Damages - contract Flashcards
what is the purpose of damages
to compensate C for the losses suffered as a result of the breach and to put V in the position they would have been in if contract had been properly completed by D
for compensatory damages what must be proven (2)
causation in fact
remoteness of damage
explain causation in fact
‘but for’ the BOC would C have suffered the loss? chain of causation must not be broken
what case set out remoteness of damage test
Hadley v Baxendale
what is the 2 stage test for remoteness of damage (Hadley v Baxendale)
1) damages for BOC will cover naturally occurring consequences of the breach (objective)
2) and will cover those in the contemplation when contract formed (subjective based on specific knowledge)
In what case could C recover damages for their natural loss profit but not for an especially valuable contract that D did not know about as this was what…
Victoria Laundry Ltd - not foreseeable & too remote
what did Llord Asquith LJ say about remoteness in Victoria Laundry Ltd.
- recoverable loss should be measured against a test of reasonable foreseeability
- foreseeability of loss is dependant of knowledge at time of formation
- knowledge can also be implied on basis of what a reasonable man may have contemplated in the circumstances
what case is an example of courts implying knowledge on basis that a reasonable man may have contemplated in the circumstances
Koufus v C Czarnikow
what case shows that there must be contemplation between the parties of the potential outcome of breach occurred
H Parsons Ltd. v Uttley Ingham
what are quantifying damages
determining how much C can recover once liability of the loss established through causation and remoteness
what are the 5 categories of recoverable loss
1) loss of a bargain
2) reliance loss
3) non-pecuniary loss
4) loss of amenity
5) mitigation of loss
what case states that the idea is to place C in the same financial position as if contract had been properly performed
Hence Graphics International Ltd.
what case states that if C’s ability to make a profit remains then no entitlement to damages
Charter v Sullivan
what case states that if no market available C can recover full loss
W L Thomas Ltd. v Robinson Gunmakers
what case states that C may be able to recover for the profit he would have been able to complete but for the BOC
Victoria Laundry Ltd.
Generally, is a speculative loss recoverable + exception
no, but 1 exception as in Chaplin v Hicks: mere fact damages difficult to calc. should not prevent them from being awarded
what is a reliance loss with a case
C may also be able to claim expenses he has had to spend in advance of a contract that has been breached - Anglia Television Ltd. v Reed
what is a non-pecuniary loss and is it normally recoverable
upset + distress suffered by V as a result of the BOC. Generally courts do not award compensation for injured feelings
exception to non-pecuniary losses with case
when a contract based on pleasure, relaxation and peace of mind, as in Jarvis v Swan Tours Ltd.
can loss of amenity (benefit) be claimed for
not normally as unfair/ absurd results produced, like in Ruxley Electronics and Construction Ltd.
once a loss has occurred, C has an obligation to do what + exception with case
take reasonable steps to mitigate the losses. However, if there is an anticipatory breach then no duty to mitigate- White and Carter v McGregor
what are liquidated (fixed) damages
where the parties fix in the contract the amount damages will be if a BOC
when will courts accept liquidated damages + case
when sum identified is an accurate and proper assessment of loss. If not then it will not be enforceable - Cavendish Square Holding
what are 2 equitable remedies
rescission
specific performance
when are equitable remedies awarded
at court’s discretion
when will specific performance not be awarded (3)
- damages are an adequate remedy
- supervision of the contract would be required
- contract involves provision of personal services
what is specific performance (mandatory injunction in tort)
courts order party to complete their side of contract - very rare!
