Discharge - Remedies Flashcards
What are the 3 main types of remedy in contract law?
Legal remedies, equitable remedies and statutory remedies
When can a contract be repudiated and what type of remedy does this come under?
When there is actual or anticipatory breach of conditions and serious breaches of innominate terms
Legal remedies
What is the other type of legal remedy and the 2 types within this?
Damages - compensatory damages and nominal damages
What are nominal damages?
If the victim of breach has suffered no loss the court can award nominal damages - a small sum of compensation to acknowledge the contract has been breached
What does the case of Robinson v Harman say the purpose of compensatory damages is?
To put C in the same financial position they would have been had the contract been properly performed
How does the court work out compensatory damages?
By deciding what losses can be compensated for - using the rules of remoteness
What does Hadley v Baxendale say about the 2 types of losses and the remoteness tests for each type?
Normal losses are losses that come naturally from the breach - they are not too remote if they are reasonably foreseeable
Special losses are caused by specific circumstances - they are not too remote if D knew of the particular circumstance and the loss they could cause
What does it mean by quantum of damages and what are the two methods to do this?
Calculating the amount of compensatory damages owed
- loss of bargain/expectation loss
- reliance loss
What does it mean by expectation loss?
Where the innocent party has lost what they expected to receive from the contract
Which two ways can expectation loss be measured?
- where one party has not performed at all and so the expectation loss will be the cost of obtaining the goods that should have been supplied and any profit expected
- where one party performs the contract but does so defectively, so the loss here is either the cost of restoring goods to the expected quality or the gap in price between the goods contracted for and goods received
How did the cases of Thomson and Robinson and Charter v Sullivan differ?
In Thomson v Robinson, C could sue for the cost of the car as he had expected to make that profit however in Charter v Sullivan, C could not recover the cost of the car as it would be easy to get the same profit from someone else (as car was in high demand)
What does it mean by reliance loss?
Damages may be assessed on the basis of the loss suffered by C in reliance on the contract - usually only done so when it is hard to work out expectation loss
How was reliance loss used in the case of Anglia TV v Reed?
It was hard to work out the expected value of the film before it is released and so they could instead get damages for the amount they had spent on the film before the contract ended
What does the case of Farley v Skinner show reliance loss may also be used for?
Loss of valuable amenity/pleasure
What does it mean by having a duty to mitigate the loss? What is the case used to show this?
Thai Airways v KI Holdings
C must take reasonable steps to minimise the loss caused by the breach - the damages awarded will only be for the profit they would have lost had they taken the reasonable steps
