Damages

Question 1

Why are damages awarded?

Answer 1

• Compensator (Robinson v Harman), NOT supposed to be a form of punishment

Question 2

What are the 2 types of damages?

Answer 2

• Expectation Damages = value of expected benefit LOST e.g. lost of profit
• Reliance Damages = value of WASTED expenses

Question 3

In what circumstance can damages be claimed?

Answer 3

If the contract HAS been breached

Question 4

Can damages be awarded for Affirmation or Termination?

Answer 4

Affirmation –> Damages for Particular Breach
Termination –> Damages for Bargain Loss

Question 5

What is an ALT to Damages?

Answer 5

Restitution –> specific money paid for procedural services (Mann v Patterson Constructions)

Question 6

What are some limitations of Damages for Statute Law?

Answer 6

• Can only bring about damages from 6yrs of the breach and 15yrs for deeds

Question 7

What are some GENERAL Limitations for breach

Answer 7

• Causation
• Remoteness of Damage
• Mitigation
• General exclusion of compensation for non-pecuniary loss
• Loss of bargain damages and termination under express terms
• Exclusion clauses

Question 8

Explain scenario of ‘Expectation Loss’ for Sellers n Buyers

Answer 8

Sellers –> If cust. repudiates –> Seller entitled to expected profit and cost of good

Buyer –> If vendor repudiates –> Buyer entitled to extra cost of replacement

Question 9

What are 2 methods for calculating Aggrieved Party’s loss?

Answer 9

• Cost of cure = money to RECTIFY w contract (usually more expensive)
• Diminuition in Value = diminution in financial position

Question 10

In using the 2 methods for calculating aggrieved party’s loss, use the light and dark blue wall paint example

Answer 10

Cost of Cure = Cost of REMOVING paint + Cost of INSTALLING light blue paint

Diminution in Value = Cost of light blue (new) - Cost of dark blue (old)

Question 11

What are loss of chance damages?

Answer 11

• A type of expected damages –> court may grant a ‘chance of benefit’ to party
  e.g. chance to win prize
  –> Howe v Teefy

Question 12

When are Reliance Damages provided?

Answer 12

• When difficult to determine Expectation Damages –> usually covers cost of Contract

Question 13

Who is the Onus on when providing Reliance Damages?

Answer 13

• Onus on defendant to PROVE that the plaintiff would nonetheless have made a loss

Question 14

What is the 2 stage test to prove ‘Causation’ for a breach?

Answer 14

1. Factual
2. Legal

Question 15

How does Remoteness limit Damages?

Answer 15

• Damages must NOT be too remote

Question 16

What are the 2 rules for remoteness?

Answer 16

1st limb - D MUST compensate P for those losses that occur naturally
OR
2nd limb D may have to compensate the plaintiff for those extraordinary losses as long as it’s of ‘reasonable contemplation’

Question 17

How does Mitigation impact Damages?

Answer 17

1. NOT recover damages for losses which could’ve been avoided
2. P CAN recover additional losses suffered if attempted to mitigate
3. P CANNOT recover avoided loss

Question 18

How does Non-Pecuniary loss impact Damages?

Answer 18

• Only available to things such as: physical injury, physical inconvenience, enjoyment

Question 19

How do Express Clauses limit Damages?

Answer 19

FULL bargain damages generally NOT available unless there is a common law right to terminate

Question 20

How do Exclusion Clauses limit Damages?

Answer 20

• Should be specific as possible as parties can contractually EXCLUDE or limit liability for breach