Damages - the limiting principles Flashcards
Wilson v Carmichael 1894
CAUSATION
Cabbage seed was supplied disconform to contract. The pursuer recovered damages because his ground was occupied by an unremunerative crop. He failed to recover for loss of business with his customers. The reason was that a skilled farmer would have discovered that the cabbages were the wrong variety before selling them. What caused the loss of business? Here is a typical causation problem, because there are two causes of the loss to choose from—the original breach of contract by the supplier of the seed, and the pursuer’s failure to inspect cabbages before sale. The court chose the latter cause.
Monarch Steamship Co 1949
cargo transported Japan to Sweden 1939 - war broke out on the way - but the voyage lasted months longer than it should have because the ship was not seaworthy - had the ship been seaworthy, it would have made it to the destination months before war broke out - the poor state of the ship was the cause of the loss
Hadley v Baxendale 1854 (2 parts)
Remoteness:
Damages recoverable for breach of contract are:
1:
“such as may fairly and reasonably be considered either arising naturally, or such as may reasonably be supposed to have been in the contemplation of both parties, at the time they made the contract, as the probable result of the breach of it.
SPECIAL CIRCUMSTANCES
2:
If the special circumstances are known to both parties, the damages resulting from the breach would be different
The Achilleas 2009
Remoteness:
Pg. 12 of the handout… loss calculated as loss from 9 days or the whole period of the charter??
HELD: ‘understanding of the shipping market… liability was restricted to the difference between the market rate and the charter rate for the overrun period.’ MARKET UNDERSTANDING
British Westinghouse-Electric & Manufacturing Co v Underground Electric Ry Co of London 1912 (three-part test)
MITIGATION OF LOSS:
(1) The assessment of the pursuer’s loss will be on the basis that the pursuer acted reasonably in the circumstances, even if the pursuer acted extravagantly.
(2) It is, however, assumed that the actual loss incurred by the pursuer was reasonable, until the defender proves otherwise.
(3) The pursuer cannot recover more than actual loss. Therefore, if events directly connected with the breach reduce the loss to the pursuer, that must be taken into account.
the principle that:
“… imposes on a plaintiff the duty of taking all reasonable steps to mitigate the loss consequent on the breach, and [which] debars him from claiming any part of the damage which is due to his neglect to take such steps.”
“This … principle does not impose on the plaintiff an obligation to take any step which a reasonable and prudent man would not ordinarily take in the course of his business”.
Gunter & Co v Lauritzen 1894
The reasonable buyer might buy in from elsewhere in an available market but not search the country for portions of the goods
Mitigation of loss case - they could have been expected to look around Aberdeen for other products (the sale took place in Aberdeen) but could not have been expected to look all over the country.
Reichman v Gauntlett [2006]
The claim was for price and not damages, with the result that the rules on mitigation of loss did not apply.
Balfour Beatty v Scottish Power 1994
Remoteness – so far as special knowledge is concerned, how much special knowledge is required to incur liability?
They were building a duct, they needed 24 hour electricity - the electricity failed - cement dried - the bridge would only be structurally sound if there was a continuous pour of cement - it ended up not being sound because of the failure in electricity - they had breached the contract - no doubt about causation - but remoteness - it is not a normal consequence of a breach of contract for electricity that so much liability would be incurred - Scottish Power had no knowledge of the construction technique - followed the Hadley test
