damages Flashcards
what are damages?
common law remedy for breach of contract. they are compensatory and the claimant can recover expectation loss
what are liquidated damages?
agreed by the parties in the contract. in the event of the breach of a particular term the party who breached it will have to pay the other party ‘x’ amount. the defendant will only have to pay the amount of damages specified in the contract regardless of the actual loss
what is the approach that Makdessi v Cavendish Square Holdings sets out for whether a clause was a penalty or a liquidated damages clause?
a clause fixing a level of damages payable is a penalty if there is an extravagant disproportion between the sum that has been stated and the highest level of damages that could possibly arise from the breach
what are unliquidated damages?
they are assessed by the courts. come forward if the parties haven’t included any liquidated damages provisions or if the liquidated damages clause has been rendered unenforceable
what is the aim of contractual damages?
to place the claimant in the position they would have been had the contract been performed (expectation loss)
when is reliance loss used?
if they can’t prove their expectation loss. the courts won’t permit the claimant to recover reliance cost to escape a bad bargain
how is expectation loss calculated?
what they actually received - what they expected to receive
what principle does Addison v Gramophone Co lay down?
that damages for mental distress and disappointment cannot be claimed. can only be allowed in limited circumstances where the very purpose of the contract was to provide entertainment and enjoyment - Jarvis/Jackson
what are the limits placed on the claimant’s rights to recover damages?
causation (claimant must show that there is a causal link between the damage suffered and the breach of contract), remoteness of damage, claimant’s duty to mitigate losses, Limitation Act 1990, Addison v Gramophone Co
what are the components of the remoteness of damage limit?
the loss must not be too remote from the breach
Hadley v Baxendale set out two rules:
the loss/damage is too remote unless:
-it arises naturally from the breach (objective);or
- it was in the contemplation of both parties as being a consequence of the breach when the contract was formed
were the damages foreseeable
what is the claimant’s duty to mitigate losses?
must take reasonable steps to mitigate losses. if the claimant refuses or fails to they are unable to recover the proportion of loss that is attributable to that failure. if the mitigating has the effect of wiping out their loss they are back to being able to claim nominal damages
what law does the limitation act set out for claiming damages?
action must be started within 6 years of the breach and within 12 years for a deed
