory-forbids a person doing particular act
Mandatory-requires breach to be put right
Which remedies which make the defendant perform the contract are equitable?
Specific performance
Injunction
What is restitution?
Prevents one party from being unjustly enriched at the expense of the other.
When will restitution be awarded?
Where contract/no contract inc:
1. £ paid under contract + total failure of consideration =Can bring an action in restitution to recover money if payee in breach
2. Done work for/supplied goods and wants to be compensated, eg:
□ Where contract broken
□ Where contract never formed (common in building work)
□ Quantum mereit-reasonable sum for work done
What are restitutionary damages/when can they be awarded?
Based on gain made by D not loss to C
Can be awarded: for ‘negotiating damages’ to compensate the C for the notional loss of the opportunity to bargain where that was the only loss