Contract Law - Damages Flashcards
Damages
Intended to compensate the innocent party for their loss - to put them in the position they would have been in had the contract been performed
Damages are not intended to punish
If innocent party not out of pocket, cannot claim damages
Expectation Interest
Contract performed but performed badly
Principle it what it would take to put the innocent party in the position they would have been had the contract been performed properly (i.e. to cure the defect or difference in value between what they got and what they should have got)
Reliance Interest
Can be claimed instead of expectation interest
Damages for loss of amenity
E.g. holidays
Damages usually assessed at the point of breach
E.g. anticipatory breaches - damages assessed at the time of breach
Remoteness of loss
Losses cannot be too remote - much flow naturally from breach or be in reasonable contemplation of parties when contract is made
Flowing naturally from the breach
E.g. higher price of laptop or any costs incurred looking for laptop
Contributory negligence
Where there is a duty to excercise reasonable care and skill
Only available if same duty of care would have arisen in tort even if there wasn’t a contract
Mitigation
Innocent party must take reasonable steps to mitigate their loss
Cannot claim damages for losses they should have been able to avoid but can claim costs of the mitigation
Liquidated damages
Party promises to pay a specified sum if they breach their obligations under the contract
Courts willing to uphold these unless clause is a penalty because damages are not intended to punish
Time for delivery agreed in a commercial contract
Presumption that time for delivery is of the essence of the contract (i.e. delivery time is a condition) - therefore, innocent party can terminate contract and claim damages
