Damages, causation, remoteness, mitigation

Question 1

What is the aim of damages in contract law?

Answer 1

The aim of damages is to compensate the claimant for the damage, loss, or injury they have suffered as a result of the defendant’s breach, putting them in the same position they would have been in had the contract been performed. Punishing the defendant is not the aim. This is called expectation interest

Question 2

What is expectation interest?

Answer 2

This includes:
- Cost of cure: Cost of substitute or remedial work required for defective works, calculated from the time of breach unless justice requires a delay.

• Loss of profit: Profit that was intended to be made as a result of the contract.
• Diminution in value: Difference in value between the performance received and that promised in the contract.
• Loss of amenity: Remedy for when the loss is not economic in value, though rare.

Question 3

What is reliance interest?

Answer 3

This allows the claimant to recover expenses incurred in preparing for or partially performing the contract that have been rendered pointless by the breach.

Question 4

Wht is the aim of reliance interest?

Answer 4

The aim is to put the claimant in the position that they would have been in if they had never entered the contract

Question 5

How can the defendant avoid paying reliance interest?

Answer 5

They must prove that the claimant would not have recovered the expenditure had the contract gone ahead

Question 6

What is restitution interest?

Answer 6

Restitution interest involves restoring to the claimant benefits which the defaulting party acquired at their expense.

Question 7

When does restitution interest apply?

Answer 7

It applies in exceptional cases where the claimant had a legitimate interest in preventing the defendant’s profit-making activity and thus in depriving them of profit.

Question 8

Does efficient breach count to get restitution interest?

Answer 8

No

Question 9

What is unjust enrichment?

Answer 9

Unjust enrichment occurs when one party has not provided consideration.

Question 10

What is the remedy for unjust enrichment?

Answer 10

Restitution operates to reverse the unjust enrichment of one of the parties.

Question 11

Can damages be awarded for mental distress?

Answer 11

Generally not. However, exceptions include cases where it results from physical inconvenience or contracts whose whole purpose was the provision of pleasure, relaxation, and peace of mind.

Question 12

Can damages for loss of reputation be awarded?

Answer 12

Generally not. However, contracts of employment put the employer under an obligation to carry out work honestly (Malik v BCCI)

Question 13

when can damages be awarded for loss of chance?

Answer 13

Damages for loss of chance are recoverable if the lost chance is quantifiable in monetary terms and there was a real and substantive chance that the opportunity might have come to fruition.

Question 14

Can damages be recovered on behalf of another party?

Answer 14

Not normally.

Question 15

What must a claimant establish to recover damages for breach of contract?

Answer 15

The claimant must establish a causal link between the defendant’s breach of contract and their loss to recover damages.

Question 16

What is factual causation?

Answer 16

Common sense determination of whether the defendant caused the loss by the breach.

Question 17

What is legal causation?

Answer 17

A consideration of whether there are any intervening acts (novus actus interveniens).

Question 18

What is the test for remoteness in contract law and where is it from?

Answer 18

Hadley v Braxendale:
1. was the loss of a type ordinarily and natrually arising from the breach (objective)?
2. if not, was it reaosnably supposed to have been in the contemplation of both parties at the time they made the contract?

Question 19

What is the exceptional test set out in Achilleas for remoteness?

Answer 19

The test considers whether, in objective terms, the defendant had assumed responsibility for the loss in question. In specific industries, the Hadley approach may not reflect the expectation or intention reasonably imputed to the parties.

Question 20

What is the duty of mitigation in contract law?

Answer 20

The injured party should take reaosnable steps to minimize the effect of the breach. Losses attributable to a failure to mitigate are not legally recoverable

Question 21

If mitigation leads to increased loss, can this increased loss be claimed?

Answer 21

Yes

Question 22

How is the question of reasonableness determined

Answer 22

This is a question of fact

Question 23

What is the duty of mitigation in relation to a claim for payment of debt?

Answer 23

There is no duty to mitigate a claim for payment of debt. This includes a claim for liquidated damages.

Question 24

What is the short-term right to reject under the Consumer Rights Act 2015?

Answer 24

The short-term right to reject is available to the consumer for 30 days after ownership has passed, and the goods have been delivered or installed.

Question 25

What are the rights to repair or replacement under the Consumer Rights Act 2015?

Answer 25

The right to repair or replacement is available unless it is impossible or disproportionate.

Question 26

What are the requirements for a price reduction or final right to reject under CRA 2015?

Answer 26

Price reduction or final right to reject can only be claimed if: - After one repair/replacement, goods still do not conform; or - The consumer can neither require repair nor replacement; or - The consumer has required repair/replacement but the trader has not done it within a reasonable time.

Question 27

What are the rights concerning digital media under the Consumer Rights Act 2015?

Answer 27

Digital media can be repaired or the price reduced if: - The trader had no right to supply the digital content that was supplied, entitling the consumer to a refund; or - The digital content causes damage to the device, entitling the consumer to repair or compensation.

Question 28

What are the rights for contracts for services under the Consumer Rights Act 2015?

Answer 28

Contracts for services can have repeat performance or price reduction if the service does not conform to the contract.