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contract part 3 > damages > Flashcards

damages Flashcards

1
Q

what is the purpose of damages

A
  • to compensate the plaintiffs less not to punish the breaching party
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2
Q

what are sp and injunction

A
  • ordering a party to do what they promised to do
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3
Q

3 measures of damages

A
  1. expectation
  2. reliance
  3. restitution
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4
Q

expectation damages

A

what innocent party expected to get had contract been performed

  • loss incurred from not receiving the expected benefit form the contract being performed,
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5
Q

reliance damages

A
  • loss incurred by the innocent party in reliance of the contract being performed
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6
Q

restitution damages

A
  • the gains made by the breaching party
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7
Q

e.g. of expectation damages

A

Ruxley v forsyth
Barry v Davies
malbrough district council v altomarloch joint venture

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8
Q

Ruxley v forsyth facts

A
  • r built swimming pool which was 45cm too shallow and f sued 45,000 to build a new pool
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9
Q

Ruxley v forsyth held

A
  • judge allowed for 2500 for loss of enjoyment but the pool was still usable
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10
Q

Barry v Davies fact

A
  • auction w/o reserve, B bought for 200 and retail for 28,000 so d refused to sell and claimed 27600 even tho he didn’t say tho 400 in the first place
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11
Q

Barry v Davies held

A
  • innocent party shouldn’t be able to claim damages w/o limit to restore them to position b4 the contract
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12
Q

malbrough district council v altomarloch joint venture facts

A
  • A contacted to purchased vinyard w essential water rights and only received half of these rights diminution of value and cost of cure amounted to around 1,000,000
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13
Q

malbrough district council v altomarloch joint venture held

A

the sc found that the cost of cure was appropriate to put the purchaser in the position as if the water rights were true, the vineyard couldn’t run w/o reinstatement of water rights

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14
Q

cost of cure

A

applicable for unique assets, subject to the reasonableness test

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15
Q

reliance damages e.g.

A

McRae v commonwealth disposals
anglia television v reed

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16
Q

McRae v commonwealth disposals facts

A

M contract to salvage a sunken oil tanker and the found it didn’t exist
C claimed that the subject matter never existed so no valid contact was formed

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17
Q

McRae v commonwealth disposals held

A

contract was formed and awarded m damages
- since the tankers value was speculative, court granted reliance damages for the expenses incurred while relying on the contract

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18
Q

anglia television v reed facts

A

a wanted to produce film and r to act, then r repudiated contact and refused to act, a sought damages for BOC as they couldn’t find another actor and had to abandon film
- a claimed wasted expenditure as it would be impossible to calculate how much profit would have been made

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19
Q

anglia television v reed held

A

a compensated for the money it had spent in preparation if the film in reliance of contract w reed

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20
Q

expenditure can only be recovered if it would not have been

A

wasted regardless of the breach

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21
Q

damages for BOC are available as

A

a right

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22
Q

Ti leaf v Baikie facts

A

b rented farm from t w clause prohibiting negative comments about t
- b made negative comments about t leading to withdrawal of major sponsor for a production
- t claimed 1m for wasted expenditure

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23
Q

Ti leaf v Baikie held

A
  • T unlikely to produce the film regardless of breach, so was denied reliance damages for wasted expenditure however was granted 500 nominal fro breach
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24
Q

restitution damages e.g.

A

AG v Blake

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25
Q

AG v Blake facts

A

B wrote book after prison escape, earned 60,000 with 90,000 pending
British court wanted to stop him from getting the money due to the confidentiality agt with mi6

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26
Q

AG v Blake boc

A
  • b breached the agt but the disclosed info was no longer a secret and caused no harm and Blake was no longer payed for his confidentiality
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27
Q

AG v Blake held

A
  • British govt had a legitimate interest in to prevent blake from profiting as secret services should not have financial motives, account of profits available
  • ONLY CASE OF AUTHOIRTY OF RESTITUTIONARY DAMSGES
28
Q

LIMITS #1 ON DAMAGES

A
  • innocent party cannot end up in a superior position than if no breach had occurred
29
Q

LIMITS #1 ON DAMAGES case

A

bloxham v Robinson

30
Q

bloxham v Robinson facts

A

b purchased dental prac inlcuded 108,000 for goodwill which only 38,000 of that was provided

31
Q

bloxham v Robinson held

A

awarded difference for the BOC but he was not awarded for loss of profit and emotional damages as this would have put him in a better position than if the breach hadn’t occurred

32
Q

LIMIT #2 ON DAMAGES

A

affirmed in bloxham, no recovery for mental distress
EXCEPTION - contacts for the purpose of relation and pleasure

