Damages

Question 1

Condition

Answer 1

Term going to the root of the contract

Remedy is termination or damages

Question 2

Warranty

Answer 2

Less important term

Remedy is damages

Question 3

Innominate Term

Answer 3

Neither condition nor warranty
(Remedy depends on consequences)
Hong Kong Fir

Question 4

Test for determining classification or term found in

Answer 4

Schiler v Wickman

Question 5

Test for determining classification of term:

Factors to consider

Answer 5

• circumstances surrounding making of contract
• contract as a whole
• whether the parties described the term as a condition or warranty (this can be rebutted)

Question 6

Damages are intended to compensate claimant, not punish defendant

Answer 6

Obagi

Question 7

Expectation Loss

Robinson v Harman

Answer 7

Aim is to put claimant in the position they would have been in had the contract been properly performed

Question 8

Robinson v Harman

Expectation loss takes into account

Answer 8

• difference in value
• loss of amenity (Ruxley Electronics)
• loss of opportunity (Chaplin v Hicks)
• loss of pleasure; usually no (Addis v Gramophone) unless contracts purpose was claimant’s enjoyment (Jarvis v Swans Tours)

Question 9

Reliance loss

Answer 9

Aim is to put claimant in position he would have been in had the contract never been entered into
(Anglia TV)

Question 10

Specified damages clause

Answer 10

A genuine attempt to pre-estimate the loss likely to result from a breach

Question 11

Penalty

Answer 11

An attempt to put pressure on a party to perform the contract
Not enforceable

Question 12

Assessing whether there is an agreed damages clause

Answer 12

Need to assess clause at time contract was made, not time of breach

Question 13

Dunlop Guidelines

Answer 13

Is sum extravagant or unconscionable? yes=penalty

If breach consists of not paying money, or sum stated in clause is greater than amount ought to have been paid = penalty

If single lump sum payable on happening of one or more event = presumed penalty

Question 14

Cavendish Square Holding v Makdessi guidelines

Answer 14

• Was there a commercial justification?
• Was the provision extravagant or oppressive?
• Was deterrence its predominant purpose?
• If relevant, was it negotiated on a level playing field?

Question 15

Hadley v Baxendale Limb 1

Answer 15

Usual loss arising in ordinary course of things

Question 16

Victoria Laundry Limb 1

Answer 16

Liability is in respect of imputed knowledge that parties are assumed to know

Question 17

Hadley v Baxendale Limb 2

Answer 17

Loss reasonably supposed to have been in contemplation of both parties, at time contract made, as the probable result of a breach

Question 18

Victoria Laundry Limb 2

Answer 18

If it is an unusual loss, D is liable if they had actual knowledge of special circumstances

Question 19

Heron II

Answer 19

Degree of probability is ‘not likely’ (narrower remoteness test than tort)

Question 20

If type of loss is within reasonable contemplation of parties, all loss of that type will be recoverable even if full extent of loss not contemplated

Answer 20

Parsons v Uttley Ingham

Question 21

Normal profit is a different type of loss to high profits resulting from a specially lucrative contract

Answer 21

Brown v KMR

Question 22

In complex cases, look at commercial context not simply reasonable contemplation

Answer 22

The Achilleas

Question 23

Main rule of quantification is position claimant would have been had contract been performed properly

Answer 23

Robinson v Harman

Question 24

Ruxley v Forsyth

Answer 24

Test of reasonableness - compensate for loss truly suffered

Question 25

Quantification

Cost of cure

Answer 25

Not reasonable if gives gratuitous benefit compared to non monetary loss suffered

Question 26

Quantification

Difference in value

Answer 26

(The difference in value may actually be nothing)

Question 27

Quantification

Loss of amenity/disappointment

Answer 27

If no difference in value and cost of cure is unreasonable, court may award for personal, subjective non-monetary loss

Question 28

Jarvis v Swan Tours

Answer 28

Damages for disappointment in a contract for pleasure were awarded
Will not get loss of amenity in commercial cases

Question 29

General rule: Claimant cannot recover damages for their injured feelings

Answer 29

Addis v Gramophone

opposed by Jarvis

Question 30

Claimant must take reasonable steps to mitigate loss

Answer 30

British Westinghouse

Question 31

Claimants damages can be reduced for contributory negligence

Answer 31

Law Reform (Contributory Negligence) Act