Damages

Question 1

What are the bars to rescission?

Answer 1

1. Lapse of time
2. Affirmation of the contract
3. Restitution is impossible
4. Bona fide purchase for value without notice

Question 2

What are the bars to equitable remedies?

Answer 2

1. C’s unconscionable conduct
2. Unreasonable delay by C
3. Waiver

Question 3

Can damages be recovered where the contract has been rescinded?

Answer 3

Yes

Question 4

What does C need to do if they want to rescind the contract?

Answer 4

They need to notify D

Question 5

What can C claim for in an actual breach?

Answer 5

Terminate the contract
Claim damages for breach of conditions and warranties

Question 6

What can C claim for in an anticipatory breach?

Answer 6

Terminate the contract and claim damages for conditions straight away, or elect to wait until a later date (so that they can claim damages for warranties too)

Specific Performance

Note that C cannot claim damages for warranties in an anticipatory breach

Question 7

How can an anticipatory breach be communicated to C?

Answer 7

It can be both direct and indirect (inferred by C)

Question 8

What are the requirements for restitutionary damages?

Answer 8

1. D was enriched by C (e.g. money paid by mistake, services provided under no contract)
2. D’s retention of the enrichment is unjust

Question 9

What are examples of restitutionary damages?

Answer 9

1. Quantum meruit (for work done)
2. Quantum valebat (for value of goods)
3. Account of profits

Question 10

When are equitable remedies granted?

Answer 10

At the court’s discretion

Question 11

What are examples of equitable remedies?

Answer 11

1. Specific Performance
2. Injunctions
3. Rescission (as if the contract was never made)

Question 12

When will specific performance not be granted?

Answer 12

1. Contracts for personal services or employment
2. It would cause hardship to the breaching party
3. The innocent party has outstanding obligations
4. The order would require supervision by courts

Question 13

When will liquidated damages clauses be legal?

Answer 13

Only if they are a genuine estimate of loss and it is to protect a business interest - it can never be punitive in nature

Question 14

What are the different types of damages?

Answer 14

1. Expectation - difference in value had the contract been performed
2. Reliance - expenses that C incurred as a result of relying on the contract
3. Non-monetary e.g. loss of amenity
4. Nominal damages

Question 15

What are the remedies for frustration under LRFCA?

Answer 15

1. Amounts payable will cease to be payable
2. Paid amounts can be recovered (unless the court deducts amounts for any expenses incurred)
3. Any benefit conferred to a party may be recoverable (a party may have to pay for it)

Question 16

What is frustration?

Answer 16

When an event that is not under the control of either party OR foreseeable by either party at the time of contracting, makes performance of the contract either impossible or radically different.

This is even where there is still value in performing the contract.

Question 17

When is it not frustration?

Answer 17

Where performance is only made more expensive or onerous

Where it was self induced by a party (BoP on the party claiming discharge to show it wasn’t self-induced)