Damages. Flashcards
What are the basic principles? (5)
- Damages to compensate for loss.
- The measure of loss is based on “expectation.”
- Losses are subject to the rule of remoteness.
- Persons suffering loss are expected to mitigate.
- “Penalty clauses” are not enforceable.
What does Parke B say about damages as compensation?
“So far as money can do it to be placed in the same situation as if the contract had been performed.”
What doesn’t matter regarding punitive damages (and case)?
The conduct of the breaching party.
Addis v Gramophone - all that mattered was his financial loss.
Are lost chances still a loss (and case)?
Yes - its a lost opportunity to make money.
Chaplin v Hicks.
Can there be compensation for non-pecuniary (non-money related) loss?
No - loss must be of something with a financial value.
What are the exceptions to compensation for non-pecuniary loss? (3)
- Physical inconvenience or discomfort.
- Loss of Amenity.
- Loss of reputation from breach, resulting in financial loss.
When can nominal damages be awarded?
When mental distress is associated with the physical discomfort.
What is the case for ‘Loss of Amenity’?
Jarvis v Swans Tours Ltd.
What are the compensatory damages?
The difference between what was expected and the actual performance.
What are the 3 methods of calculating loss from expectation?
- Consequential loss.
- Difference in Value.
- Cost of Cure.
What is the difference in value?
Compensation for the difference in value to what received compared to what expected.
What is the cost of cure?
The cost of fixing what went wrong.
What is the point about difference in value and cost of cure?
- Can only receive one or the other (otherwise double recovery).
How will courts choose between difference in value and cost of cure (and case)?
By what is reasonable.
Ruxley Electronics and Construction Ltd v Forsyth.
What is said to be the 4th measure (and case)?
The Reliance Measure.
Anglia Television v Reed.
What are punitive damages?
Awarded alongside compensatory damages in a way to punish the defendant.
How is wasted expenditure measured?
Whether the incurrence and the wastage of expenditure was in the reasonable contemplation of the parties.
What is important when looking at causation?
It must be shown the loss was caused by the breach - a direct and natural consequence of the breach.
What is the rule about remoteness?
The innocent party cannot recover damages for loss that is too remote a consequence of the breach.
What is the key case for causation and remoteness?
Hadley v Baxendale.
What are the 2 legal principles to come from Hadley v Baxendale?
Losses are recoverable for breach if:
1. Loss arisen naturally from breach according to usual course of things. (obvious)
2. Losses which parties could be supposed to have had within their reasonable contemplation at the time the contract was formed. (probable/foreseeable)
What is the key case relating to the ‘two limbs’ from Hadley?
Victoria Laundry v Newman Industries.
What is the rule of mitigation?
Innocent party is expected to take reasonable steps to mitigate the loss they suffer.
What is the key case for penalty clauses?
The ParkingEye case.
Why are penalty clauses not enforceable?
They punish and the aim of damages is to place claimant into position they would be in if breach never occurred.
What are agreed damages clauses?
When the parties make provisions for damages to be paid in case of a breach - good commercial practice.
