Contract - remedies - limiting factors

Question 1

What are the cases on liquidated damages

Answer 1

🎩😈🥇📝
- B sold business to A. B not to compete with A or else won’t get all the cash A owed B for business & A will be able to buy B’s remaining shares at much reduced price. Primary obligation just a price adjustment and mechanism for allowing A and B to part ways.

🚙🪙🥈😇
- B overstayed his parking and was charged £85. Court agreed this was secondary obligation triggered by breach and therefore a penalty. But penalty not excessive.

Question 2

What determines whether damage is too remote?
🔭

Answer 2

Damages should be:
- Normal risk 🥱i.e. incurred in “the usual course of things”
- Special risk ⭐️ i.e. such amount as the parties would have contemplated, at the time of the contract, as the probable result of breaching it.🧐

Question 3

What cases concern remoteness of damage?
🔭

Answer 3

Repair Mill shaft, D was negligent causing delay and C to lose business
D not aware that C had no spare shaft or that shaft needed for business - no claim.
🍞🍆⭐️😭

C caused Laundromat delay in getting boiler:
- normal loss of trade - allowable
- special loss of trade from unique contracts D not aware of - not allowable
👕⚙️🥱/⭐️

Question 4

What is the case on reasonable mitigation?

Answer 4

Supplier wrongly thought Buyer hadn’t paid for silks and so asked for cash on original terms but broke the contract in so doing. Buyer refused and sued Supplier including increase in silk price. Buyer could not claim for increase in price as should have mitigated loss by taking Buyers up on their offer.

👘💰🤬😭

Question 5

What limiting factors are there on damages?

Answer 5

1. Causation⛓️: factual (dominant cause) and legal (no NAIs that break chain)
2. Remoteness🔭: loss of a type ordinarily and naturally arising from breach; and if losses are too unusual, D must have had sufficient actual knowledge to be aware of risks of these losses
3. Mitigation😇: injured party should take reasonable steps to minimise effect of breach - no obligation to but losses attributable to failure to do so aren’t recoverable

Question 6

What is restitution interest and the requirements for it?
😈💵😭

Answer 6

C’s interest they have in restoration of benefits which defaulting party has acquired at its expense - i.e. account for profits

1. Inadequacy of other remedies 😡
2. C has legitimate interest in depriving D of their profit😇

Book deal and secrets.

Question 7

What are the implications of a guarantee?

Answer 7

Promise by G to ensure that A carries out his obligations or step in a do them if A doesn’t
- G’s obligation ceases when A’s does 🪢
- If contract between A & B changes G will be discharged 🕊️
- Guarantee must be in writing and signed by G 📝

Question 8

What are the implications of an indemnity?

Answer 8

Promise by I to reimburse B if they suffer loss because of A.
- I’s obligation does not ceases when A’s does ⛓️
- If contract between A & B changes it will be remain 🦤