Damages and equitable remedies Flashcards
Types of remedies
- Common law
- > damages
- Equitable remedies
- > specific performance
- > injunction
- > restitution/ quantum meruit
Liquidated damages
- damages that have been pre-agreed to by parties to the contract. No dispute in amount.
- must be a genuine pre-estimate of loss and not a penalty
Liquidated damages - genuine pre-estimate or penalty????!!@??!@?#?
As set out in ๐๐ฎ๐ง๐ฅ๐จ๐ฉ ๐๐ง๐๐ฎ๐ฆ๐๐ญ๐ข๐ ๐๐ฒ๐ซ๐๐ฌ ๐๐จ ๐๐ญ๐ ๐ฏ ๐๐๐ฐ ๐๐๐ซ๐๐ ๐ & ๐๐จ๐ญ๐จ๐ซ ๐๐จ ๐๐ญ๐, If ONE of the GUIDELINE is met, most likely a penalty:
1) if the stipulated sum is extravagant and unconscionable compared with the greatest conceivable loss flowing from the breach, the LDC is a penalty.
2) if the stipulated sum is payable as a lump sum regardless of different possible breaches where some are trivial and some are serious, LDC is a penalty.
3) if the stipulated sum is greater than the sum payable under the contract, LDC is a penalty.
Unliquidated damages
- amt not pre-agreed
- it is to place innocent party in the same position he would be if the contract had been performed properly.
Tree diagram
1) has there been a breach?
- yes (go to 2)
- no (then no la so no damages)
2) has the breach CAUSED loss?
- yes (go to 3)
- no (means no loss no damages la dumb)
3) is loss or injury too REMOTE?
- no (go to 4)
- yes (sad lo no damages BUT if 2nd limb of ๐๐๐๐ฅ๐๐ฒ ๐ฏ ๐๐๐ฑ๐๐ง๐๐๐ฅ๐ is astisfied then heng ah go to 4)
4) what is the amoune of damages? (ASSESSMENT)
5) did plaintiff take steps to minimise damages? (MITIGATION)
Causation
- Is there a casual connection between the breach and the loss suffered?
- P must show that the breach of the contract by D was the cause of the loss.
- โBut-Forโ Test: but for the action, the result would not have happened.
Remoteness
- The loss or injury must be reasonably related to the contract.
- Need only foresee KIND of loss, NOT EXTENT of loss
๐๐๐๐ฅ๐๐ฒ ๐ฏ ๐๐๐ฑ๐๐ง๐๐๐ฅ๐ -> only two types of losses are recoverable, if the loss doesnt fall into either of these categories, it is too remote.
Limb 1: Loss arising naturally
- Imputed knowledge
Limb 2: Loss arising from special or exceptional circumstances where it can be shown that the loss was within the contemplation of the parties at the time of the contract
- Imputed &/ Actual knowledge
Assessment - expectation loss and reliance loss
- Aim to compensate not to punish
Expectation loss:
what P wouldve expected to get if contract had been performed properly.
eg; loss of profits
- careful to verify if it is calculated on a nett/gross basis.
gross- cant claim reliance loss bc it will be double compensation, so can only choose one to claim.
nett- can claim reliance loss
Reliance loss:
wasted expenditure incurred by P prior to the breach
Assessment - cost of cure vs dimunition in value
Cost of Cure:
- Damages measured according to the cost of defect
eg; cost of making slanted building straight
Dimunition in value
- Damages measured according to difference in value between what was promised in contract and what was actually done.
eg; couldve sold building at 500k but now that its slanted, can only sell at 300k so 200k is the DiV.
Where CoC is out of proportion to the advantage to be gained by the inured party, the court may award the DiV PLUS modest damages for loss of amenity
Assessment - Non-pecuniary loss
Non-pecuniary losses are non-monetary losses such as hurt feelings, anxiety, loss of reputation, etc.
- The general rule is that non-pecuniary losses are generally not recoverable bc of their remoteness.