33
Q

LIMIT #2 ON DAMAGES case

A

Jarvis v swan tours

34
Q

Jarvis v swan tours facts

A

J purchased a holiday for 63 which was expensive and he only got one holiday a year, it was more than disappointing

35
Q

Jarvis v swan tours initial held

A

isinitailly Jarvis was rewarded half the money he payed because half of the services were provided

36
Q

Jarvis v swan tours result on appeal

A

mental stress is justified when purchase is for purpose of r and r and so Jarvis was awarded $125 to compensate

37
Q

note on mental stress

A

difficult as it is very hard to assess

38
Q

LIMIT #3 ON DAMAGES

A

damages are not to punish the contract breaker

39
Q

LIMIT #3 ON DAMAGES cases

A
  • whiten v pilot insurance
  • paper reclaim v aoteroa international ltd
40
Q

whiten v pilot insurance

A

CANADIAN APPROACH
- W house burn down, insurance refused to pay and w was awarded 345,000 compensation and damages due to bad faith
- much higher than any financial gain P made by the breach

41
Q

paper reclaim v aoteroa international ltd

A

NZ APPROACH
- no punitive for BOC in nz as there is lack of binding authority and trend in oversea cases opposing punitive damages

42
Q

Hadley v baxendale

A

delivery delay caused Hadleys mill to close for 5 days
- H sued but couldn’t recover damages for 5 days as it was too remote and B would not be able to forsee the shut down because of no crankshaft

43
Q

the Hadley test 2 parts

A
  • natural loss
  • contemplated loss
44
Q

the Hadley test- natural loss

A

damages are recovered for losses that are naturally from the breach

45
Q

the Hadley test- contemplated loss

A
  • damages can be recovered for losses that were reasonably in the contemplation of both parties at the time the contact was made, even if loss isn’t natural
46
Q

justifications for the Hadley test

A
  • fair liabilty
  • efficient risk allocation
47
Q

fair liabilty in Hadley test

A

losses reasonably forsawn or agreed to when contracting avoid undue burden on the defendant

48
Q

efficient risk allocation in Hadley test

A

encourages the plaintiff to disclose of special circumstances allowing the defendant to exclude or adjust liability and plaintiff to insure accordingly

49
Q

Victoria laundry v newman industries facts

A
  • v purchased boiler, n knew was needed immediately but delivery was delayed by 5 months
50
Q

Victoria laundry v newman industries - claims by v

A

loss of profit would amount to 262 per week

51
Q

Victoria laundry v newman industries - general rule of foreseeability

A
  • injured party can only claim damages for foreseeable issues as of when the contract was made - reform the Hadley test into a forgeability test
52
Q

2 type of knowledge

A
  1. imputed knowledge
  2. specific knowledge
53
Q

imputed knowledge

A

reasonable person is presumed to know the ordinary course of things and this aligns with the first limb of the hadly rule, naturally arise from breach

54
Q

specific knowledge

A

knowledge that the breaching party actually had when entering into the contract, for the injured party to prove that the breaching party was aware of the special circumstance that fell out of the ordinary course of events

55
Q

mitigation in contact law

A

requires the claimant to take reasonable steps after a breach to limit or reduce their loss caused by the defendants breach, loss that could have been avoided through reasonable actions cannot be recovered in damages

56
Q

what is the reason of the mitigation rule in damages

A
  1. encourages injured party to actively manage and minimise their losses
  2. BOC should not mean that innocent party can neglect their responsibility and let losses accumulate
57
Q

Walop no 3 v para franchising facts

A
  • contract included exclusivity clause for franchisees, contact was subsequently lawful terminated but W claimed P failed to mitigate damages
58
Q

Walop no 3 v para franchising held

A
  • W did not prove well enough the failure to mitigate and therefor courts ruled in favour of P
59
Q

key points of mitigation

A
  • burden of proof is on the defendant to prove plaintiff failed to mitigate, p not to prove
  • if the d cannot prove failure to mitigate then normal damages apply
60
Q

s43 ccla

A

wide discretion for relief, account for damages incurred and this is deducted from damages awarded to allow for the injured party to end up in the SAME position

61
Q

s49(1) ccla

A

injured party can recover damages for misrep, repudiation or breach even after cancellation or breach

62
Q

s49(2) ccla

A

relief given under s43 must be considered when assessing damages

63
Q

steps 1 of remoteness test

A

at the time the contact was Made was the loss reasonably foreseeable as a result of the breach

64
Q

step 2 of remoteness test

A

what was at the Time reasonably foreseeable depends on the knowledge possessed by the parties

65
Q

step 3 of remoteness test

A

was it imputed knowledge or actual knowledge

contract part 3 (24 decks)

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