EXCEPTION:
if one of the sole purposes of the contract was to have a peace of mind, relaxtion, give pleasure OR if P suffers substantial physical inconvenience, the injured party will be awarded damages for the loss of such non-pecuniary loss.
๐๐๐ซ๐ฏ๐ข๐ฌ ๐ฏ ๐๐ฐ๐๐ง ๐๐จ๐ฎ๐ซ๐ฌ
where a disastrous holiday allowed damages for non-pecuniary losses as peace of mind, relaxation and pleasure was an important objective of the contract.
๐
๐๐ซ๐ฅ๐๐ฒ ๐ฏ ๐๐ค๐ข๐ง๐ง๐๐ซ
where damages for loss of peace of min due to property near airport were granted.
๐๐๐ฉ ๐๐จ๐จ๐ง ๐๐๐ง๐ ๐๐จ๐ง๐ง๐ฒ ๐ฏ ๐๐๐๐ข๐๐ข๐ ๐๐ซ๐ข๐๐ ๐๐ง๐ญ๐๐ซ๐ง๐๐ญ๐ข๐จ๐ง๐๐ฅ ๐๐ญ๐ ๐๐ญ๐
where loss of amenities was claimable.
Mitigation
- Innocent party has duty to take reasonable steps to reduce loss and not aggravate loss
- No mitigation means he cannot recover compensation for loss he couldโve avoided by taking reasonable steps
- Expenses incurred in mitigating losses are recoverable, even if it results in increased loss too.
Specific performance
- Court orders D to perform his obligations under the contract
- Specific performance can be, but generally would not be awarded:
where damages are an adequate remedy;
where the Court cannot supervise its enforcement;
contracts involving provision of personal services
Injunction
- court order forcing a party to the contract to not do something
- normally cannot be used if it would achieve the same result as specific performance
๐๐๐ซ๐ง๐๐ซ ๐๐ซ๐จ๐ญ๐ก๐๐ซ๐ฌ ๐๐ข๐๐ญ๐ฎ๐ซ๐๐ฌ ๐๐ง๐ ๐ฏ ๐๐๐ฅ๐ฌ๐จ๐ง
where an injunction against Nelson to prevent her from acting for another studio would have indirectly amounted to forcing her to work for WB, which is what a specific performance couldโve achieved. Thus, it was held unenforceable.
Prohibitory injunction: prevent guilty party from performing an action
Mandatory injunction: requires guilty party to undo an action.
๐๐๐๐ฅ๐๐ฒ ๐ฏ ๐๐๐ฑ๐๐ง๐๐๐ฅ๐
Remoteness of loss
Damages can be recovered if losses fall within one of the 2 limbs:
Limb 1: Loss arising naturally from the course of business.
Limb 2: Unusual losses that are within the reasonable knowledge of the 2 parties before or at the time the contract was made.
๐๐ฎ๐ง๐ฅ๐จ๐ฉ ๐๐ง๐๐ฎ๐ฆ๐๐ญ๐ข๐ ๐๐ฒ๐ซ๐๐ฌ ๐๐จ ๐๐ญ๐ ๐ฏ ๐๐๐ฐ ๐๐๐ซ๐๐ ๐ & ๐๐จ๐ญ๐จ๐ซ ๐๐จ ๐๐ญ๐
Liquidated damages
If one of the guidelines is met, it is most likely a penalty:
- Sum is extravagant and unconscionable compared with the greatest conceivable loss flowing from the breach
- Sum is payable as a lump sum regardless of different possible breaches, some of which are serious while others are trivial
- Sum is greater than the sum payable under the contract
๐๐๐ซ๐ฏ๐ข๐ฌ ๐ฏ ๐๐ฐ๐๐ง ๐๐จ๐ฎ๐ซ๐ฌ
Assessment - Non-pecuniary losses
where a disastrous holiday allowed damages for non-pecuniary losses were claimable due to pleasure and peace of mind being an important objective of the contract.
